Cranfield School of Management has unveiled a new framework designed to support organisations in the target-setting process. The ‘Cranfield target-setting wheel’ will help firms of all sizes transform their existing performance management and incentive systems to reflect the sales environment that staff operate in and establish targets that will generate the expected behaviours.
The research funded by the Chartered Institute of Management Accountants (CIMA) and conducted by the Centre for Business Performance at Cranfield demonstrates that most sales performance measurement and incentive systems still focus on the need to meet short-term sales targets and assume sales people operate independently. This is despite reality being very different with many sales people working in teams where customer information must be produced and shared. The study highlights that this new selling environment requires innovative ways of measuring performance, setting targets and designing incentive plans.
Commenting on the research findings, Professor Mike Bourne from Cranfield School of Management said: “Setting high but attainable targets is one of the first rules in driving business performance. However, so often companies fail because they miss vital links in the target-setting process. Our research identifies the factors that influence how sales people respond to targets. Often management’s view of role and performance clarity differed from the sales force due to failures in communication, capacity and performance planning.”
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