Target Setting- from my book

Based on the ABP the store managers are supposed to set the targets for the store and his team.
Targets are mostly set by looking into previous year’s performance. If it’s a new store then targets are set based on market analysis.
Once the manager receives his ABP for the store the he breaks the target, quarterly wise, then month wise and then week wise and day wise. During setting up of the target quarterly wise he will also take seasons into consideration wherein he will set high targets during the festival seasons and during sale period. For week day and daily targets also he will set high targets for week ends and during all public holidays. He also needs to ensure that the stocks in the specific department is sufficient enough and will be available during the course before setting the target, else needs to ensure through his team to make sure the stocks are ordered regularly to achieve a set target.Based on the day to day performance of the store the manager has full authority to change his targets so as he can achieve his ABP (which will remain static) at the end of the year.
The store manager further distributes his target by breaking it department wise and gives the monthly target to his department in charge. The department managers further breaks the target section wise, product wise, day wise and further down to per staff wise.
For example:
If we consider the following:
· This is the first year of business
· End of season sale starts in the mid week of October and ends in the mid week of November and Diwali season is in last week of November:
· Men’s department has three sections namely mens formal, mens casual and mens accessories
· The casuals section is bigger than formals section.
Now let us take Mens category target for the month of October as Rs.150000/- and November as Rs. 275000/- .

Now if we consider four weeks in month of October and November then the targets should be divided as follows:
October month
1st week Rs. 25000/-
2nd week Rs. 25000/-
3rd week Rs. 55000/- as end of sales begin
4th week 45000 second week usually sales drop compared to first week of sale period

November month
1st week Rs. 55000/- as beginningof the month,sale period as well as festive season is approaching
2nd week Rs. 75000/- as it is the last week of sale
3rd week Rs. 50000/- business still will be high as new products will be launched for festive season
4th week Rs. 100000/- as it is the Diwali season and huge business is expected during this period.

Now as there are three sections in this department wherein casuals section is the biggest area wise and stock wise and accessories section is the smallest then the targets will be further divided as:

For 1st week of October
Casuals section target is Rs. 12000/- as the section is bigger compared to the rest
Formals section target is Rs. 8000/- and
Accessories section target is Rs. 5000/- as it being the smallest section. (Note: assuming average value of product in this section does not exceed that of other two sections.)

Accordingly the target is set for rest of the weeks.

Now lets us set target for individual staffs.
Assuming there are fifteen staffs in the mens department wherein:
Casuals section has seven staffs
Formals section has five staffs and
Accessories section has three staffs

Then the target per staff in casuals section for the first week in the month of October will be
12000 / 7 = Rs. 1715/-.

Target per staff in formals section for the first week in the month of October will be
8000 / 5 = Rs. 1600/-

And target per staff in accessories section for the first week in the month of October will be
5000 / 3 = Rs. 1700/-


So every staff has to sell merchandise worth around Rs.1700/- per week to achieve target of Rs. 25000/- in the first week of October

Now let us make this simpler.
In the first week of October each day per staff in the casuals department will have to sell stocks worth-
1715 / 7 = Rs. 245 /-

In similar way the targets can be distributed for every individual staffs in the store.

This shows how easy it becomes for a manager to give his frontline individual staffs per day target rather than inform him the entire months target as this becomes easy for a sales staff to achieve his target. It also becomes easier for the manager to track the sales staff’s daily sales performance.

To make it simpler the manager can further break this figure of Rs.245/- by giving quantity target of the products to be sold.
For example if the store sells
Product A Rs. 75/-
Product B Rs. 99/-
Product C Rs. 125/-

Then quantity target for product A is 4 pcs.
OR
Quantity target for product B is 3 pcs.
OR
Quantity target for product C is 2 pcs.

Such a break of target is very focus oriented and helps a staff very easily and comfortable to sell his products keeping the target in mind.

While setting targets the manager should set high targets on week ends, public holidays and on festive seasons and during promotions or seasonal sales so as to able to cover up back logs. Based on last years performance and the previous weeks performance for the year the target needs to be set accordingly. Motive should be to break the previous year’s performance so as to show growth in business for the store. Based on the performance of the store the manager can and is in a position to put up schemes/offer and sale within the store so as to achieve his ABP for the year.