Use Stretch Goals to Help Employees Achieve More

Many business owners and sales managers ask the same question, how do I set sales and production goals?   There isn’t a one-size-fits-all answer.   The answers typically depend on your industry, work flow, employees, and budget. Some companies have employees organized into work teams and incentives are tied to results generated by the team. Some employees, like salespeople, have individual goals and the incentive program is tied to individual performance.

One school of thought creates goals and stretch goals. The goal is more like a quota and represents the expected performance level. Employees/teams that reach their stretch goal are rewarded. This may look like:

GoalStretch Goal
$25,000 sales/month$27,500 sales/month
100 units produced/hour110 units produced/hour
4 minutes/transaction3 minutes/transaction

 

The incentive for reaching the stretch goal should not exceed the financial benefit received by the company. Goals should be clearly communicated and easy for employees and management to track their progress.

Goals should be fair for all workers. If the company has full and part-time workers, the goal may be converted to an hourly sales/production goal versus a monthly goal that would put part-time workers at a disadvantage. If there is a significant difference in production efficiency of experienced versus inexperienced workers, management should consider a goal that accounts for the learning curve of the inexperienced worker. One program sets sales/production goals against the employee’s three month running average and the stretch goal as a percent increase over the three month average.

Managers must ensure individual/team goals align with the department’s goals which align with the goals of the company. All employees should understand the goals of the company and their role in the success of the organization. Regardless of their role, employees need to know why their job matters. Sales, customer service, shipping, billing, even facilities maintenance all contribute to the success of your company.

  • Carl Hadden

    Associate Director, Florida SBDC at USF, Polk County

    Specialty: Market Research, Business Planning, Financial Analysis, Student Teams

    Carl Hadden is an Associate Director with the Florida SBDC at University of South Florida. Hadden leads a team of 12 business consultants who serve the 10-county Tampa Bay region. He is also a marketing specialist with experience in workforce development, sales, insurance, entrepreneurship and training. As general manager for a wireless phone retailer, Hadden directed the marketing, co-op advertising, purchasing, vendor relations, and human resources. He assisted in implementing a point of sales system for the wireless retailer to automate processes and minimize loss prevention. As a workforce professional, Hadden assisted McGee Auto Service & Tires to secure a partnership with the Polk County School District, which would allow mechanics to get additional training and resources to become ASE certified. He graduated from Leadership Lake Wales Class 13 in 2009. Hadden has an associate’s degree in business administration from Polk State College and a bachelor’s in marketing management from Webber International University. He is also a Certified Marketing Executive, TTI DISC Certified Professional Behavioral Analyst, TTI DISC Certified Professional Driving Forces Analyst, and a Certified LivePlan Expert Adviser.


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