For more on this I recommend both <i>The Goal</i> and <i>Out of the Crisis</i> (the latter more, but the former also discusses this).<p>Targets are often useful because they're proxies for the unmeasurable. But, as discussed in the article, they can easily become goals themselves, which take you away from the actual intended business of the day.<p>In <i>The Goal</i>, the company has a target of 100% productivity of all equipment/work stations. The thought being, if it's not producing then that's lost time. However, it increases costs (overall) because you end up with excess inventory leading to the constraint or bottleneck of the system. That inventory has no value (it's not sold or sellable) and has costs (storage, at a minimum; possibly maintenance) and can become stale (becoming worthless, at which point with the carrying cost it has negative value). EDIT: Another problem with that target is that it penalizes those at the end of the production chain, who <i>can't</i> maintain high productivity (they're after the bottleneck). Their production rates are limited to whatever the bottleneck can produce. Ever been in the IV&V team? "We're late because of you...", no you're late because we received the product one month before it was supposed to ship.<p><i>Out of the Crisis</i> also discusses another problem with targets: If it was just a matter of setting the target, why were you missing it in the first place? There's a larger system the employees fit in which constrains their performance. Address that system, or the target will be unattainable or unsustainable.