The beyond budgeting round table came to the conclusion that “fixed targets” generate only a mediocre performance. Budgets, performance measurement systems, performance appraisals, etc. include fixed contracts”. Manager and controller of companies assume that the future (such as sales in the next year) is absolutely predictable and galvanize the team on a fixed performance. It is top-down planned and controlled. As a result, Regularly targets are obsolete just a few weeks after determining.
In many companies, created in the yearly targets and assesses the performance of employees by nominal / actual comparison. “The work of the international research group beyond budgeting round table” already in the 90s years showed that fixed objectives “evoke only a mediocrity to excellence among employees. The preparation of budgets, which serve as a basis for the objectives in the coming year is time consuming and very expensive. Sarcastic one could say, is to create a coffee grounds like”. Already say to can to be reckoned with what debts in two years or how the current market situation is developed clairvoyance. Fixed budgets and objectives lead to a management culture that is characterized by command and control.
As a result, Motivation of employees, no chance more to adapt to market changes, employees in the company are not supported, lone are the order of the day. Everyone is striving to achieve its ambitious goal, without regard to colleagues. “The sales the customer be fed frequently: the customer needs the goods immediately, no matter how you get there.” Who in the future would like to adapt to the dynamics of the markets, must be quick to react to changes. It required employees who think and to fellow entrepreneurs. The new approach: Relative targets users of this concept are such as the Japanese car company Toyota, the Swedish Svenska Handelsbank which furniture group IKEA, W.L. Gore, Hilti, Southwest airline etc.