Most companies set their goals based on last year’s numbers, plus 10%.  Then they set the minimum based on the previous year.

The problem is that there are many two thumbs up and many caution signs.  If a sales person does 11% below goal they receive a caution sign.  If someone does 75% below goal they also receive a caution sign.  (Caution signs are not as eye opening and instructive for management as they should be).

We advocate a 25% difference between goal and minimum.  If someone receives two caution signs in a row they may be experiencing a personal crisis or possibly an issue we can help them with.  We as managers may be able to help them before it’s too late.  Many managers can use this new information to head off losing a potentially valuable employee.