In a sales organisation the sales order processing department handled a number of bogus orders at the end of each quarter. Salesmen were cheating to make up their numbers. By the time cancellations came through, the work of other departments (manufacturing, buying, distribution, invoicing) was already underway. The quarterly ‘hump’ created only unnecessary and wasted work.
Using targets can be costly. Some of the costs are obvious, but the most important remain unknown. How much does it cost to deal with complaints, to do things more than once and compile reports on the problems? More importantly, how much does it cost to lose a customer, or prospective customers, through negative word of mouth?