Management by Targets

There's been quite a lot in the news over the past year about the management styles of the banks that led them to reward the wrong behaviour and drive them to the brink of insolvency. That started me thinking about the way that management style has changed in the past three decades I have been working.

When I began work in the seventies, the office environment was quite different. There were no office computers for a start (the only ones used by business were in large rooms tended like temple gods by priests and priestesses behind locked doors, and used only for applications with high returns given the then astronomical cost of computer power). There were in relative terms large numbers of secretarial staff, as all documents needed to be typed. Businesses communicated by phone, letter and occasionally by telex.

The management environment for staff was different too. Staff expected to change jobs less often. The emphasis was in doing well, and employers encouraged staff to improve - there was much focus on training, development of individual capability in the right directions for the business, and getting staff to the point where promotion could be envisaged.

Staff performance assessment consequentially was more qualitative than quantitative. This had the drawback that assessment was more subjective, but usually there were enough people involved in the review processes that there was little scope for personality clashes to spoil a person's career. What we didn't have were individual targets (sales personnel excepted), but I don't think that made us any less committed to do well. We did have bonuses, usually related in some way to company performance, and relatively modest in scale compared with today's incentives.

Today of course every member of staff in all the companies in which I've recently worked have individual targets, and often large bonuses, based largely on achievement of their own personal targets. These targets are by their nature short term, and so increasingly are corporate objectives - show revenue and profit growth not just this year, but this quarter or even month, and we'll worry about next year when we get there.

The results are predictable. Managers drive their reports rather than lead them, often with unpleasant "macho management" (at least the real bullies of old are now curbed by modern employment law). Staff work in stressed conditions, focus single-mindedly on their targets even when it becomes clear these are not in the company’s interests (the company being powerless to change them once committed), and matters of true good performance and development of capabilities are lost. How many staff in, or aspiring to, management grades work the contracted number of hours per day or week? Many routinely work up to a couple of hours a day extra, with getting in a bit early, cutting lunch hour, and leaving an hour or more late - and this is not paid overtime.

It certainly riles me to go into a staff assessment interview, and have a discussion on the lines of:

"You didn't achieve your targets."

"No, but they became less important due to x and y, and I couldn't achieve them. I think I am good at my job, don't you?"

"That's not for me to say: you didn't achieve your targets."

This inability to recognise competence unless it is measurable - and only targets are measured - is one of the reasons why I've focused more and more on contract work than employment, where you are judged on performance and "results" (in a general sense) and not on targets.

There are of course some notable advances in modern management methods. In particular I would note the improved way that women are treated nowadays, which in most of the offices I've worked in recently is genuinely on an equal footing with men.

However there is no getting away from the fact that target based staff management rather than competence based rewards does seem to me to be a doubtful improvement - one the victims of the excesses of the city traders and bankers might well agree with.

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