Now picture this. When we started adopting Scrum we were, as expected, adopting also timeboxed software development (a key part of scrum). But the targets were that we should always be on time (+-10%).
So, get this: you get more money if you are on time (to motivate you to be on time, I guess) but your process is timeboxed! Easy money as they say...
The morale in this story is that targets are useless! If you want to improve the system (R&D for example) you need to manage the system, not set targets!
By adopting Scrum (effectively changing the system) we were able to be 100% on time! And that had nothing to do with the target setting, the system design (using Scrum) was the reason!
This is an insight that many managers don't have today: as manager you must design and manage the system. Setting arbitrary targets and not providing a method (system) is useless!
The video below of a conversation with John Seddon, is a very good explanation of how targets are useless and even counter productive. I especially loved his points:
1. there's no reliable method for setting a target
2. when you use targets or any other arbitrary measure you drive waste into your system
3. once you learn how to use measures derived from the work, and you involve the people who do the work you achieve a level of performance you would never have set as a target.