Monthly-Quarterly break-down of lagging indicators
Besides defining an annual target, it is important to devise and define quarterly and monthly targets which are in turn derived from the annual targets. This is a systematic approach which allows for constant assessment and an advance warning system.
Lagging indicators pertain to events which have already happened. A good example is the actual level of sales achieved. It is important to break down the annual target into quarterly milestones and eventually into monthly goals. Tracking the actual performance of the annual goal is more scientific and effective if there is constant monitoring of the performance. This process becomes easier if we have more frequent milestones defined. Having more milestones allows the employee to break his/her execution plan into shorter and more manageable pieces and helps him/her arrive at an appropriate rate of performance per unit of time. This rate is more meaningful if the unit of time is shorter. Having quarterly & monthly targets helps the employee to do just that. This monthly-quarterly breakdown of goals is an important part of the business planning exercise.