I just got off the phone with an entrepreneur at a fast-growth company who has been particularly successful at getting results by setting basic daily operating targets for all of his employees (eg, number of sales calls made, number of customer contacts per day, speed of processing mail, etc.)
He says that if you look after the daily inputs, the important quarterly performance quotas and targets look after themselves. Few businesses have the discipline to look at things this way, but it makes a lot of sense.
I asked if it was mainly a function of the old saying. "What gets measured gets done." That's partly it, he agreed, but he then quoted a more appropriate adage I hadn't heard before, which takes that one step further: "People will do not what you expect - but what you inspect."