Describe some of the pitfalls of using a budget or target to assess performance and explain how Rita might overcome these pitfalls.

Encourages Short-Term Focus: One of the pitfalls of using a budget or target to assess performance is that it can encourage a short-term focus. Employees may focus on meeting the immediate targets at the expense of long-term strategic goals. To overcome this, Rita can ensure that the budget or target is aligned with the long-term goals of the organization. She can also regularly review and adjust the targets to ensure they are still relevant to the long-term goals.

Creates Pressure and Stress: Another pitfall is that budgets and targets can create pressure and stress among employees, which can lead to unethical behavior or burnout. Rita can overcome this by creating a supportive work environment where employees feel comfortable discussing their challenges and concerns. She can also ensure that the targets are realistic and achievable.

Discourages Innovation: Budgets and targets can also discourage innovation as employees may be reluctant to take risks for fear of not meeting the targets. Rita can encourage innovation by rewarding not just results, but also effort and creativity. She can also create a culture where failure is seen as a learning opportunity rather than a setback.

May Not Reflect Current Market Conditions: Budgets and targets are often based on past performance and may not reflect current market conditions. Rita can overcome this by regularly reviewing and updating the budget or target to reflect changes in the market conditions.

Can Lead to Resource Misallocation: If budgets and targets are not set correctly, they can lead to resource misallocation. For example, departments that are able to meet their targets easily may receive more resources than they need, while those that struggle may be under-resourced. Rita can prevent this by ensuring that the budgeting process is transparent and involves input from all relevant stakeholders.