Hobby Mart Hobby Mart is a regional retailer focusing on serving hobby enthusiasts in the Mountain West region of the U.S. The retail chain has 65 stores spread throughout 8 states. The chain prides itself as being a one-stop shop for hobbies such as woodworking, models, arts, and crafts. It also employs hobby specialists who can advise and instruct customers on products and techniques. Each store is run by a manager, who reports to the VP of operations in the central headquarters. Managers make most of the decisions for each store, including employee scheduling, inventory ordering, and most pricing decisions. Therefore, each store is operated as a profit center for evaluation purposes. Its mission statement is: "We will be an outstanding retailer serving the needs of the hobby enthusiast with both merchandise and expertise".

Setting Goals Hobby Mart senior managers implemented the performance measurement system several years ago, with mixed success. Some stores were in larger metropolitan areas with higher revenue volumes and better access to skilled employees, so they naturally performed better on several of the metrics. To alleviate this problem, management decided to change the evaluation process to reward managers for meeting annual targets rather than just maximizing results. Performance bonuses represented about 25% of the annual compensation for a store manager if all targets were met. Meeting fewer targets would reduce the bonus, potentially to zero. To set a target, a manager would review the previous results and submit a proposed goal to the VP of operations. The VP of operations, having the same historical information, would simultaneously submit a proposal for each goal without referring to the managers individual proposal. The two would then meet to determine the appropriate final goal for the year.

Your Role You are to assume the role of the VP of operations. You are new to the job as of about 9 months, so you have not done any previous goal setting. While you have visited each store and met each manager, you havent worked with them long enough to form solid impressions of their abilities yet. For your task, you will be presented with a few goals and standard-setting exercises. You will have some historical information regarding what the goals and results were from previous years. In some situations, you will have other information which can inform your decision further.

Your task is to read through the information and set goals for each of the two store managers. You are free to use whatever portion of the information you deem appropriate. Please identify a goal for each of the four performance measures for each of the two managers (eight goals in total).

Hobby Mart operates 65 stores throughout its region. While individual store results change regularly, company-wide averages have been remarkably stable for the past several years. The company-wide averages are as follows: Past Performance for Store \#25 Profit Margin target for store \#25 for Year 6 ? Past Performance for Store #25 Mystery Shopper target for store \#25 for Year 6 ? Past Performance for Store \#25 Inventory Turnover target for store \#25 for Year 6 ? Past Performance for Store #25 Rev/Employee Hour target for store \#25 for Year 6