The function assesses the deviation between an actual value and a predetermined goal, expressing this difference as a proportion relative to the target. For instance, if a sales team aims for $100,000 in revenue and achieves $80,000, the calculation determines the percentage of the target that was attained, as well as the shortfall percentage.
Quantifying progress toward objectives allows for objective performance evaluation and facilitates informed decision-making. Understanding the degree to which goals are met is essential for resource allocation, strategic adjustments, and overall organizational efficiency. Historically, this type of computation has been a cornerstone of performance management across various sectors.