> Could you explain why this is sub-optimal? It's sub-optimal because of the added risk? What usually happens is that they make it a quarterly or annual target

> Could you explain why this is sub-optimal? It's sub-optimal because of the added risk? What usually happens is that they make it a quarterly or annual target, so they do things that expensive in the long term to hit the target for the period. For example, I can increase my profit for the quarter in an airline by deferring maintenance, so the plane flies more. But if the plane ends up being out of service for longer next year because of that decision, that is sub-optimal. Another thing they can do is shift revenue around or offer large future discounts for upfront orders or shift project work depending on when end of year is. All things that are suboptimal, but work for the numbers. As a non financial example, one company I worked for had quarterly goals around test coverage. But they didn't really budget time for it. It was just expected that it would somehow be done. What happened was that worthless tests that called as much code as possible without testing anything were written to hit the coverage number. So even when time was available to write tests, the perception was that we already had test coverage so they never got fixed.