This document discusses key performance indicators (KPIs). KPIs are quantitative and qualitative measures used by organizations to evaluate success in meeting goals. They are set as targets for departments and individuals to achieve at regular review intervals. KPIs should be specific, measurable, achievable, relevant, and timely. They need to align with organizational goals and values to shape employee behavior. Identifying effective KPIs involves defining business processes, requirements, measurements, and investigating variances to goals.
This document discusses key performance indicators (KPIs). KPIs are quantitative and qualitative measures used by organizations to evaluate success in meeting goals. They are set as targets for departments and individuals to achieve at regular review intervals. KPIs should be specific, measurable, achievable, relevant, and timely. They need to align with organizational goals and values to shape employee behavior. Identifying effective KPIs involves defining business processes, requirements, measurements, and investigating variances to goals.
This document discusses key performance indicators (KPIs). KPIs are quantitative and qualitative measures used by organizations to evaluate success in meeting goals. They are set as targets for departments and individuals to achieve at regular review intervals. KPIs should be specific, measurable, achievable, relevant, and timely. They need to align with organizational goals and values to shape employee behavior. Identifying effective KPIs involves defining business processes, requirements, measurements, and investigating variances to goals.
This document discusses key performance indicators (KPIs). KPIs are quantitative and qualitative measures used by organizations to evaluate success in meeting goals. They are set as targets for departments and individuals to achieve at regular review intervals. KPIs should be specific, measurable, achievable, relevant, and timely. They need to align with organizational goals and values to shape employee behavior. Identifying effective KPIs involves defining business processes, requirements, measurements, and investigating variances to goals.
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Date Key Performance Indicators (KPIs)
A key performance indicator (KPI) is a type of performance measurement (Carol,
1990). An organization may use KPIs to evaluate its success, or to evaluate the success of
a certain activity in which it is engaged. Sometimes success is defined in terms of making
progress toward strategic goals but often success is simply the repeated, periodic
achievement of some level of operational goal. They are also quantitative and qualitative
measures used to review an organization’s progress against its goals. These are broken
down and set as targets for achievement by departments and individuals. The
achievement of these targets is reviewed at regular intervals (Robert, 2003). KPIs are
used to monitor the performance of a company, department, process or even an individual
machine. They will also help shape the behaviors of employees within the company
(Robert, 2003).
KPIs need to be flexible and reflect the changing goals of the organization. Goals
change as the organization changes in reaction to external factors or as it gets closer to
achieving its original goals. Individual KPIs need to be directly linked to organization
goals and objectives, or overall organization KPIs where they are used. They need to
reflect organization culture and values, by indicating the types of behavior and
performance the organization will recognize as ‘successful’ and reward employees for.
(David, 2012). KPIs need to be measurable and reflect a balance between operational
and people orientated measures. KPIs are a fundamental component of sustaining a
change process and maintaining a performance management culture. KPIs should be
aligned with the organization’s vision and direction. When performance is measured, and
the results are made visible, organizations can take action to improve (David, 2012). SMART KPIs
The acronym SMART is often used to describe KPIs (Specific, Measurable,
Achievable, Relevant, Timely, and Specific) (Bernard, 2012).
Specific
KPIs need to be specific to the individual job and if possible expressed as
statements of actual on-the-job behaviors. For example, a KPI should: Explain clearly to
the employee what he/she has to do in terms of performance to be successful.
Measurable
KPIs must be measurable, that is based on behavior that can be observed and
documented, and which is job-related. They should also provide employees with ongoing
feedback on their standard of performance.
Achievable
Performance management needs to be an open, collaborative communication
process. KPIs must be seen by all that they are achievable.
Relevant
The KPI must be realistically achievable. If it is set too high for the circumstances
(such as an ambitious production target), not only will it be irrelevant but it will ensure
failure.
Timely
KPIs should have an appropriate time frame. It should be possible to collect the
relevant information either ‘as it happens’ or within a short time afterwards, otherwise it
will lose its relevance. As outputs of the performance management system, KPIs also need to be in alignment with other HR-related functions, including training and
development, recruitment and selection, rewards and recognition, and career planning.
Performance indicators differ from business drivers and aims (or goals). A
business might consider the percentage of income from returning customers as a potential
KPI. The key stages in identifying KPIs are: (David, 2012).
Having a pre-defined business process (BP).
Having requirements for the BPs. Having a quantitative/qualitative measurement of the results and comparison with
set goals. Investigating variances and tweaking processes or resources to achieve short-term
goals
References
Bernard, M. (2012). Key Performance Indicators: The Measures Every Manager Needs to
Know. Financial Times/ Prentice Hall. ISBN 978-0273750116 .
Carol, T., (1990) "Performance indicators." BERA Dialogues.
ISBN 978-1-85359-092-4.
David, P. (2012). Key Performance Indicators. John Wiley & Sons 2007, ISBN 0-470-
09588-1 .
Robert D.A. (2003). "Measuring and Managing Performance in Organizations."
