Key Performance Indicators
Key Performance Indicators, otherwise known as KPI are integral to defining your business’s success and failures. They identify quantifiable measures that support the strategic goals of the company but are also essential to measure the success or failures within a team or at an individual level if set up correctly. They can also provide key data points to track company health, make adjustments or improvements and measure progress.
KPIs can provide you with a snapshot at any point in time towards a certain business or team milestone. There are several types of KPIs that are important to monitor as a business, however, the rule of thumb “measure what you are intending to manage” is applicable to all of them. It would not be efficient to measure KPIs that do not align with your business priorities or support success in your teams and individual employees.
Types of KPIs
Types of KPIs could include:
- Sales and Marketing
Setting business KPIs that align with strategic goals, which are interpreted into the team and individual goals gives employees visibility into how their individual input contributes to the overall goals of the organisation, linking them to the mission and vision of the business.
On an individual level, assigning KPI’s and monitoring an employee’s performance against them, can form the basis of performance discussions, both positive and negative. Achieving a KPI could trigger a celebration or recognition, subsequently falling short of a KPI could lead discussions on improvement individually. If an employer engages with an employee in discussions on KPI expectations, it would be recommended to also provide the roadmap or milestones required to meet the target. For example, In a telemarketing role a potential KPI could be to achieve a certain level of conversions from calls to sales. To achieve this the employee could be given the average rate of conversion as a metric and then work to determine a KPI based on the data available. Using KPI’s sets clear performance expectations for employees and removes some of the ambiguity that can occur in performance conversations with no measures of performance in place.
In order to be successful, a KPI should be;
- Be relative to the individual, team or company (applicable to the employees tasked to achieving them)
- Practical for execution in the current company landscape (establish a process for achieving the KPI)
- Quantitative (easily measured and presented in numbers)
About Employment Innovations
Employment Innovations is one of Australia’s leading providers of employment services designed to increase productivity and ensure compliance. Its services and solutions include all the tools that every Australian small to medium sized employer needs – including workplace advice, legal services, payroll solutions, migration, human resource management and HR software.
The information provided in these blog articles is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact Employment Innovations for advice.