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Key Performance Indicator

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Key Performance Indicator essay

Key Performance Indicator is a set of quantifiable measures tools that demonstrates how effectively is the company achieving from the key business objectives. Company use KPIs at multiple levels to evaluate the success of it in a particular activity such as project, product, programs .and its success to reaching their targets.

The key Performance Indicator characteristics must be based on a factors that show how its related to the business objectives. And another important factor is that they have specific time-frame divided into key checkpoints.

Characteristics of KPIs

In term of developing a new strategy for formulating KPIs, your team should understand what your organizational objectives are and start with the basics, and how you plane to achieve the organization target.

Most organizations use the industry-recognized KPIs and then they ask why that KPI doesn’t reflect their own business and fails to make any positive change. One of the most important aspects of the KPI is that they are a form of communication. And it is controlled by the same rules as any other type of communication.

What makes a KPI effective?

The high-level of the key Performance Indicator is focus on the overall performance of the company while low-level of key Performance Indicator may focus on processes in the departments of the organization.

  • Timely: company should say the result of the KPI frequently so the employee can make timely decision but not too frequently because they will be overwhelmed with data.
  • Visibility: make KPI visible to the employee; this will make them work harder and be more productive.
  • Actionable: it can effect in the company or not
  • Directional: determines if the company is getting better or not
  • Practical: can be used in the company current job
  • Quantitative: it can be measured, it helps the employees to measure and analyze their performance. A KPI does not have to be quantitative to be measurable
  • Simple: it should be simple and easy to understand from the employees, KPI will be more simple when we do it sparse, and focusing in a small number of KPIs makes employees understand it deeply and they can make the right change on it to deliver better results.

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