Key Performance Indicators: Concept, Types, Importance And Advantages:

The Short form of Key Performance Indicators is KPI. It is an abbreviation which is used to collect data, summarise it and make a final decision on a product. KPI may be a single calculation or value of something which can be used indirectly to measure something. A company uses this information to make more informed decisions about business operations and strategy.

Now, what are the five key Performance Indicators??

Revenue growth
Revenue per client
Profit Margin
Client retention rate
Customer Satisfaction

Now, How to set KPI for Staff

As we know there is always one thing that matters in everything in a matter that simplicity matters a lot, if you simply write simple things, it is more understandable and easier to read and understand. So always try to keep the KPI as similar as much as you can.

One thing also matters here a lot: that it should be aligned with your work. What you want to say or what you think is always connected with the KPI.

Be SMART because everything is changing nowadays gradually but also rapidly. You may not be aware that technology changes day by day, but always think that technology is changing very very rapidly.

As you move to start the work with a strong team member and going to do all the things with all your passion. So always try to get your team excited for KPI.

Steps For Write A Strong KPI:

Step 1 – Identify your organisation’s strategic objectives.

Step 2 – Define the criteria for success.

Step 3: Develop key performance questions.

Step 4- Collect supporting data.

Step 5: Determine what to measure and how

frequently you should measure.

Step 5: Develop the KPIs.

Why Are KPIs Important?

KPI always strengthens employees’ morale and then helps to provide them with strength.

KPI also support and influences business objectives

KPI helps to create strong business management and helps everyone to reschedule and resolve the task as per the guidelines generalised by the office.

As a company grows there is a huge difference between an organisation’s profit and an individual’s effort. When people themselves feel responsible they are more likely to do the same job which they hate initially. KPI is the most important and necessary part of an organisation’s profit, without it, nothing can be obtained by profit management.

Importance of KPI

Most businesses set strategic goals they desire to achieve. One way to measure an organisation’s progress toward achieving these goals is to use key performance indicators. For example, a company has a goal to reduce defects in its production line from 5 per cent to 1 per cent. To know whether it’s achieving its goal, the company establishes a KPI called defect rate.

The defect rate KPI measures the number of defects produced before and after implementing any process improvements. Without implementing the KPI, the company would not have precise data to know if it has achieved its goal.