Key Performance Indicator (KPI)
I. Characteristics of KPI
KPI is a term specifically used to indicate criteria adopted in evaluating the employee’s performance. Following are some characteristics of KPI:
1. A KPI must be aligned with the organization’s objectives;
2. A KPI is determined by management personnel (normally human resource managers);
3. A KPI must be designed so that it is easy to understand;
4. Some KPIs are specifically designed for each employee;
5. KPIs are expected performance by the organization;
6. KPIs must be designed to balance the evaluation of each employee;
7. KPIs lose their accuracy over time; therefore, it is necessary to revise KPIs periodically.
II. Requirements of a KPI:
An effective KPI should be:
4. Performance relevant;
5. Containing deadline requirement.
III. How to design a KPI?
1. Design Key Result Areas (KRAs) and the importance of each KRA;
2. Identify necessary procedures to perform each KRA;
3. Identify the measurement criteria for each KRA and evaluate the importance of each criterion;
4. Summarize the criteria and the importance of each criterion;
5. Develop a summary table of KPIs.
IV. KPI examples
You can use free KPI examples for fields as follows:
1. Human resources KPI (includes KPIs of employee loyalty, labor relation, compensation, training and development, recruitment etc.)
2. Sales KPI (includes KPIs of sales rep, sales contact by telephone, shops and supermarkets management, customer loyalty, customer care etc.)
3. Marketing KPI (includes KPIs of public relations, promotion, advertisement, e-marketing etc.)
4. Production KPI (includes KPIs of material management, order management, productivity KPI, quality, maintenance etc.)
5. Purchasing KPI (includes KPIs of delivery on time , delivery is not enough quantity / quality, quantity bought over required, purchasing cost, cost of purchasing units, transaction cost unit of purchasing, suppliers rating etc.)
6. Financial KPIs (KPIs includes KPIs of asset management, payroll management etc…)
7. Accounting KPIs (includes KPIs of accounts payable management, accounts receivable management etc…)
V. Related KPI posts
• KPI ebooks (download free and ref all ebooks related to KPI application).
Best performance appraisal resources
1. Balanced Scorecard Toolkit and Trainings. This ebook provide top managers, CEOs and independent business consultants with ready-to-use e-products for Balanced Scorecard, such as Balanced Scorecard Toolkit and Balanced Scorecard Practical Training.
2. Employee Performance Appraisals Forms. Benefits of this ebook include: Make your “fair” help good & make your “good” help great; Improve efficiency; Save hours upon hours of time; Get what you want out of every hourly dollar you pay your employees! Even your best employees need to know they are appreciated; Impress your boss or, if you are the boss, motivate your staff by giving them the feedback they NEED to be a better employee etc
3. Phrases For Performance Appraisals. Benefits of this ebook include: A collection of hundreds of ready-to-use impactful appraisal comments and phrases; Phrases to highlight your key strengths and achievements; Phrases to downplay your weaknesses to soften the impact on your overall performance; A comprehensive list of phrases covering most of the categories of KPIs used by many companies; Guidebook provided in Microsoft Word softcopy for your easy copy, paste and modify in your appraisal form; Guidebook provided in Microsoft Excel spreadsheet so that you can use it also for your employees’ appraisals and easy moderation! etc
4. Employee Performance Review: Tips, Templates & Tactics. Contents of this ebook include: Probation policies and templates, performance review tips, performance appraisal tips; Performance review tips, performance appraisal tips performance review policies and templates; Performance review tips, performance appraisal tips learning & development policies and templates; Performance review tips, performance appraisal tipspoor work performance policies and templates etc
5. Managers Guide to Performance. Contents of this ebook: How to deal with an employee who displays negative behavior….help them deal with their own issues and change their behavior; How to coach an employee to higher performance….employees want your leadership and will follow a strong manager; How to be clear about what you expect from them….an employee always wants to know how to best perform; How to give your employees the opportunities to perform……if they can’t or won’t, then how to let them go.