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What are Key Performance Indicators?

As stated by Peter Drucker “What gets measured gets done.”Key Performance Indicators are indicators that drive an organization towards its goal. KPIs help in setting targets and tracking the target accordingly. KPIs also helps in recognizing the leading and lagging indicators of the organization, thus helping them direct their focus on required areas.KPI thus helps companies to measure and evaluate the performance of employees and manage them as effectively as well as efficiently.

If your performance improvement goals are related to inbound marketing, sales, or any aspect of business for that matter, it is essential to choose the proper key performance indicators (KPIs) it helps to focus on is the first step towards measurable improvement.

As it is said, what get’s measured gets improved. If you can quantify your present performance you can then begin to measure how things are improving, or diminishing, over a course of time.

If you want to measure if your companies performance goals, business units, projects or individuals projects are performing in relation to their strategic goals and objectives, KPIs helps them to measure.

KPI helps in knowing a broader picture that if the company is on the right track on their defined objectives for this to be the case KPIs should be having a navigational instrument giving a clear idea where the company stands and where it has been headed to.

KPIs are also useful decision-making tools. Because they help reduce the complex nature of organizations to a small, manageable number of key indicators, KPIs also, in turn, assist decision making by ultimately, helping in improving performance.

What are the types of key performance indicators?

Metrics are used to measure different aspects of business activity at a particular point in time. KPIs also has strategic objectives to measure performance against a specific target. These targets are further defined in strategic, planning and budget sessions and thus have a range of performance. 

When KPIs are design, it becomes vitally important to think through the possible unintended consequences of measuring them. If we are unable to track   it, we run the risk of the KPI causing more harm than good.

When we are designing a KPI, it’s vitally important to think about the possibility of unintended consequences of measuring it. If we don’t consider it, we might run the risk of the KPI causing more harm than causing any good.

Also, KPIs are metrics, but not all metrics are KPIs.

  • Quantitative indicators are usually presented by numbers.
  • Qualitative indicators need not be measured in numbers but various different parameters in accordance to the requirement.
  • Leading indicators that helps in knowing the outcome of any process
  • Lagging indicators that helps in knowing the success or failure of any process post hoc
  • Input indicators are the one that measures the amount of resources consumed whilst generating the outcome
  • Process indicators it helps in representing the efficiency or the productivity of the process
  • Output indicators it helps in representing the outcome or results of the process activities
  • Practical indicators that interface with existing company processes.
  • Directional indicators this specifies whether or not an organization is getting better.
  • Actionable indicators are in the hands of an organization’s control to effect change.
  • Financial indicators where the user is in performance management and where does it stand on the organization level

What are the key performance indicators for employees?

Irresepctive of industry, when conducting employee appraisals, managers look for competency in critical areas. In every company managers want to see employees are meeting established goals, working as contributing members of the team and applying critical thinking skills to help ensure business operations are successful. There are many key performance indicators, the top areas of attention address key areas of operations.


Team members who work together on projects and initiatives are basically seen as strong and contributing team players. Examples in which employees show a strong sense of team commitment:

  • Participating in group brainstorming. 
  • Volunteering for roles on team projects.
  • Taking up the slack when necessary.
  • Sharing credit.
  • Supporting others' ideas and approaches.
  • Being willing to step into roles others don’t want.

Indications of poor teamwork, on the other hand, include:

  • A lack of interest to participate in group work.
  • A poor attitude toward project objectives or approaches.
  • Lack of participation.
  • Efforts to undermine group work.
  • A lack of feeling to share credit and a propensity to place blame or shift responsibility.


If you have an accurate, appropriate, professional business communication it is an important part of every employee's job. Employers will evaluate these skills with the following parameters in mind:

  • Clear, concise verbal and written communications.
  • Timely follow up to voicemail, email and customer inquiries.
  • Responsive attitude toward colleagues and managers.
  • An ability to accurately articulate concepts, ideas, and feedback.

Lack of communication skills are exhibited by:

  • Lack of ability to deliver clear and concise directives.
  • Unresponsiveness or incomplete responses to requests from colleagues.
  • Communication that includes typos or grammatical mistakes or is inaccurate.

Customer Service

Regardless of the role you are in, you are directly or indirectly helping your customer base through your position. Your employer will measure your work in critical performance areas related to customer care, including:

  • Polite, professional interactions with customers.
  • Ensuring problems are handled rather than being passed off.
  • Offering them with solutions or ways to resolve customer complaints.
  • Timely responsiveness to customer needs.
  • Good representation of the company.

Bad customer service skills you might be called out for include:

  • Slow reaction time to customer issues.
  • Failure to offer solutions.
  • Lack of empathy or understanding. 
  • Lack of willingness to deal with customers and displaying anger or frustration in handling problems.

Job Functions

Key performance indicators  that are related directly to your job roles and  functions will be valued during an evaluation, but this specific area will vary based on your role and responsibilities. Key performance indicators might include:

  • Timeliness
  • Attention to detail.
  • Creativity and innovation.
  • Good time management.
  • Ability to perform in all key areas of the role.
  • Consistency
  • Initiative

Employers will also track that if the employee has met pre-established goals during the time period between appraisals. Key performance Indicator are typically specific to your job roles and job function and may include anything from learning a new software program to leading a team onr hitting an earnings goal.

HR departments track KPIs such as employee satisfaction levels and turnover rates, while the KPIs that IT managers look at include system uptime, compliance with service-level agreements, on-time project completion value and total average resolution time on help desk tickets.

How to create KPIs?

If you wish to know how the KPIs can be created here’s a quick walk through it:

Define your objective clear.

If a goal of the business is to be the 'market leader', then a KPI objective maybe used to 'increase revenue by 10% this financial year' or 'Expand our product lines to 20'. State clearly, and in simple terms the purpose of the KPI. This can provide guidance for everyone in viewing the KPI to interpret the actual data in the correct context.

Draft the criteria for success.

What will the target be? Is it attainable? when should it be accomplished? and how will progress be monitored? Targets should be realistic, changes to business processes take time to implement. In the initial stages of KPI monitoring it's best to focus on long-term targets with midterm monitoring.

Acquire sufficient data.

Investigate the availability and accuracy of the data. Data may be available automatically from existing systems or hidden in reports and databases. This data will all need to be pulled together at regular intervals for reporting in one central place.

Formulate the KPI.

Some KPIs contain a single metric or measure. However most rely on a combination brought together under a single calculated formula. For example, a KPI that measures productivity in revenue by machine would look like this: Total Revenue divided by the total number of machines. Build formulas and create calculations with test data to see if the results are what you would expect.

Present your KPIs.

To efficiently communicate your KPIs you'll need to translate the data into understandable visuals such as graphs and charts. Dashboards for Operational KPIs, or Reports for Strategic KPIs offer a convenient way to create, track and distribute your KPIs.

When KPIs are used, their impact goes beyond our intention on monitoring our goals and reaching targets. KPIs also helps in measuring the people’s influence behavior and the results of other measures. These influences can be unexpected and undesirable, so we must either change them or choose another way to measure. When the measures are quite severe, you may also want to give these measure a trial period. You’d be wise to monitor the unintended consequences to find out how bad they really are, and how realistically you can mitigate them.