EP150 – Objective Measure Of Success- KPI
KPIs allow to see what we’re really achieving, and that’s important for everyone.
#AdvancedQualityProgramms #TheQualityGuy #KPI #Performance
“Limitations are often self-imposed,” a quote attributed to Bertha Benz, highlights the power of human potential. KPIs help us measure actual performance against goals.
Imagine you are going full throttle at work, day after day, but your performance seems to disappear into the invisible for the Leaders of the organization. Maybe there’s even trouble from them because they only see the mistakes instead of all the things you accomplish. Frustration would only be a mild expression, wouldn’t it?
In today’s world, where first-class specialists are rare, such an approach by managers is not only risky but could prove fatal if the employees become dissatisfied at some point. That’s where Key Performance Indicators, come in. KPIs are not only important tools for managers to measure and evaluate performance but also for employees to track their progress and strengthen their engagement. KPIs allow to see what we’re really achieving, and that’s important for everyone.
Objective measure of success:
KPIs serve as an objective measure for the success of companies, projects, and employees and allow for a clear evaluation. Clear definition and measurability: Selecting KPIs requires clear definition, measurability, relevance, and timely capture to ensure that they effectively contribute to performance evaluation. Focus on what matters: Analysing KPIs allows you to focus on the critical aspects of the business to ensure that business goals are met, and the right course is maintained.
What are KPIs?
KPI is an abbreviation for “Key Performance Indicator”, a KPI is a key figure or metric that is used to measure the definition of success for a company, project, or an individual. KPIs can be used for various aspects of the business, such as revenue, profitability, customer satisfaction, and employee satisfaction. It is a way to quantify and evaluate the performance of the company, project, or person and their contribution to the success definition.
Why are KPIs important?
KPIs are important because they provide an objective measure of the success of a company or project against their goals. By quantifying success, we can determine if we’re on track to achieve our goals and make adjustments to ensure we’re getting the results we aim for. KPIs can also help keep the focus on the most important aspects of the business and ensure that the company or project stays on track.
How do we choose the right KPIs?
It’s important to choose the right KPIs to ensure they deliver the results we want. An effective KPI should be clearly defined, measurable, relevant, and detectable in a timely manner. There should also be enough data available to measure it meaningfully. When choosing KPIs, you should also make sure that they are focused on the most important aspects of the business and not just metrics that are easy to measure but not necessarily meaningful.
How are KPIs determined?
The determination of KPIs depend on the specific goals of the company or project. First, clear goals and metrics must be set against which success is to be measured. Data without corresponding target values makes no sense.
The data must be collected and analysed to determine the metrics to use. This data can come from different sources, such as sales data, customer feedback, employee surveys, or web analytics tools.
How are KPIs analysed?
Once the KPIs have been selected, it is important to analyse them regularly with the goals in mind to ensure that the company or project stays on track. This often requires the use of statistics to identify patterns and trends within the data. The most important thing is to observe the trends over time to evaluate if there are any improvements or deteriorations. Analysis can also help identify problems early on and take action to resolve them in timely matter.
Examples of KPIs
There are many different KPIs that can be used for different aspects of the business.
KPIs for companies and projects
- Revenue: Total revenue, average revenue per customer, revenue growth rate
- Profitability: Gross margin, net profit margin, return on investment (ROI)
- Customer satisfaction: Net Promoter Score, customer satisfaction index, customer complaints
• Employee satisfaction: Employee turnover, employee satisfaction survey, employee engagement
KPIs for employees
- Productivity: Measuring the number of completed tasks or projects per time period
- Quality of work: Assessment based on accuracy, error rate, and customer satisfaction.
- Goal achievement: Checking whether the individual goals and those of the company have been achieved.
- Engagement: Assessment of commitment, initiative, and interest in the job.
KPIs are important to measure and evaluate while tracking progress and strengthen engagement. KPIs allow to see what we’re really achieving, and that’s important for everyone to understand.
“To change the world, sometimes you have to be the change.” Attributed to Bertha Benz