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Key Performance Indicators

Key Performance Indicators (KPIs) are quantifiable measures that help companies gauge and compare their performance against strategic goals. KPIs vary between companies but generally measure aspects like efficiency, quality, and financial or operational results. Well-designed KPIs should be clearly linked to strategy, empower employees, and help answer important business questions. There are different types of KPIs like process, output, and qualitative/quantitative, and good KPIs are specific, measurable, achievable, relevant, and time-bound.

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541 views

Key Performance Indicators

Key Performance Indicators (KPIs) are quantifiable measures that help companies gauge and compare their performance against strategic goals. KPIs vary between companies but generally measure aspects like efficiency, quality, and financial or operational results. Well-designed KPIs should be clearly linked to strategy, empower employees, and help answer important business questions. There are different types of KPIs like process, output, and qualitative/quantitative, and good KPIs are specific, measurable, achievable, relevant, and time-bound.

Uploaded by

Abdul Hafeez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Key Performance Indicators

 Key Performance Indicators (KPI) are a set of quantifiable


measures that a company or industry uses to gauge and
compare performance in terms of meeting their strategic and
operational goals.

 KPIs vary between companies and industries, depending on


their priorities or performance criteria. Also referred to as "key
success indicators (KSI)".
Why Use KPI’s ?

 Performance effectiveness.

 For the accuracy, actual reflection of the process, efficacy in


delivering the outcome.

 The effects of a change can be monitored reliably, repeatedly


and accurately by KPI.
Designing of KPI’s

 KPIs should be clearly linked to the strategy, i.e. the things


that matter the most.

 KPIs have to provide the answers to our most important


questions.

 KPIs should be primarily designed to empower employees and


provide them with the relevant information to learn.
Identifying the KPI’s

 Related to strategic aims.

 Identify what makes the organization success or failures.

 Controllable and accountable.

 Qualitative and quantitative.

 Long term and short term.


Contd…

 Consider Stakeholder needs.

 Identify important aspects.

 Establish Company Goals and KPIs.

 Select Performance Indicators and Metrics.

 Set Targets and Track Performance.


Types of KPI’s

 Process KPIs - measure the efficiency or productivity of a business


process. Examples - Days to deliver an order.

 Input KPIs - measure assets and resources invested in or used to


generate business results. Examples - Dollars spent on research and
development, Funding for employee training, Quality of raw
materials.

 Output KPIs - measure the financial and nonfinancial results of


business activities. Examples – Revenues.

 Leading KPI measure activities that have a significant effect on


future performance.
Contd…

 Lagging KPI is a type of indicator that reflect the success or failure after an
event has been consumed. Such as most financial KPIs, measure the output of
past activity.

 Outcome KPI - Reflects overall results or impact of the business activity in


terms of generated benefits, as a quantification of performance. Examples are
customer retention, brand awareness.

 Qualitative KPI - A descriptive characteristic, an opinion, a property or a trait.


Examples are employee satisfaction through surveys which gives a qualitative
report.

 Quantitative KPI - A measurable characteristic, resulted by counting, adding, or


averaging numbers. Quantitative data is most common in measurement and
therefore forms the backbone of most KPIs. Examples are Units per man-hour
Characteristics of a good KPI

 KPI is always connected with the corporate goals.

 A KPI are decided by the management.

 They are the leading indicators of performance desired by the


organization.

 Easy to understand

 Key Success Factors (KSFs) only change if there is a fundamental


shift in business objectives.

 Key Performance Indicators (KPIs) change as objectives are met, or


management focus shifts.
Defining KPIs
KPIs are usually developed following the well-known S.M.A.R.T. criteria
originally developed by George T. Doran (Management Review, 1981)
and popularized by Peter Drucker.

 Specific

 Measurable

 Achievable

 Result-oriented or Relevant

 Time-bound

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