Introduction

This article addresses KPIs, the literal meaning of KPI and how they help an organization achieve its business ambition by the very definition, and measure methodology of it. KPIs are not just set for one department. These are company-wide targets set for different departments, teams and projects. While the general perception of a KPI is that it is Quantitative, it can certainly be non-quantitative in addition to a couple of other types of KPIs that exist in the workplace now. Organization these days make KPIs part of an employee’s Performance document so these are measured at various times of the year as the measurement methodology of performance varies in each company. The most common & prevalent type of KPIs are those set for the Sales team. In almost all companies, there is a sales target always that drives the company towards a goal. That said, the KPIs are not just set for Sales but in fact at varying levels in the company, for different departments. The following pages will cover KPIs and different examples of the same in detail.

What is a KPI and examples of different KPIs in an organization

A KPI is called key performance indicator that is a measurable value. It measures the metrics used by organizations for measuring their performance effectively. KPIs measure how well companies, business units, departments, teams and individuals achieve their goals and objectives compared to the target KPIs. The degree of wellness is measured by how many strategic goals/objectives are achieved, how much gets done, how error free it is, how quickly the results come. A well-defined and a well-designed KPI is pivotal to the primary functioning of an organization with clear direction with regards to the level of performance required. KPIs are not just for business, these are set for support functions too. KPIs are not just quantitative. These can be qualitative too. The types of KPI not just end here, details to follow.

Types of KPIs

Type of KPI

The many types of KPI’s that one can use in the business are mentioned below:

Quantitative Indicators –  These are the ones presented with a number.

  • Qualitative Indicators – Those subjective in nature.
  • Input Indicator – Those measured by the usage of resources in the generation of the outcome.
  • Output Indicator – These measure the output or the result of the process activities.
  • Lagging Indicators – Some indicators are lagging indicators and simply tell you how you’ve performed.
  • Leading Indicator – Some measures are leading indicators as they offer guidance on future results.
  • Process Indicators – reflect the efficiency and productivity of the process.
  • Practical indicators – interface with existing company processes.
  • Actionable indicators – are in an organization’s control to effect change.
  • Financial indicators – are used for measuring the performance measurement through the lens of an operating index.
  • Directional indicators – specify whether an organization is getting better.

Why it’s important to choose the right KPI

KPIs direct an organization, department, team or manager react instantly to any events that can impact the business and deliver common goals. These are aligned with the company’s strategic ambitions.

Examples of Department with KPI’s

  • Some of the examples of common departmental KPIs are:
  • Sales
  • Marketing
  • Financial
  • Human Resources
  • Customer Services
  • Operations
  • Communications
  • Supply Chain
  • IT
  • Health, Safety & Environment, HSE

 

KPI Examples

21 Examples of KPIs

Marketing

1. Market Share – Helps studying the market share, where the company stands in terms of its share in the market.

  • Increase market share of product x to 15% in the total South American DIY Sector by year end.

2. Create bench strength strategy for Marketing Director position to be achieved in the next 2 yrs. This KPI helps in having the succession ready for the Marketing director position.

Customer Service

The KPI helps in maintaining the quality of Customer Service at all times.

3. Seek feedback from four customers related to service and delivery on a quarterly basis.

4. Customer satisfaction score of 90%.

HSE

This KPI keeps the health, safety and environments standards in check.

5. Successfully drive the HSE performance of the BU at or below the TRR of 3.

6. Safety & Accidental Rates

Operations

The outcome of this audit score gives an indication of the quality of the process safety management system.

7. Audit score of 4 – giving an indication of the quality of the process safety management system.

From the following list of KPI’s for Workforce Involvement the plant can choose to manage the performance of this element

8. Number of suggestions for improvement that have been evaluated.

9. Employee satisfaction score/results of process safety involvement survey.

Human Resources

The following KPI measures the turnover/attrition rate so the company can manage the numbers.

10. Attrition rate (overall + regretted)

  • Permanent FTEs
  • All Cadres (Permanent FTEs + Contracted Temps + Agency Temps)

This KPI measures the number of recruitments in different cadres.

11. No. of recruitments (YTD)

  • Permanent FTEs
  • All Cadres (Permanent FTEs + Contracted Temps + Agency Temps)

The following KPI measures recruitment cycle time.

12. Recruitment Cycle Time (YTD)

13. Current recruitments exceeding 12 weeks

14. of new hires leaving in first 12 months of joining

15. Exit interviews – graphs for reasons (permanent + contract + agency temps)

This KPI measures numbers of actual manpower, the budgeted numbers and the vacancies.

16. Manpower numbers (budget + actual + vacancies)

  • Management
  • Non-management
  • Trainees
  • Direct contract
  • Third Party Contract Staff

This KPI measures manpower cost i.e. actual & budgeted of management & non-management staff both.

17. Manpower cost (Actual vs. Budgeted)

  • Management
  • Non-management

This KPI measures number of Training and their effectiveness.

18. Training

  • Percentage completion against TNA
  • Feedback analysis

This KPI measures number of Executives (male & female both), number of high potentials & potentials.

19. Number of Executives

  • % of female executives
  • % of executives from high growth markets
  • Average age of executives
  • Average length of service of executives

20. Number of High Potentials & Potentials

  • Number of High Potentials
  • % of Female High Potentials & Potentials
  • % of High Potentials & Potentials from High Growth Markets
  • Average age of High Potentials & Potentials
  • Average length of service of High Potentials & Potentials
  • % of Executive appointments from inside the company
  • Number of appointments based on succession plan (as per bench of last year)

21. Sales (Decorative Paint Business Products)

This KPI measures sales of business products.

 
KPIs No or% age/month No or % age/day
Color schemes 112 7
Previews 56 3
Architects Visits 16-20 0
Tickets Completed 90% 0
Dual Field Visits feedback Very Good 0

References

Walczak, M. (2014). What are key performance indicators (KPIs) and why you should use them.

Reh, J.(2017). The basics of key performance indicators (KPI)

 

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