The Basics of Key Performance Indicators (KPI) https://www.thebalance.com/key-performance-indicators-2275156 By Updated March 31, 2017 , also known as KPI or , help managers and employees gauge the effectiveness of various functions and processes important to achieving organizational goals. Some Examples of KPI KPIs are intrinsically linked to a firm's strategic goals and are used to help managers assess whether they're on target as they work towards those goals. A sales team might track new revenue, total revenue, new customer capture, average deal size, and deal pipeline size to assess progress toward corporate revenue targets. A customer support team might measure the average on-hold time for customers, as well as the percentage of calls that result in a high post call survey rating and overall . A marketing group will look at the contribution of marketing generated sales leads to total revenue over time to gauge their effectiveness. Other areas of the business will look at the efficiency of processes and various quality metrics. Human resources will look at employee engagement, employee turnover, time-to-fill open positions and other related metrics. Managers and key stakeholders will monitor these indicators over time and adjust plans and programs as needed to improve the KPIs in support of the firm's strategic goals. Leading and Lagging Performance Indicators There's both art and science to the development of proper performance indicators. The objective is always to identify those measures that meaningfully communicate accomplishment of or progress toward key goals. Some indicators are lagging indicators and simply tell you how you've performed. Financial metrics are classic examples of these types of measures. They simply indicate results of past programs and campaigns. They have no value in predicting future performance. For Other measures are leading indicators offering guidance on future results. example, an improvement in employee engagement is likely to forecast improvement in many key indicators, including customer satisfaction, innovation and overall participation in running the business. The goal is to have the right balance of both leading and lagging KPIs.
The Basics of Key Performance Indicators (KPI) https://www.thebalance.com/key-performance-indicators-2275156 By Updated March 31, 2017 , also known as KPI or , help managers and employees gauge the effectiveness of various functions and processes important to achieving organizational goals. Some Examples of KPI KPIs are intrinsically linked to a firm's strategic goals and are used to help managers assess whether they're on target as they work towards those goals. A sales team might track new revenue, total revenue, new customer capture, average deal size, and deal pipeline size to assess progress toward corporate revenue targets. A customer support team might measure the average on-hold time for customers, as well as the percentage of calls that result in a high post call survey rating and overall . A marketing group will look at the contribution of marketing generated sales leads to total revenue over time to gauge their effectiveness. Other areas of the business will look at the efficiency of processes and various quality metrics. Human resources will look at employee engagement, employee turnover, time-to-fill open positions and other related metrics. Managers and key stakeholders will monitor these indicators over time and adjust plans and programs as needed to improve the KPIs in support of the firm's strategic goals. Leading and Lagging Performance Indicators There's both art and science to the development of proper performance indicators. The objective is always to identify those measures that meaningfully communicate accomplishment of or progress toward key goals. Some indicators are lagging indicators and simply tell you how you've performed. Financial metrics are classic examples of these types of measures. They simply indicate results of past programs and campaigns. They have no value in predicting future performance. Other measures are leading indicators offering guidance on future results. For example, an improvement in employee engagement is likely to forecast improvement in many key indicators, including customer satisfaction, innovation and overall participation in running the business. The goal is to have the right balance of both leading and lagging KPIs.