Measuring an organization’s progress is essential in order for it to succeed. Personnel must be able to achieve the company’s objectives. Management would fail to monitor the progress of their business if they don’t make use of the right tools. So to avoid this, organizations need KPIs for their employees to strictly follow. Here is a brief discussion about Key Performance Indicators and a KPI example that you might find useful.
All about KPI
Key Performance Indicators or KPIs help measure the different areas of business operations. It can evaluate the performance of employees and even the department in general whether or not they are able to achieve their goals. Through KPIs, both financial and non-financial matters can be easily addressed.
KPI’s purpose
Before setting up its KPIs, a company needs to identify first its long-term goals and objectives. Different companies have different goals and directions, thus, they need to have their own KPIs. The purpose of having a KPI dashboard is that this report enables the company to achieve its objectives by providing quantifiable information.
What are the benefits of KPIs?
There are a lot of benefits from KPIs. First, KPIs provide useful information to the company’s management, stakeholders, and workforce. Through workable KPIs, they will get a clear idea as to how they are progressing towards the achievement of their goals. Such information is also essential in their decision-making. Not only that, KPIs can also help strengthen the workforce by promoting motivation and healthy competition among employees.
There are a lot of KPI examples in the internet. In fact, the examples are limitless. As a guide, here are a few samples of Key Performance Indicators:
Accounting Department:
1. Percentage of aging of uncollected bills
2. Payroll expense per employee
Health & Safety
1. Number of fatalities per e.g. 100,000 hours worked
2. Health and safety prevention costs within the month
Human Resource Department:
1. Average time personnel are in the same job or function
2. Recruiting fee as percentage of annual salary