Have you been setting goals for your business or team and you have been struggling to assess if you are on the right path to achieving these goals? KPIs (Key performance indicators) are made for situations such as this. Key performance indicators allow you to track the progress of your organization in reaching the set goal.
KPIs often look vague and confusing, especially if you don’t know what they’re all about. In this post, we’ll take a closer look at what KPIs are and how they can be used to improve your workplace performance.
What Are Work KPIs?
Performance indicators, or KPIs, are a key part of any organization’s performance management system. Key performance indicators are a necessary part of any job. They are a set of metrics used to measure and track an employee’s performance, they help businesses track progress and identify areas in need of improvement.
How Do KPIs Work?
Key performance indicators are a way for employers to track employee productivity and goal-setting. A key performance indicator helps you to know if your employee is maximizing your strategies to achieve the set goal. It also tracks their progress. But how do they work?
For a KPI to work, it needs to have the following features:
- It must be measurable and well-structured
- Your organization must be aware of the KPI
- It must be relevant to your organization’s goals
- It must be important to achieve your organization’s goals
- An excellent KPI must be SMART; Specific, Measurable, Achievable, Realistic, and Timely.
What Are the Benefits of Work KPIs?
Why is it important to track your progress when it’s something you can see physically daily? However, KPIs will not tell you the outcome of a goal; they’ll rather show you how you achieved the goal. For example, if you’re making sales or not, KPIs would show why it is so. However, KPIs do more than this. Below are a few benefits of using KPIs in your workforce:
KPIs identify strengths and weaknesses
KPIs are very effective in identifying the strength and weaknesses of your employees. An employee might be struggling with selling a particular product and customer turnover, know the area in which this employee performs better and areas of lesser output would help to know what can be done to assist the employee or if the task should be given to another employee who performs better in that area. KPIs are used to identify processes that would yield high success results thereby pointing out processes that might drawback a project or result in failure.
KPIs Measures Results
KPIs make it easy for you to measure results. A good KPI is one that can be tracked. You cannot make improvements if you are unable to track you’re your progress toward your set goals.
If you got a 50% increase in your sales turnover for the quarter of the year, how can do determine how this was achieved?
- Did the sales team go through intensive sales training?
- Did you set an easy goal?
- Did one extraordinary salesperson accomplish most of the goal?
If however, you failed to reach your goal, how do you determine why this happened?
- Did you set an unrealistic goal?
- Were your employees empowered enough?
- Was your goal SMART?
It is important to know why and how you achieved a goal or not. KPI has the power to track and measure these processes.
It boosts the number of customers
After identifying the areas of strengths and weaknesses, the organization would be able to focus on areas of strengths and also improve on the areas of weaknesses. This in turn provides solid data on the success rate of the organization and when this data is given to prospective clients, it would back up the organization as confident and expert professionals. This would make prospective clients trust the organization and see them as a serious set of individuals.
It Improves Resources
Using KPIs to identify areas of high performance and low performance due to a small workforce or office equipment can help to propose an increased budget. Company managers can use the KPIs from different teams in their company to apply for funding from investors. Explaining the resources they are lacking and how a new set of resources can help expand their company would help investors to be able to track how their money would be spent on the project.
How Can Work KPIs Help to Improve the Workforce?
- Bridges learning gaps: KPIs help to point out learning gaps. Your inability to meet a goal might be because your employees are not trained for that goal. When you know there is a learning gap, you start to train employees. The KPI in turn evaluates and measures employee performance and improvements after the training, this would enable know if the employees need more training or not.
- Strengthens Employees to be Proactive: After you have identified the learning gaps, you can come up with a sales KPI that says “call 20 prospects every day.” This KPI has the number of calls to be made and when to make them which are both timely and specific.
Visible results from this process show that you are doing it right. But if there are no tangible results, you will have to go back to the goals, realign your KPI to suit the goal, and make other necessary adjustments.
What Are Some Examples of Work KPIs?
There are different types of KPIs to use in the workplace. Moreover, you have to use KPIs that align with your goals. How to determine this is by conducting research and knowing the KPIs that are most important.
Below are a few KPI examples that can help streamline your research:
Employee KPI: employee metrics are essential for tracking the performance of your employees. It evaluates employee engagement, productivity, and results.
Sales KPI: this KPI tracks the number of sales processes you have, the number of converted sales lead, the minimum conversion time for leads, and sales growth.
Customer KPI: this deals with the number of old and new customers, number of prospects, market share percentage, and market niche.
Operational KPI: this includes employee satisfaction, employee training and development, employee turnover rate, and churn rate.
KPIs are excellent tools that help to Improve Productivity in the Workplace. Achieving business goals is easier if you form a strong KPI that can lead your team towards the goal!