Key Performance Indicators = KPIs = Key Performance Indicators (KPIs) - This is a system for measuring set goals, which is based on the usual mathematics of calculating the “Plan / Fact” of achieving the goal in percent. In a specific situation, key performance indicators (KPIs) define milestones in the process of achieving multi-stage objectives.
Key Performance Indicators (KPIs) can be translated into Russian in different sources in different ways, for example: “key performance indicators”, “key performance indicators”, “key performance indicators”.
It is common to say that an indicator is a KPI if it measures the achievement of a goal. The technology of setting, controlling and revising the goals of the work of employees and departments as a whole is a task modern system management. One of the popular KPI management concepts is called "Management by Goals".
Automating the calculation of Key Performance Indicators (KPIs) is a challenge for level decisions Business Intelligence (BI)
Management by Objectives = MBO = Goal Management - this is the process of coordinating goals within the organization, in which the company's management and employees, setting goals, as a rule, "from top to bottom", understand the existence of a hierarchy of goals within the company.
Simply put, Management by Objectives (MBO) means that every manager, from top managers to the line level, and every employee in the organization must have clear KPIs that ensure that the KPIs of higher-level managers are met.
In this case KPIs (Key Performance Indicators) are key performance indicators that measure the achievement of goals by employees at all levels in the organization.
Goal Management- this is primarily the task of the company's management, which includes the work of:
- on goal setting
- by KPI definition
- communicating goals and KPIs to employees
- to provide the goals with the necessary resources
- to control the achievement of goals
Ideally, the goal itself, which is measured using KPIs, should meet SMART concepts, i.e. have:
- S - specific/Specific (be specific, have a specific result)
- M - measurable/Measurable (be measurable, have an achievement measurement, i.e. KPI)
- A-achievable/reachability (have the necessary resources to achieve)
- R-relevant/Relevance (be relevant, this task needs to be completed now)
- T - time-bound/ Time bound (have a deadline, certainty in time)
Application in the organization of the approach Management by Objectives (MBO) allows you to systematize the process of setting tasks and evaluating the performance of personnel by setting personal KPI indicators by employees.
In practice, everything Key Performance Indicators (KPIs) employee are reflected in the so-called "MBO Matrix of Indicators", or other common names: "Performance Evaluation Sheet"- (ENT-list) or simply "Employee's personal file".
The results of KPI fulfillment are used in the corporate "Personnel motivation system", for example, in the calculation of the bonus part (bonuses) of employees.
Methodology "Management by Goals" is an effective tool for setting and monitoring the implementation of tasks at the level of tactical management. At the same time, according to the requirements of quality management systems at the enterprise (ISO 9001), tasks at the level of tactical management must be consistent (follow) from the tasks defined at strategic level, where the most effective control tool is Balanced Scorecard (BSC).
Balanced Scorecard = BSC = Balanced Scorecard (BSC) one of the powerful tools strategic management, which allows you to formalize the company's strategic goals and further decompose them to the level of operations and core business processes. The following groups of indicators are usually distinguished as key levels of decomposition:
- Finance (financial indicators)
- Customers and Products (sales figures)
- Business processes (process performance indicators)
- Personnel (indicators of personnel training and development)
Control at all levels Balanced Scorecard (BSC) carried out through the so-called Key Performance Indicator (KPI)— Key performance indicators.
The relationship of all KPIs in groups is shown in "BSC Strategic Map".
It should be noted that in this case KPI are indicators of the achievement of strategic goals, as well as characteristics of the effectiveness of business processes, and not the work of each individual employee.
In the context of employees KPI used in managerial models of tactical management, for example, in the concept "Management by Goals", from which, as a rule, follows "Personnel motivation system" based on the achievement of personal KPIs.
Schematically, all this can be connected like this:
Relationship diagram BSC -> MBO -> KPI -> Business processes*
(Strategy -> Goals -> Plan/Fact -> Actions*)
But this is all theory...
In practice, the calculation of KPI comes down to the following mathematical logic:
Composition of KPI
KPI consists of:
- KPI plan (planned KPI value to be achieved)
- KPI fact (the actual KPI value that was achieved)
Types of KPIs
KPIs are:
- Absolute (numeric)
- Relative (percentages/ratios)
KPI calculation
KPI calculation formula:
- Fact KPI/Plan KPI = KPI Fulfillment (Fact/Plan = if the result is more than the plan - good)
- KPI Plan / Fact KPI = KPI Fulfillment (Plan / Fact = if the result is more than the plan - bad)
Examples of KPIs
I will give a number of examples of key performance indicators in the areas of analytics, which are provided by default in our turnkey business intelligence (BI) solutions .
Absolute KPIs (numeric)
Sales KPIs:
- Sales volume in rubles
- Sales volume in units of measure
- Average sales price
- Mark-up in rubles
- Margin in rubles
- Discount in rubles
- Number of customers in sales
- Number of brands in sales
- Number of items on sale
- Number of factories in sales
- Number of vendors in sales
- Number of sales orders
Purchasing KPIs:
- Volume of purchases in rubles
- Volume of purchases in units of measure
- Average purchase price
- Number of brands in purchases
- Number of items in purchases
- Number of factories in procurement
- Number of suppliers in procurement
- Number of orders in purchases
Inventory KPIs:
KPI for accounts receivable:
- As a rule, absolute KPIs are not used.
Creditor KPI:
- As a rule, absolute KPIs are not used.
Payment KPIs:
- As a rule, absolute KPIs are not used.
Relative KPIs (percentages/ratios)
Sales KPIs:
- Growth in sales in rubles
- Sales growth in units of measure
- Percent markup
- Percentage margin
- Percentage discount
Purchasing KPIs:
- Increase in purchases in rubles
- Increase in purchases in units of measure
Inventory KPIs:
- Remaining shelf life in percent
KPI for accounts receivable:
- Percentage of overdue accounts receivable (PDZ/ODZ,%)
Creditor KPI:
- Percentage of overdue accounts payable (PKZ / OKZ,%)
Payment KPIs:
- Document payment percentage
- Payment distribution percentage
- Margin in percent on payments
- Margin in percentage by documents
This was an example natural key performance indicators, which are located inside analytical modules (OLAP cubes) and have full detailing on all dimensions (reference books) of the OLAP cube analytics.
Also in practice there are artificial KPIs, the calculation of the KPI Plan and the KPI Fact is more complex and often involves only a certain amount of detail, for example, only for employees. Such KPIs, as a rule, are taken out in a separate module, which contains analytics only for KPIs.
In such a case, we have a ready-made level module Business Intelligence (BI), which is called "ANALYTICS KPI". This module allows you to automate the calculation of the Plan / Actual KPI of any complexity.
In the article we will tell you what key performance indicators (KPIs) are, how KPIs are calculated. We give a detailed step-by-step algorithm for implementing KPI. We will tell you how to use this indicator to motivate staff. Bonus - a table with examples of KPI for a personnel officer.
From this article you will learn:
★ Staff motivation
Documents to help you develop KPIs for employees:
KPI (key performance indicators): what is it
KPI or Key Performance Indicators - key performance indicators. The term is sometimes translated as "key performance indicators", but this variant is less common. The Key Performance Indicators system is used by large corporations with a developed network of branches and a large staff.
KPI is an effective tool for an HR manager that will allow you to:
- Assess the performance of staff.
- Monitor how efficiency is maintained throughout the workflow.
- Manage workflow.
- Set specific goals for your staff.
HR Cheat Sheet: 8 Rules to Achieve Any Goal
Types of key performance indicators
What is KPI in simple terms explains Alla Piskunova, HR Director of LGK-Logistics
3 main principles for developing KPIs
Principle #1. KPIs (Key Indicators) should be simple and easily measurable. So you can compare them and avoid errors in the calculations.
HR cheat sheet: how to check if you made a mistake when setting KPIs
Principle number 2. The cost of measurement should be lower than the benefit ofimplementation of KPI. Too complicated and expensive procedure for measuring indicators will negate all the advantages of switching to KPI.
Principle number 3. The measurement results should be used in the work. If you measure indicators only for the report and do not take any further steps, then the measurements are meaningless.
Questionnaire to help you perform KPI analysis
Pros and cons of KPIs
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If you think that there are more advantages for your organization, proceed to the calculation of indicators and the implementation of the system. Keep in mind that this will take time, effort and money. It takes the longest time to calculate key performance indicators in large companies with many employees. In this case, it is more rational to involve third-party experts or create a large working group of employees of the organization.
How to implement a system in a company: 7 steps
Stage 1. Find out what indicators affect profits. Determine who in the company influences these indicators. Establish which of the employees works at half strength and interferes with business processes.
Spot lazy careerists - host a coaching session
Stage 2. Select key indicators, that is, those that have the greatest impact on profit. Designate a person responsible for them. For each department, define 2-3 clear KPIs.
Stage 3. Explain to employees how the achievement of key indicators affects pay. Try to motivate them.
Checklist: how to create a comprehensive motivation system
Download checklist
Stage 4. Monitor whether the employee is meeting targets. If yes, go directly to Stage 6. If not - to Stage 5.
Stage 5. Find out the reasons why the targets are not being met. If the employee is not at fault, change the conditions. If an employee fails, assign duties to someone else. You can improve the performance of newcomers by mentoring.
Checklist: how to evaluate the work of a beginner
Stage 6. Constantly adjust the KPI system - remove obsolete indicators and add new ones.
Stage 7. Adjust the system of motivation. Explain to employees what KPI means, what parameters are set and how they will affect wages.
Recommendations for HR: how to communicate the need for change to employees
Howcalculate employee KPI
There is no single standard formula for calculating. Each company has its own specifics and its own set of performance indicators. There is a general algorithm and a basic formula.
AlgorithmKPI calculation
Step 1. Choose from 3 to 5 performance metrics. For example, metrics for an online store salesperson:
- New customers.
- Buyers who have reordered.
- positive recommendations.
Step 2 Determine the weight of each indicator. The total weight of the indicators is 1, and the most important one has the highest weight.
- New customers - 0.5.
- Buyers who made a second order - 0.25.
- Positive recommendations - 0.25.
Step 3 Collect and analyze data on selected indicators during the month. Use different evaluation methods to see if subordinates are doing well.
Comparison of different assessment methods
Download full table
Step 4 Calculate KPI using the formula:
KPI index \u003d Indicator weight * Actual / Plan
Fact - actual result
Plan - planned result.
Step 5 Calculate salary based on KPI index.
KPI (key performance indicators): examples
In state big store household appliances 12 sales consultants. The HR manager of the store evaluates the performance of the sellers according to the following criteria:
- criterion #1- the ratio of the number of buyers with whom the seller communicated with the number of those who subsequently made a purchase (in percent);
- criterion #2- average check of the buyer;
- criterion #3- the percentage of overfulfillment of the plan.
This minimum set of criteria already allows you to calculate the performance of the seller and evaluate its effectiveness. The HR manager can monitor the implementation of KPIs and maintaining efficiency throughout the day or month. It turns out that the indicators allow you to manage the workflow and set specific tasks for the staff.
Example: how to calculate KPI
- In the store, the manager sets the task - to sell Philipps coffee makers.
- The manager motivates employees to complete the task - to sell these particular coffee makers.
- Another criterion is added to the KPI of employees: the percentage of overfulfillment of the sales plan for Philipps coffee makers. For example, for each Philipps coffee maker sold over plan, the seller receives 3% of its value.
- The staff receives additional financial incentives for coffee makers sold in excess of the plan.
In practice, the average number of indicators is 5-8 KPIs. The examples show that the minimum set of criteria for the calculation was initially laid down. You need to develop more. Keep in mind that introducing more than 10 key indicators is also undesirable - you will get confused in the calculations, make the system voluminous and incomprehensible.
KPIs are key performance indicators for a company or a separate department. In the article, we will consider examples of KPIs for various specialists and analyze how to develop and implement a system.
What is KPI
Ki ai stands for Key Performance Indicators - key performance indicators.
The KPI system is a reward system based on key indicators.
Working on such a system allows employees to better understand what they need to do in order to be effective. Moreover, efficiency refers not only to the amount of work performed by them, but also to the benefits received by the company.
How to develop a KPI system
To create a Ki Pi Eye system in a company, you need to:
- Choose a key performance indicator model.
- Determine KPIs and allocate responsibility.
- Create reporting.
How to choose a key performance indicator model
There are many methods for defining and grouping indicators. In Russia, the classical approach is most often used, as well as the system balanced scorecard(Balanced Scorecard, BSC).
The classical approach is based on the use of predominantly financial indicators, such as; see figure.).
Drawing. EVA based KPI tree
It should be noted that financial indicators alone may not be enough to implement the developed strategy. No less important for business is the development of customer relationships, personnel management, product quality, that is, those aspects of activity that are difficult to value.
Within the framework of the balanced scorecard, four main aspects of the company's work are distinguished, which provide answers to the following questions:
- how the company is evaluated by shareholders (“Finance”);
- how it is evaluated by customers (“Clients”);
- how to improve the quality of activities (“Personnel”);
- what processes can provide a company with an exclusive position in the market (“Business Processes”).
What to choose
Which approach to choose depends on the level of business. For small companies, the classical approach is more suitable, since it does not require significant costs for attracting consultants and implementing information system. In the future, it will be possible to refine the created classical system by including non-financial criteria in it.
Large companies should use a balanced scorecard, as it gives a more complete picture of the company's activities.
How to develop KPIs for finance staff
The editors of the "System Financial Director" prepared motivation schemes, and reports on the performance of KPI for employees financial services. Download and use examples of key accountant and other employees of the accounting department, employees, budgeting department and other departments in your company.
How to choose key indicators
To determine which KPIs to use, you need to:
- Select groups of indicators and distribute the responsibility of managers of different levels of management for each of the groups.
- Make the most detailed list of KPIs used by management.
- Select the criteria that best characterize the achievement of strategic goals.
- To formalize the algorithms for calculating each of the ki pi ai.
Selection of groups of indicators
If a company uses a classic approach to developing a KPI system, then the following groups should be distinguished:
- ;
Responsibility for each of the groups will be distributed among the leaders of all levels of management. For example, the general manager is responsible for the whole, while management should be transferred to the heads of departments.
When using a model that includes both financial and non-financial KPIs, the following groups of key performance indicators can be distinguished:
- financial and economic - for business in general;
- customer satisfaction;
- main and auxiliary business processes (see how to describe them);
- staff efficiency.
After identifying the main groups, it is necessary to determine who will be responsible for their implementation. An example of the distribution of responsibility, see table 1.
Table 1. Groups of indicators and distribution of responsibility
Detailing
The list of ki pi ai for each of the selected groups should be as detailed as possible. Ask the managers who will be responsible for a particular group to make such a list. For example, the CEO should specify what criteria he uses to evaluate "shareholder (owner) satisfaction".
As a result, several hundred criteria can be included in the general list of KPIs. It is obvious that the construction of such a system is unjustified, since it will lead to a significant increase in the workload on personnel associated with the collection and processing of data necessary for the calculation. Therefore, from the general list, you need to select those data that are really necessary for management to manage and will allow you to assess the degree of achievement of your goals, and not just be controlled “for information”.
Choosing a KPI
To select KPIs, form an expert group. As a rule, it includes directors of divisions and heads of departments. Their task is to characterize each of the indicators according to the following criteria:
- whether it reflects the degree of achievement of the company's strategic goals;
- whether it is understandable, first of all, to those managers who will have to make a decision based on it;
- whether it is useful for decision making.
In addition to those listed, other criteria may be applied, for example, the ability to use performance indicators in planning or analysis.
The evaluation procedure can be formalized based on the use of a scoring system. For example, 1 point - the criterion is not met, 2 points - partially meets the specified criterion, 3 points - meets the specified criterion. The indicators that receive the highest number of points during the peer review will be included in the CI system.
As a result, a "short" list of key performance indicators of the company will appear (see table 2).
table 2. Ki pi ai example trading company (fragment)
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KPI group |
Key performance indicators |
Responsibility |
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Satisfaction scores |
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Shareholders |
Return on total assets, profitability equity, return on sales or rate of return, return on cash flow |
CEO |
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Sales market share, number of defects in products, number of customer complaints, turnover of active customer customers, duration of the functional order fulfillment cycle, availability of inventory for customers |
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Staff |
Depending on the specifics, as well as on the information needs of managers, management reporting can be generated in a variety of analytics (brands, product groups, personnel categories, types of assets, distribution channels, etc.). ConclusionIn the process of creating a KPI system, you will have to face various problems: the resistance of employees, the need to adjust accounting policies for the purposes of accounting and management accounting; ensure the collection of the necessary data for the calculation of selected key performance indicators; etc. However, organizations that have implemented KPIs, as a rule, achieve good results, since the company creates a system of performance indicators that is understandable to management, and responsibility for management is delegated to a wide range of managers. After the implementation of the KPI system, it is important to constantly analyze its relevance, since business processes, strategic goals, and the external environment may change in the company, so some indicators may lose their relevance, others may lead to unplanned results. | |
In the article, we will look at examples of KPIs, the features of calculating a key identifier for various specialists, as well as best examples its implementation by domestic enterprises.
You will learn:
- How KPI is calculated for different employees.
- How to develop a KPI statement.
- How to calculate KPI step by step.
- How to calculate marketing KPI.
- What can be the KPI of the chief accountant.
- What KPIs can be applied to senior managers.
- How KPI can be calculated in Excel.
- Which companies have successfully implemented KPIs.
Instructions for calculating KPI for different employees
The methodology for developing a KPI ID includes several sequential steps:
- Preparatory activities: creation of a working group, analysis.
- Formation of assessment methods and methods: development of a model of a system of performance indicators, the sequence of its construction, creation and testing of KPI identifiers, preparation of modernized management methods.
- Implementation: merging the KPI accounting system with the existing one software familiarization of employees with the methodology for calculating performance indicators.
- The stage of using the KPI calculation system: monitoring performance, adjusting indicators.
Two main methods are used to develop KPIs: process and functional. How to calculate the premium for each of them, you will learn from the table published below.
The process method is based on the alignment of identifiers, taking into account the main business processes of the enterprise. The functional method is based on the analysis of the structure of the company and the service goals of its divisions.
An example of KPI for managers that will make them go all out
If a salesperson is reluctant to meet their KPIs, then those performance metrics should be abandoned. The editors of the "Commercial Director" proposes to set KPIs that motivate managers to sell and make a profit.
Table. KPI - calculation examples using process and functional methods
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process |
Functional |
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Sales process. Goals: increase in the number of buyers (KPI - the number of attracted buyers); increase in repeat purchases among existing customers (KPI - the number of repeat purchases). |
Enterprise level - plan, strategic model development. Examples of KPIs:
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Inventory process. Goal: increase in inventory turnover (KPI - increase in inventory turnover of raw materials and finished products compared to the previous period). |
Department level - provisions on the structural unit, regulations. Examples of KPIs:
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Customer Satisfaction Process. Goals: decrease in the number of returns (KPI - the percentage of the decrease in the number of purchase returns); reduction of the time interval for customer service (KPI - time spent on service). |
Professionalism of specialists - job descriptions. Examples of KPIs:
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Personnel process. Purpose: to increase the quality level of recruitment (KPI - percentage of closed vacancies). |
Table. KPI for sales specialist: examples (KPI matrix)
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Index |
Base |
Norm |
Target |
Fact |
Runlevel |
KPI index |
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Sales volume (c.u.) |
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Average income from one buyer (c.u.) |
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Number of marks "I liked the service" (pcs.) |
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Share of overdue receivables (%) |
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Final KPI |
Based on the data presented in the table, we can conclude that the sales specialist exceeded the target by 6.1%, and therefore, he should receive a bonus.
The table below provides an example of a methodology for calculating "Average Revenue Per Customer". In the summary from the previous example, this indicator is also included in the KPI calculation form for the sales specialist.
Table. Average revenue per customer for a sales professional
The calculation of performance indicators for supporting departments is a rather complicated procedure. Consider below examples for some supporting positions.
Table. Examples of KPIs for other positions
How to calculate KPI: step by step instructions
Stage 1. Definition of three employee KPIs:
- the number of users attracted to the Internet portal;
- the number of repeat purchases from existing customers;
- the number of recommendations and positive reviews that were published after the transaction on the site or on the pages social networks companies.
Stage 2. Calculation of the weight of each identifier (the total weight is 1, the calculation of the proportions of indicators is carried out depending on their priority). In this example, we get:
- the number of new buyers - 0.5;
- the number of repeated purchases - 0.25;
- consumer reviews - 0.25.
Stage 3. Analysis of statistics for each key indicator for the past six months and the formation of a plan:
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Baseline (monthly average) |
Planned indicator |
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Increase in new customers |
160 new clients |
20% increase i.e. 192 new customers |
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Percentage of buyers who made a repeat purchase |
30 repeat purchases |
20% increase, i.e. 42 repeat purchases |
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Percentage of buyers who left a positive review or recommendation on the site |
20% increase or 42 positive reviews |
Stage 4. An example of KPI calculation is presented in the table:
Formula for calculating key indicators:
KPI Index = KPI Weight * Fact / Goal
The goal is the KPI value planned by the marketing specialist. Fact is actual data.
In the above example, it can be seen that the employee did not achieve his goals. At the same time, based on the overall KPI value (113.7%), we can talk about a high result achieved.
Stage 5. Payroll.
The salary fund of the marketer in this example is $800. In this amount, $560 is the fixed part and $240 is the variable part. Full salary is paid in case of achievement of a result with an index of 1 or 100%. Since in our example a KPI of 113.7% was scored, which is an overfulfillment of the plan, the marketing specialist will receive a salary with a bonus.
Result:
560 $ + 240 $ + 32,88 $ = 832,88 $.
At the same time, if the KPI value is less than 1 or 99%, then the size of the bonus is reduced.
A table with an example of KPI demonstrates the problematic points in the work of a marketing specialist. Insufficiently high indicators may be the result of an incorrectly chosen strategy to increase customer loyalty to the company. Such data allows you to control the work of a specialist. If the state of affairs does not change in the following periods, then it is necessary to revise the system of requirements for KPI.
By constantly following such a policy, you can get a complete picture of KPI for sales, production process etc. This will allow you to understand the procedure for calculating and implementing key performance indicators.
KPI calculation may vary depending on the planned indicators. It is permissible to supplement the regulation with new identifiers: data on the number of solved / unsolved tasks, a system of penalties for low performance on key points in the plan.
For example, if the plan is fulfilled by less than 70%, the employee may be deprived of bonuses.
Here is an example of calculating the bonus component of the salary for an employee who has fulfilled the sales plan:
KPI calculation for a marketer: an example
Before proceeding with the calculation of a key performance identifier for an Internet marketing specialist, it is necessary to clearly define the scope of his responsibilities, and then set the employee's KPI. The KPI formula can only be used in cases where it is acceptable to express in a numerical display the indicators of results for which the marketer is specifically responsible.
For example, let's imagine 5 KPI indicators of a specialist:
- increase in the target consumer group;
- attracting new customers, increasing the number of customers;
- increasing the level of customer loyalty (taking into account the number of reviews, recommendations, etc.);
- increase in the number of repeat purchases;
- increasing company awareness and increasing customer loyalty.
To achieve targets, the marketer uses material and labor resources companies (interacts with software and design developers, analysts and copywriters). A mandatory procedure in this process is budget control. Accurate cost accounting will help to establish the ratio of the results obtained by the specialist and the material resources used by him.
Actions required to implement a system of key performance indicators:
- determine the main goal of the company and the indicators that need to be obtained for a given period of time;
- assign tasks to marketing specialists;
- divide the marketer's salary into fixed and variable components (for example, 75% is a fixed component, and 25% is a bonus for achieving certain targets in the KPI map);
- identify key performance identifiers to evaluate the work of a specialist;
- form a plan and determine the optimal KPI indicators (we will analyze how to do this using examples in the next part of the article).
If necessary, you can use the functionality of the Excel office program or implement a CMS that will ensure the competent organization of the procedure for setting goals, quick data entry and effective monitoring of KPI implementation.
Practitioner tells
Examples of KPIs that made ordinary staff look for the best way to get the job done
Maria Ponomarenko,
director of the Moscow firm Smart Personal
For some time I worked in a team that managed an enterprise in the field of black metal rolling. The clients of our firm were construction and manufacturing companies who needed timely delivery of goods. To meet the needs of customers, we formed a fleet of vehicles that could transport rolled products up to 12 meters long. If a large number of applications were received and our cars were not enough, we attracted cars from third-party contractors. We had to solve two problems: to provide fast delivery products at a convenient time for the customer and achieve maximum loading of each car.
What was done. To motivate dispatchers, we have developed a system of bonuses depending on two KPIs (for each of the indicated logistics tasks).
- The indicator of the transfer of delivery to other days. If our capabilities did not allow delivery on time, with the consent of the customer, it was postponed to another time approved by the customer. The maximum number of transfers of deliveries per dispatcher should not exceed 3%. With an increase in this indicator, the size of the employee's bonus decreased. And vice versa, if the dispatcher could avoid transfers, the amount of his bonus increased (see data in Table 1).
- Average number of deliveries per vehicle(the total number of deliveries that were made in 1 day divided by the number of cars used). On average, one car made 1.8 trips per day. It was decided to increase this figure to 2 flights. It also provided for an increase and decrease in the indicator (see table 2).
Bonuses were calculated according to the formula: S x K1 x K2, where S is a fixed amount (for example, 10,000 rubles), K1 is the delivery transfer coefficient, K2 is an indicator of the efficiency of using vehicles. Depending on the figures achieved, the dispatcher could earn from 12 to 180% of bonuses, which ranged from 1,200 to 18,000 rubles.
KPI indicators turned out to be mutually exclusive. For example, it was possible to increase the number of deliveries by one car, but as a result it would be inconvenient for the buyer to accept the products. In order to achieve an increase in both indicators, the dispatcher had to take into account a number of factors (customers' requests for delivery time, the region of delivery, the carrying capacity of vehicles, the compatibility of delivery of various types of rolled products on one vehicle).
In parallel with the introduction of the KPI system for dispatchers, it was necessary to provide more efficient work adjacent departments (for example, a warehouse complex).
Result. The KPI system was launched in March, and already in October, the average daily delivery efficiency ID rose from 1.8 to 2.3. Thus, in just 7 months of work with the use of the KPI system, the efficiency indicator of the fleet operation increased by 28%. At the same time, we managed to reduce the allowable number of delivery transfers by 6 (!) times - from 3% to 0.5%.
In the general part of the provision on KPI follows:
- clarify the target orientation of the regulation (an example of the wording: “the KPI regulation determines the procedure for the formation of performance indicators, their monitoring in the course of carrying out activities and control based on the results of reporting periods”);
- identify employees for whom the KPI regulation is mandatory;
- set the goals of the KPI matrix (example: reducing the long-term plans of the enterprise and the annual tasks of its specialists to one denominator);
- provide a list of key terms with their definitions;
- present the principles on which the KPI system is based (example: decomposition, balance, compliance with SMART rules).
In the main part of the provision on KPI, it is also necessary to describe the procedure for the formation and coordination of performance indicators. It is necessary to disclose the criteria that they must meet (example: measurable, achievable, specific, etc.). Our example, available for download below, will help you create such a document for your company.
KPI of individual specialists is better to issue a special document called a scorecard. It is coordinated with the CEO, senior managers of personnel and financial department and signed by a specific employee.
In the regulation on KPI, it is also necessary to determine the validity period of the card (example: calendar year) and attach the agreed form to it.
Table. KPI map for financial service specialists
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№ |
Type of KPI |
KPI performance levels |
KPI weight, % |
KPI performance level |
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Lower level |
Target level |
Top level |
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Speed of turnover of receivables and payables |
Growth in the turnover ratio from 0 to 1% compared to the base year |
Growth in the turnover ratio from 1 to 3% compared to the base year |
Growth of the turnover ratio over 3% compared to the base year |
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Percentage deviation of actual indicators from planned ones that were not warned using the data monitoring system, % |
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Decrease in operating expenses per function by industry relative to the previous year, % |
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The regulation on KPI should contain requirements for the procedure for developing and approving maps of key identifiers. It is necessary to indicate those responsible for the formation of KPI maps, their approval and acceptance. It is necessary to describe the unified requirements for the coefficients and format of such a map. For example, it should include identifiers for calculating the performance of indicators (continuous, discrete, cutoff) and recommendations on the measurement methodology (quantitative and qualitative). In the provision for each KPI identifier, it is important to indicate its target value, weight, type, as well as the upper and lower levels. In addition, you need to take into account that the total weight of all indicators in the KPI map should be 100%.
The cut-off KPI is indicated only as a last resort, as it resets the rest of the data. For example, a cut-off indicator for the chief engineer may indicate any case of an accident at work that occurred in the reporting period.
The KPI regulation should describe the procedure for monitoring the performance of indicators, which will help to quickly identify and eliminate the causes of significant deviations of KPI identifiers from target values.
In the provision on key performance indicators, the frequency of implementation of control measures (for example, once a quarter) and the employees responsible for their implementation should also be noted.
For possible (internal or external) changes in the conditions for the implementation of economic and economic activities, the procedure for adjusting KPI should be described. The reason for their application, for example, may be changes in the employee's duties. Here you also need to write down a list of persons who can initiate the use of adjustments, as well as the parameters by which such adjustments can be carried out (for example, changing the number and composition of identifiers, targets, the level of their achievement, etc.).
The KPI regulation also includes the stages by which the achievement of key indicators will be assessed (for example, self-assessment by the owner of the KPI card, the data of which must be agreed with the management, the personnel department and the financial service).
The provision on key indicators should also describe the methodology for their calculation. The level of the premium specialist and his motivation to achieve the target standards depend on her choice. For example, in a KPI schedule, you can specify that the weighted map execution ID is obtained by multiplying the indicator value by its weight.
KPI of the chief accountant: an example of assessing the workload of the department
The management of the enterprise often considers accounting to be a costly unit. Chief accountants regularly complain about the high workload of the department and ask to increase its staff. How can a manager find out if the accountants are really overwhelmed by the current work or if the problem lies in the low efficiency of the work organization? How to define KPI for accountants?
A qualified chief accountant must have the tools to objectively assess the level of workload of specialists in his department. There may be situations when some employees need to increase the range of responsibilities, while others, on the contrary, need to narrow the scope of tasks. Such measures will help to ensure a more even distribution of the workload on specialists and increase labor productivity. Despite the fact that the accounting department is considered as an auxiliary one, its specialists often contribute not only to the preservation, but also to the increase in the volume of financial resources.
KPI identifiers are used to evaluate the work of one accountant or an entire department. They include a number of indicators:
- timely submission of reports to regulatory authorities and error-free filling of declarations;
- timely payment of company invoices by customers;
- absence of errors in accounting;
- the amount of financial resources saved (for example, on contracts with suppliers or contractors, etc.);
- the total amount of fines paid to the tax authorities (due to the fault of accountants);
- accounting salary costs;
- presence/absence of complaints from external and internal clients of the enterprise about the work of accountants.
If we consider KPI for an accountant, there are various examples, but it must be taken into account that it is this department that is able to influence the efficiency of all the main business processes of an enterprise by increasing profits and optimizing costs.
In economic processes, the key performance indicators of the accounting department are:
- interchangeability of employees;
- the number of accounting specialists;
- the minimum amount of overdue documents in the process of work;
- the number of company employees per accountant.
In addition, one should take into account the level of qualification of accountants and their motivation to work to obtain the desired result. The manager must control the workload of employees, the comfort of working in the field and, if necessary, provide accountants with timely advanced training at specialized courses.
Depending on the tasks set and the deadlines for their implementation, the manager evaluates the work of an employee. Depending on the results obtained, a decision is made to expand / reduce staff.
The most effective tool for determining the optimal number of company employees is rationing. Here is an example of such for the accounting department, where the work includes such components as:
- primary documentation (incoming);
- norms accounting and the Tax Code;
- results of work (reporting).
To calculate the required number of employees of the accounting department, you need to know the approximate amount of primary documentation received for a certain period of time (day, month), and have an understanding of how many employees and in what time will be able to process such a volume of materials.
To, for example, determine the KPI of an accounting officer responsible for payroll, the following criteria are used:
- the number of employees of the enterprise served by him;
- payroll according to the number of employees (pay slips);
- withholding tax and other obligatory payments according to the number of employees;
- the number of intercalculations.
Based on such criteria, the norm for an accounting employee is determined, based on which the number of accountants is calculated, necessary for the enterprise. For example, if you take 1,600 payslips monthly for the KPI norm of a payroll specialist, then an organization with more than 5,000 employees will need 3 payroll accountants.
Each firm has unique KPI identifiers. They are formed on the basis of the goals and objectives of the enterprise.
KPI identifiers are set by management (the chief accountant or director of the company) and may contain more or less indicators than in the examples presented in this review. The main motivation of employees lies in the accurate and objective calculation of bonuses for achieving KPI indicators. Thanks to this, conscientious and responsible employees receive a higher wages. Such incentives motivate employees to increase productivity.
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Key Performance Indicators: Examples for a Senior Manager
In the process of building a KPI system, the heads of structural units of the enterprise must observe the following principles presented in the table.
The main guidelines of the company are always determined based on strategic goal. For example: “What results does management want to achieve in a given time period?”. A key indicator can be considered a leading position in the market or a prospective sale of the company. In the first option, attention is paid to increasing sales volumes and increasing the customer base, in the second - to increasing the capital of the enterprise in order to obtain the highest sale value.
To do this, first determine main goal and justify it in writing. Then they break it down into several small goals, which are specific tasks with which it will be possible to achieve the main idea. Visually, this can be displayed in the form of a “tree of goals” drawn on paper with reference to organizational structure enterprises.
Human psychology is such that many, out of fear of showing their incompetence on some issues, agree to perform the task at random, without even understanding its essence. Based on the results of monitoring the setting of tasks in one well-known holding, it turned out that at a meeting with the top management, many employees agreed with what was said, but, leaving the office, asked their colleagues what the boss had in mind.
Each item of the KPI system should be clearly spelled out. To this end, the company's management (general director, board of directors and board) draw up and approve the regulation on KPI. It would be nice if the document gives examples and calculations with formulas, and ties all the terminology to accounting. If the regulations take into account the accounting rules of the Russian Federation, then in the future you need to rely on them. When using several systems of reporting documentation, it is necessary to indicate by which method each indicator should be calculated.
To better understand the provision on KPI, several general meetings. Each manager must independently calculate their bonuses, referring to the indicators of the previous reporting period. A certain number of working days are allocated to complete the task, after which everyone gathers to identify errors. At such meetings, the need to make adjustments to the KPI regulations is often revealed.
The final approval of the document is carried out with the maximum number of indicators set for all managers. Each manager is able to simultaneously control no more than five to seven indicators.
You should not be guided by the principle of achieving the maximum result, since many top managers, given a task of high complexity, simply stop making great efforts to complete it.
The KPI is calculated once a year. This is the most optimal period for evaluating the achievements of a specialist. What if the lead manager was hired during the current year? As an example, consider the metropolitan group of companies Insol. Here, the bonus part of the salary is calculated as follows:
- the work plan includes data compiled on the basis of an analysis of the previous achievements of the manager in terms of similar indicators with an increase of 20%. This is the planned interest rate set by the head of the company;
- if the lead manager was recently hired, the performance of his predecessors is considered (20% should be added to the average).
The amount of bonuses depends on the level of planned indicators achieved. Consider this situation For example:
- 50% bonus if the actual figure exceeded the planned one;
- 30% if the plan is fulfilled;
- 10% if the result is lower than planned;
- the variable component of the salary is not paid in the event of an unacceptably low result.
When calculating KPI, it is better to take into account general and personal indicators. The first includes the results of the activities of the department, which is managed by the top manager of the company. The overall results motivate employees to teamwork and serve as a manifestation of the specialist's interest in the end. The specifics of the enterprise and the position of the head are the main factors that determine the ratio of general and personal results for the formation of KPI. High official position involves reducing the weight of personal results. For a leading manager, the percentage of personal indicators can range from 10 to 20% (or they may not be taken into account at all). For the head of the company, a personal KPI is the receipt of qualification certificates for a specialist in the financial sector, which is mandatory for some firms, as well as the preparation of a successor.
KPI is expressed in specific numerical values. For example, for a head of personnel, such a criterion as “attracting highly qualified personnel” is unacceptable. In this case, there are no such indicators as terms, composition and number of personnel. In addition, the evaluation category "highly qualified personnel" cannot be used. The CEO of the company and the head of the HR department may not agree on the understanding of such evaluation criteria as “skilled” and “highly qualified specialist”.
It is important to establish how the indicator will be determined. It is not advisable to use expensive data for this, spend a lot of personal time and involve other companies. For example, if the head of the marketing department needs to determine the level of brand recognition, then to evaluate KPI, you will have to use quite expensive methods.
For each indicator, it is necessary to form achievement levels:
- threshold (indicators below which bonuses are not accrued);
- target (according to this indicator, a specially provided remuneration is paid);
- maximum (increased bonuses are paid).
On some general indicators, the influence may be indirect, but in personal indicators, the relationship between work efficiency and the result obtained should be direct. For example, for the director of the financial department, it is impossible to apply KPI “the presence of cash gaps”, if all decisions regarding the timing of payments to counterparties and the provision of commodity loans are made only by the general director.
If the percentage of the bonus is insignificant compared to the employee's total income, then he will not spend his time setting strategic goals, but will instead focus on more important current issues. The share of the bonus for a senior manager must be at least 100% of his fixed rate, and for an ordinary employee - up to 20%.
For an employee of the company, the indicators are considered fair if they differ by no more than 30% from the average figures in this industry. In this case, when developing key performance indicators, the experience of colleagues will be useful.
A very important aspect is the fair procedure for calculating KPI. If a certain amount of profit was set for a top manager in relation to KPI, but according to the results of the reporting period, the indicators barely reach 50%, then according to the KPI provision, the manager is not rewarded. At first glance, everything seems fair, but if we take into account the crisis situation of the past year and the bankruptcy of more than 50% of companies in the industry, where all the rest went to zero, then according to the results it turns out that this company received 50% of the main indicator. In this case, the manager deserves a bonus. It says to avoid similar situation perhaps if you link the main indicators to industry-wide ones.
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Practitioner tells
KPI leader by example
Tatyana Kostenkova,
legal and business development advisor, Finstar Financial Group, Moscow
Case study 1. KPI for a store manager
Let's consider an example from the practice of Trade House "Narodny" (Bishkek, Kyrgyzstan). The following key performance indicators have been developed for store managers of this trading house:
KPI 1. Implementation of the sales plan. It is calculated based on the ratio of the actual volume of sales to the planned one. The store revenue plan for a certain period is approved by the CEO in agreement with the financial and commercial directors. This KPI identifier is evaluated by an analytics specialist (Table 2).
KPI 2. Compliance with reporting and performance discipline. This indicator demonstrates the timeliness of preparing reporting documentation, transferring utility bills for payment, sending documents to the archive, and executing orders CEO implementation of the inventory regulations, as well as the accuracy of following corporate standards and compliance with reporting and performance discipline. Estimates KPI commercial director of the company. For each violation 1 point is counted.
KPI 3. Work of subordinate employees. Evaluation of employees in accordance with the approved parameters is carried out by the curator. Violations are converted into points. For example, parking near a store and its entrance must comply with engineering and sanitary standards. Violation of these requirements is worth two points.
Case study 2. KPI for the head of the Russian branch of a large holding company
Initially, key performance indicators at the enterprise were tied to the analytical indicator EBITDA. When the business moved to new stage, difficulties with observance of corporate standards came to light.
Four tasks were set for the heads of departments:
- cost minimization;
- preservation of indicators achieved in previous periods;
- compliance with the methodology for developing decisions according to the standards of the parent holding company;
- loss reduction.
To stimulate the director to solve the tasks set, 4 key performance indicators were developed. If the plan was fulfilled, the remuneration was 150% of the annual salary.
KPI 1. At least one of the stores opened more than a year ago has been operating at a loss for more than three months. Compliance is assessed by the board of directors based on audit data prepared on the basis of the operating income statement. The weight of the indicator in the bonus is 0.3.
KPI 2. Failure to meet EBITDA. The identifier is evaluated by the board of directors or an audit committee based on income statement data. The weight of key indicator 2 is 0.3.
KPI 3. Violation of internal regulations on the rules for making decisions. The presence/absence of failures is determined by the board of directors. The weight of key indicator 3 is 0.2.
KPI 4. Failure to comply with the decisions of the board of directors. The presence of such facts is determined by the board of directors. The weight of indicator 4 in the bonus is 0.2.
How to calculate KPI in Excel: examples and formulas
Financial bonuses in the KPI motivational system are stimulating. The amount of payments depends on the personal results of the work of a specialist in the reporting period. The amount can be fixed or calculated as a percentage of salary.
Any company determines KPI and the weight of each indicator individually (depending on the objectives of the enterprise). Eg:
- The goal is to fulfill the implementation plan in the amount of 500 thousand rubles. monthly. The key identifier is the sales plan. Measurement system: actual sales amount/planned sales amount.
- The goal is to increase the shipping amount by 20%. KPI - average shipment volume. Measuring system: actual average shipment volume / average shipment plan.
- The goal is to increase the number of customers by 15%. KPI - the number of customers in the company's database. Measuring system: actual number of buyers / planned number of buyers.
The spread of KPI (scales) is determined by the company independently. Eg:
- Implementation of the plan by less than 80% is an unacceptable result.
- Implementation of the plan 100% - coefficient 0.45.
- Implementation of the plan in the range of 100-115% - a coefficient of 0.005 for every 5%.
- No errors - coefficient 0.15.
- There were no comments in the reporting period - coefficient 0.15.
This is just one of the possible examples of defining motivational KPIs.
The main point in determining key indicators is the calculation of the ratio of the actual result to the planned one. Almost always, an employee's salary includes a salary (fixed part) and bonuses (variable part). Motivational KPI affects the calculation of the variable part of the salary.
Let's take the ratio of the fixed / variable parts in wages 50: 50. According to KPI, examples of indicators and the weight of the variable and constant parts are as follows:
We accept the following values of the coefficients (the same for indicator 1 and indicator 2):
KPI table in Excel:
Explanations:
- Salary - (constant component of salary) is calculated based on the number of hours worked. In our example, the constant and variable parts have the same weight.
- The percentage indicator of the implementation of the implementation plan and the work plan is calculated as the ratio of the indicators obtained to the targets.
- To calculate bonus payments, coefficients are used. In our example, the impact of indicator 1 and indicator 2 on the amount of the premium is equivalent. The coefficients are also the same. Therefore, the same formulas are used to calculate measures 1 and 2 (only cell references change).
4. Formula for calculating bonuses: =C3*(F3+G3). We multiply the planned bonus by the sum of indicators 1 and 2 for each employee.
5. Salary: salary + bonuses.
This is a sample summary (Excel KPI example). Each company forms its own table, taking into account the characteristics of its activities and the bonus system used.
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KPI Matrix Example in Excel
In order to evaluate employees on key indicators, it is necessary to form a matrix or agreement on goals. By general form, which is used to calculate KPI in Excel, examples are as follows:
- Key identifiers are the criteria by which the company's employees are evaluated. Different positions use different criteria.
- The weight of the indicator is indicated in numbers from 0 to 1 so that the sum of all indicators is equal to 1. The weight number indicates the priority of this KPI, taking into account the tasks of the enterprise in the reporting period.
- The base value of the KPI indicator is the acceptable minimum. The level, the value of which is less than the “base”, is the absence of a result.
- Norm (planned figure of the indicator) - a mandatory level. If the "norm" is not implemented, it means that the employee is not coping with his job responsibilities.
- Goal (above the norm, which makes it possible to improve results) - the value to which it is necessary to strive.
- Fact - actually achieved performance indicators.
- The key performance indicator index shows the level of the result in relation to the norm.
KPI calculation formula:
KPI index = ((Fact - Base) / (Norm - Base)) * 100%.
An example of filling out a matrix for an office manager:
The performance ratio is calculated by summing the products of indices and weights. Employee performance evaluation is visually demonstrated using conditional formatting.
Where was the successful implementation KPI: company examples
The KPI system is being actively implemented at domestic enterprises.
1. Sberbank: employee motivation through KPI.
An example of an enterprise that has successfully implemented a KPI system is Sberbank. A few years ago, the branches of this bank were filled with long queues and were remembered for not very polite service. After the KPI system was introduced for Sberbank employees in 2010, noticeable changes took place in the work of the enterprise. For ordinary personnel, group indicators were developed, called "5+":
- personal efficiency;
- improving your knowledge;
- customer focus;
- optimization of working time;
- teamwork.
The motivation system developed for Sberbank employees is not limited solely to financial incentives. As non-material motivating factors, such moments as the provision of benefits, free schedule, discounts, tour packages, etc. are used.
2. "Magnat" - a new control system.
The system of key indicators of the company "Magnat" was called KPI-Drive. Its creators set goals to solve the following problems:
- Improve Tier 1 Key Performance Indicators by the second year after implementation.
- Improve the movement of variable costs by increasing the dynamics of the payroll.
- Increase business transparency and manageability.
- Strengthen team interactions.
- Recoup the cost of implementing the system.
The results of the implementation of the KPI methodology can be an example of how quickly the goals were achieved. Of course, as a result, the system of key performance indicators has become an integral part of the company's business processes.
Implementation results:
- The management model has become more technological and understandable.
- The motivational system has become more technologically advanced and flexible.
- Level 1 KPIs of the enterprise are constantly improving.
- GC "Magnat" is an example of successful implementation and use of target management technology.
- Since the introduction of the KPI system, the Magnat group of companies has increased its business volume by more than 5 times.
Examples of how effective the implementation of a KPI system is can be found in many largest companies operating in the domestic market.
The system of key performance indicators has been used for many years for the management of large, small and medium-sized companies around the world. This is a large-scale and multi-level management system that allows you to make an accurate assessment of the efficiency and effectiveness of the enterprise. The implementation of KPI is not an easy task that requires time resources and serious efforts, but the effect of the implementation of the system is worth it.
Most entrepreneurs at some point go through a phase of transition from a do-it-yourself position to a hire people and delegate position.
So it was in my case. I began to notice that good profit in one month, went to zero in another.
So, in order to understand what the problem was, I decided to implement KPI key performance indicators and track the work of each seller in terms of the most important indicators. I will talk about this in the article.
KPI (key performance indicators)- These are business indicators that reflect the completeness of the achievement of certain goals set for a particular employee or department.
Understanding what it is. And the closer the real values of the indicators are to the target ones, the more qualitatively the work of the personnel in production was built and the more profitable it is for the owner of the company.
Embed or run?
Matrix Step 3. Make a staff motivation program
There is only one way to make employees work more actively - by offering them something significant in return.
For example, in addition to bonuses, you can offer employees the title “ the best worker months”, provision of free training, corporate trips top sellers and etc.
Maintain interest in new technology possible through this process.
In the West, the practice is widespread in which all the achievements of workers are reflected in a mobile application-online game.
In this way, the spirit of competition and involvement in improving results is maintained.
You can also use the following methods to stimulate employees who demonstrate high performance indicators:
- Providing an additional social package, insurance and benefits;
- Providing additional discounts for goods and services of the company in which employees work;
- Inviting the best employees to participate in management meetings;
- Providing extraordinary vacations and days off;
- Providing children of the best employees with free vouchers to camps and sanatoriums;
- Organization of foreign business trips and holidays.
All of the above methods not only contribute to the growth of employees' interest in achieving the highest efficiency, but also create a beneficial environment for the growth of employee loyalty to their employer.
Yes, yes, absolutely right Step 4. Explain the innovation to employees
A very important step in the process of implementing a KPI system is communication with subordinates.
Clearly explain to the workers the new system for monitoring their productivity.
Be sure to explain exactly how this or that metric will be calculated and talk about new motivators for their work.
It is necessary to fix the innovation on physical media. For example, you can place a table of planned KPI indicators in the personnel room and enter the actual values of employees for each indicator on a monthly basis.
Another option could be a general chat between the manager and the staff, where he will answer questions that arise from employees.
And also publish weekly reports on the performance of each employee.
Well, well, how to explain Step 5 Implementation
After you have gone through all the above steps, you can begin to reconfigure the approach to control.
Document the newly introduced control metrics for managers (for example, in the format of a provision on key performance indicators), approve planned indicators for personnel.
Ideally, form a focus group of 2-3 employees and monitor the effectiveness of the new tool on it every day for a week.
So you can eliminate typical problems in the first days after the introduction of KPI technology and make an instant readjustment of problem areas, which will save resources in the future.
We implement, we implement! Step 6. Calculation
After the approval of KPIs and their standard values, it is necessary to draw up a time sheet where they will be reflected.
In the same timesheet, it is necessary to enter the values of real indicators for each employee (example in the picture).
We enter real indicators We will conduct calculations in Microsoft Excel - it is more convenient and faster. Set up automatic calculation of employee performance using formulas. In cell D4, we write the formula for calculating KPI fulfillment: \u003d C4 / B4 * 100%.
We write the formula Then you need to drag the cell by the lower right corner to the end of the list of indicators (in our case, to cell D8). Thus, we copied the formula into cells D4:D8.
We draw the formula After that, we modernize the formula in cell D4, bringing it to the form: = C4/B$4$*100%.
Then it is enough just to select cell D4, copy it with the key combination Ctrl + C and paste it into cells F4, H4, J4, etc. the key combination Ctrl + V. In this case, the formula in each cell will have the form we need:
Formula upgrade 
We write the formula Thus, we get a time sheet that automatically calculates the performance of employees when we enter the actual KPI values achieved by each employee.
Step 7. Control
However, even after the successful launch of the KPI system in the organization, you cannot let go of its work from your field of responsibility.
All the main interaction with customers / buyers and the conclusion of transactions takes place by employees through this software. This minimizes the time spent on calculating individual KPIs and ensures visual representation results for each employee.
CRM system By the way. If you decide to use CRM, then I recommend Megaplan, and especially for you I have prepared a promo code “Megastart”. It gives a 10% discount + another 14 days of free trial. Just tell it to a specialist -> megaplan.ru
Implementation errors
Many entrepreneurs do typical mistakes when implementing KPIs in your company.
This entails a variety of Negative consequences, ranging from a decrease in labor productivity and ending with the dismissal of employees at their own request.
In order for you to bypass this rake, we will briefly describe in five points what cannot be done when implementing this technology. So let's go. It is forbidden:
- Reduce wages. Even if you have increased the percentage of payout on sales, you cannot cut the salary of workers. New system balanced performance indicators should provide an opportunity to earn more than now. Otherwise, it demotivates workers.
- Set high scores. No employee wants to aim for unattainable values and their current results may also deteriorate. It is necessary to objectively evaluate the physical and moral capabilities of the worker and set such planned goals, the fulfillment of which is realistic.
- Implement random KPIs. Calculating key performance metrics that are not suitable for your organization will not only complicate the process of monitoring the results of personnel work, but also waste a significant proportion of your resources.
- Entrust the task of calculating KPI to unskilled employees. Incorrect calculations can damage the company and exacerbate the situation in work collective. Therefore, it is much more rational to leave this task to senior managers or analysts.
- Make too complex formulas. It is impossible to introduce formulas that cannot be remembered by the performer. Since in this case, it is easy to make a mistake in the calculations and thereby provoke a conflict situation between the employee and the contractor.
Briefly about the main
Key Performance Indicators KPIs are a proven tool for monitoring business process performance and employee performance.
However, the implementation of this system is a long and painstaking process that requires financial, labor and time costs.
But if it is successfully implemented, KPI technology will provide significant benefits for managing the company, as well as contribute to its growth and satisfy commercial interest.
In addition, you will be able to show additional attention to workers who perform their activities with high quality, and eliminate workers who are ballast.
So don't be afraid to improve your business. Introduce new tools and multiply!
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