Smart KPIs

[edit] Introduction

For a company, growth and improvement could have multiple subtexts - an increase in revenue, improved sales, company growth, etc. All these factors should align positively with the successful development and progression of an enterprise.

Thus, with multiple parameters involved, it can become a tricky prospect for employees to be in cognizance of the business improvement strategy of their company if their tasks and goals are not associated with the same. This is where Key Performance Indicators (KPI) come into place. KPIs are quantifiable measures of performance for a particular objective over a specific time.

[edit] What are smart KPIs?

KPIs can be simple or elaborate, based on an organisation's vision for its progression and the inclusion of people, processes, and programmes as useable metrics. Progressive and forward-thinking organisations set 'SMART’ KPIs to ensure optimum metrics are used in supporting the organisation. SMART KPIs should be Specific, Measurable, Attainable, Relevant and Attainable to be effective for the organisation. The performance measurement with these indicators is periodically assessed, discussed, and modified to guide the organisation towards its goals.

So, how can employees as well as organisations benefit from SMART KPIs? Well, we have mentioned in the title that they improve business performance, but that does not give you the full picture.

[edit] Performance tracking through KPIs

Imagine going on a road trip without any signs on the road - it would be far more difficult if not impossible to complete your journey. KPI's are like the road signs, they indicate and enable you to track your performance to assess whether you are moving in the right direction. So, for example, your goal for the quarter is enhanced customer satisfaction, a KPI in that domain will give you quantifiable measure in terms of customer satisfaction index/score. This way, the employees as well as the organisation can be on the same page with complete visibility. This can translate into better performance management.

[edit] Bridging the learning gap

If a certain KPI output is not met over a period, it can be an indicator that the team requires further skill up gradation. This can then be achieved by providing the right training to the employees. Similarly, employees can identify learning gaps in their profile by assessing the KPI's and approach the learning department to seek appropriate training and skills. In this way, a KPI model can be created wherein a KPI is grouped with related event/ activity and a process flow established to add crucial information pertaining the requirements.

[edit] Better decision making

In this digital era, you can get curated dashboards and KPI scorecards on your screens to help you get all the performance related metrics right in front of you. When the stats are available for everyone to see, people management and self-management gets more effective. Such transparency also enables executives to identify factors that are contributing to the growth of the company and the ones that are not. Such data forms the basis of sound decisions. By generating actionable insights from the KPI's, a plan may be established for each department, every team and all the employees to work collectively towards business improvement.

[edit] Informed employees

The workplace today is dynamic. A bottom-down approach is not only conservative, but it also leaves employees feeling left out. SMART KPI's address this issue by making employees aware of their individual progress and its relation to the overall organisation performance. Thus, with any KPI, an employee is gaining crucial knowledge about company goals. This makes them feel empowered and they can proactively participate in achieving the organisation goals.

[edit] Better team management

Often team leaders and managers struggle to help their team members achieve their goals because they lack any proper measurement of performance. With KPI's, your team’s performance for a particular period (quarter, half year, annual) is right in front of you and you can identify areas for further improvement. Thus, managers can make better calls for their team in terms of individual growth and skill up gradation. By continuously recording KPIs, at the end of the year, managers can get a bird’s eye view of their team’s strengths and weaknesses and they can create the upcoming year’s plan accordingly.

In summary, no matter what the size of your organisation or what goals you are targeting, setting SMART KPIs can put you on the path of performance improvement. Maintaining KPIs may take some practice and consistent discipline, but the payoffs are worth the efforts. Once you start tracking the progress and respond to the areas of improvement in a proactive manner, the SMART KPIs will begin to become a permanent tool for organisational improvement.

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