Key Performance Indicators (KPIs)
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Transcript of Key Performance Indicators (KPIs)
Key Performance Indicators (KPIs)
www.optimumfx.com
Intent of session
• Key Performance Indicators measure the organisational performances that are most critical for the current and future success of an organisation
• The session will provide an outline of the types of KPI’s available and the pros and cons of each
• KPIs are a key tool for a leader to help make decisions and guide their teams back on track
Defining KPIs
• KPIs measure the performance of an going process to achieve a goal or target.
• The KPI must be an indicator to measure the current and future success of the organisation.
• A KPI must be understood by all staff and everyone must know what corrective action to take. This corrective action must impact the KPI.
• KPIs must be defined using SMART objectives.
Types of KPIsA company usually has a mixture of the following types of KPIs:
• Lag Indicators (Outcome measures) tell how well a system performed
– This does very little to define appropriate corrective action required as the measure could be old
• Period financial performance – lag to – financial control (and others)• Short term absenteeism – lag to – employee motivation
• Lead Indicators (Performance drivers) help predict performance– Difficult to define, measure and get accurate.
• Employee motivation – lead to – Customer satisfaction• Management review compliance and effectiveness – lead to – performance improvement
• Current Indicators measures performance as it occurs– Care should be taken to understand that instant results does not lead to instant
reactions causing adverse conditions.
Application of KPIs
• A good scorecard often has a combination of current, lead and lag KPI’s
• The overall purpose for selecting metrics is to enable you to track performance towards your goals – selecting the most appropriate ones is key
• Remember the old saying: – ‘Show me how you’ll measure me, I’ll tell you how I’ll perform’