KPI stands for Key Performance Indicator. KPIs give you insight into how far along you are toward reaching a goal. In other words, they make progress measurable. In this article, we tell you exactly what to consider when setting KPIs.
Setting KPIs: organization, team or person
KPIs are set to evaluate strategic goals. They make a goal tangible. When you want to set KPIs, it's important to think about who you're setting them for. This can be the whole organization, but it can also be per team or department. So write down which KPI applies to whom.
Make KPIs measurable: SMART!
A KPI should always be written so that it is concrete (measurable). To do that, it must meet a number of conditions. We call this the SMART method. Each letter stands for a factor the KPI must meet.
Specific: the KPI is written so clearly that it can only be understood in one way. This prevents misunderstandings.
Measurable: the KPI must be written so it can be expressed in numbers, so the result can be demonstrated.
Acceptable: the KPI must be in line with the overall business goal. Everyone involved must be able to accept it.
Realistic: the KPI must be written so it can actually be achieved. It must be manageable for everyone involved.
Time-bound: the KPI must have a specific time period, with a clear start and end point.
Examples of KPIs
KPIs naturally differ by organization. We often see a few basic formulations, such as increasing revenue by 2% within 6 months. Or increasing the number of website visitors by 5% within 1 month. Reducing response time to customers by 0.5 working days within 1 month. And so on. You can adjust the time frame and the percentages or numbers yourself. Just don't forget to stay realistic.
KPIs are also useful when setting up a strategic HR policy. We wrote a specific article about that. Read about KPIs for strategic HR policy.
Setting, achieving and measuring KPIs: a Workforce Management System!
Setting good KPIs is one task, but actually achieving and measuring those goals is another story. That's why it's important to use good software. A Workforce Management System is an excellent solution for this.
It gives you insight into past data, so you can make predictions based on it (forecasting), which helps you set realistic KPIs. The software also helps you hit your targets, because those predictions help you make sure you have the right stock and staffing levels. You also get more insight into your budget. Finally, you use the software to actually take the measurements. That makes it easy to adjust based on previous periods (monitoring).
Want to know more about the benefits of Workforce Management for your organization, or request a free demo?
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