Why set KPIs?

KPIs (Key Performance Indicators) are important as they help organisations measure their progress towards achieving their goals and objectives. They provide a quantitative way to track performance, allowing businesses to monitor how well they are doing in areas such as sales, customer satisfaction, productivity, and profitability. By regularly reviewing KPIs, organisations can identify areas that need improvement and make informed decisions about how to allocate resources and where to prioritise.

Setting the right KPIs requires careful consideration of an organisation's goals and objectives. Here are some steps that can help in setting the right KPIs:

  • Identify your objectives: Determine what you want to achieve as an organisation. This could be increasing revenue, improving customer satisfaction, reducing costs, or increasing productivity.
  • Define your measures: Decide what measures will help you track progress towards your objectives. These measures could include customer satisfaction ratings, sales revenue, customer retention rates, or employee productivity.
  • Choose the right KPIs: Select KPIs that are relevant to your objectives and measures. Make sure they are specific, measurable, attainable, relevant, and time-bound, exciting and recorded (SMARTER). For example, if your objective is to increase sales revenue, a relevant KPI could be monthly sales growth.
  • Set targets: Determine what level of performance you want to achieve for each KPI. This could be a specific number or percentage increase.
  • Review and revise: Regularly review your KPIs and adjust them if necessary. This can help ensure they remain relevant to your objectives and that you are tracking the right metrics.
  • Communicate and engage: Ensure that your team understands the KPIs and how they are relevant to their work. Encourage engagement and ownership of the KPIs among team members.
KPIs can also be used to motivate, and track employees performance, and align their efforts with the organisation's objectives. However, it's important to note that KPIs should be carefully chosen to ensure that they measure the right things and don't encourage undesirable behaviours, such as focusing too narrowly on one area at the expense of others or engaging in unethical behaviour to achieve results. See one of our other blogs, on how KPIs can drive behaviours

By following these steps, organisations can set KPIs that are relevant, measurable, and aligned with their objectives, which can help drive performance and achieve desired outcomes.

If you want to ensure you are setting the right KPIs, get in touch at
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