The high efficiency of the enterprise is often due to an established and well-functioning system for monitoring the results obtained. That is why, when solving the problem of assessing the performance of their employees, more and more companies are introducing into their management system KPIs, which are traditionally translated as "Key Performance Indicators" - indicators of achievement of results expected from an employee or a division of an organization.
Instructions
Step 1
The development of KPIs helps to structure the goals and tasks performed by each department and employee, to understand how each link contributes to the achieved result, in other words, how effectively the organization works. Therefore, the development of key performance indicators should begin with the definition of strategic goals, taking into account which goals are set for each employee (department).
Step 2
When developing strategic and personal goals, keep in mind the essential criteria first proposed by Peter Drucker in The Practice of Management (1954):
- specificity (clear wording, excluding ambiguous interpretation);
- measurability (the ability to measure the result using certain parameters, preferably quantitative);
- achievable (avoid setting unrealistic goals);
- result orientation (the result is important, not the process);
- limited time (the goal is achieved in a certain specific period of time).
Step 3
Match your goals with your KPIs. Each indicator should serve the main strategic objective, bring it closer to its implementation, or better - be part of the global goal. When forming KPIs, keep the criteria simple, clear and transparent. The indicators should not give rise to ambiguous interpretations.
Step 4
Monitor KPI performance. Reward employees for successful performance. Remember that employees must clearly know their KPIs - the criteria by which they are assessed. Only in this case will key indicators motivate you to work effectively.
Step 5
Implementing performance indicators can be a stumbling block between management and subordinates. Here it is important to convey the understanding that all employees whose activities are aimed at achieving high results benefit from the introduction of KPIs. On the other hand, the KPI system will help to identify ineffective personnel as well.
