It’s a new year! Should you be setting key performance indicators (KPIs) for your employees?
Frankly, it’s almost always a good idea for the following reasons.
It gives you performance measurements.
KPIs are highly useful to managers and human resources departments because they provide metrics on which to measure your employees.
Suppose you want to measure productivity per employee, for instance. You need to determine the basis on which you’ll measure productivity,. Will it be specific units of output, for example, each day? Or the number of finished projects per month?
Once you establish it, you have a metric by which you can tell whether Employee A is tracking well with the average productivity of her department, is exceeding it or needs some work to reach average productivity.
Similarly, suppose you want to measure absenteeism in every department. By assigning an absenteeism KPI, you can see which departments have average absenteeism, which departments have less than average, and which departments have more.
Without KPIs, you need to rely on much softer, and possibly much more subjective, ways to measure performance. Managers may not have a specific metric for productivity or absenteeism without KPIs.
It helps you manage appropriately.
Once you know how employees are doing on KPIs, you can manage appropriately.
Suppose you have employees who are underperforming on productivity measures, or on absenteeism. With the use of KPIs, you can develop an improvement plan. You can train or incentivize the employee to bring performance up.
Conversely, if some employees are outperforming everyone else, you will know it. You can develop a plan to promote or otherwise reward those people with substantive, measurable reasons why they are being rewarded.
It can better align goals throughout the company.
Companies perform at peak when the goals of top management are aligned throughout the company. Managers should not be focusing on building teamwork as their chief objective, for example, if the company’s primary goal is increasing productivity.
KPIs can serve to align goals better throughout the company. Measurement of KPIs can be the means by which each supervisor, team, and employee is linked to the overall company’s goals.
The process of determining which KPIs will be most effective can also be an occasion to make sure your own goals are aligned with those of the company.
Let a Consulting Firm Help
Determining which KPIs can most help your company, and then developing ways to measure them can be complicated. Let a consulting firm like Barracuda Consulting help you analyze which KPIs can maximize performance throughout your firm.