If it feels like your business has no direction, then using KPIs to manage employees will change your business. Key Performance Indicators will help you determine where you are going, and how everyone is going to get there. Below are some ways that they help you achieve change.
It gives you performance measurements.
Key Performance Indicators (KPIs) are highly useful to managers and human resources departments because they provide metrics on which to measure your employee’s performance.
Suppose you want to measure productivity per employee. You need to determine the basis on which you’ll measure productivity. Will it be specific units of output 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 their department, is exceeding it, or needs some work to reach average productivity. Without KPIs, you need to rely on much more subjective ways of measuring performance. Managers without specific metrics to evaluate employees by are much less effective in their role than those who use KPIs.
It can better align goals throughout the company.
Companies reach peak performance when the goal of each employee is aligned directly with the goals of the organization. Using KPIs is a critical piece to making that happen.
The first step is setting key performance indicators for your company. This will be the North Star for every person in your organization. Then, you evaluate what needs to be done to make those goals happen. When you find the answer, these become the indicators of your management team. The last step is breaking those goals down to the employee level using the same process.
By setting KPIs for your business from the top-down, every level of the company can work in sync. Everyone is clear on the mission, and how they fit into the vision.
It helps you manage appropriately.
After setting clear objectives for each person using the KPI format, you can develop a game plan to reach each goal and track their progress.
By having KPIs in place, you can track the precise efficiency of each employee. This will quickly reveal who needs more training and who is a rockstar that you can rely on. Once you know who is falling behind, you can dig into how to better train and motivate them. (Learn what motivates each of your employees HERE)
It also makes hard decisions easier. Not sure who is the best fit for a promotion? You can look at precise data that will tell you who your top performers are. The same goes for terminations. If it is time to let an employee go, you have data that shows they have not been performing on the job. This can take a little bit of the awkwardness out of an already tough conversation.
Let Us Help
Determining which KPIs can most help your company, and then developing ways to measure them can be complicated. Let Barracuda Consulting help you analyze which KPIs can maximize performance. Getting started is free. Click here to schedule our free assessment and see firsthand how using KPIs to manage employees will change your business!