A Simple Guide to Implementing Key Performance Indicators (KPIs)
As Maguire Training's invaluable course KPIs and Individual & Team Performance Assessment demonstrates, the ability to implement relevant KPIs and use them for measuring business performance is an important and useful skill for leaders and managers to possess. For many - and for new managers in particular, the topic of KPIs and their effective implementation and measurement may seem difficult to get to grips with. Whilst formal training offers the best way to demystify KPIs and their usage, here's Maguire Training's simple 5-step guide to implementing KPIs.
Step 1 - Identify the area of business performance you wish to measure
KPI's typically align with business goals and may be used to measure aspects such as financial performance, business growth, health and safety management, customer satisfaction and employee retention.
Step 2 - Establish the target against which performance will be measured
Unless you have a defined goal you have nothing against which to measure positive or negative performance. The target should be specific e.g. rather than identifying that 'the business needs to increase its customer base', a specific goal might be that 'the business needs to have gained ten thousand new customers in the next eighteen months'.
Step 3 - Compare current performance with the defined target
Taking a snapshot of current performance provides a starting point for measurement and enables the overall target to be broken down into smaller goals i.e. 'in order to for overall goal X to be achieved, performance needs to improve by Y each month'.
Step 4 - Review performance changes to date
Reviewing how performance in the area being measure by the KPI has changed in the periods leading up to implementation can help to identify more realistic goals and suggest whether performance improves or declines at particular times of the year or after specific events, helping you to manage these aspects in accordance with your objectives.
Step 5 - Establish an appropriate interval between each KPI review
Depending upon the area of business performance being measured, the frequency with which KPIs need to be reviewed may differ. Accurate measurement of performance can only be obtained if a schedule of periodic review is defined and strictly adhered to.
In practice, there are very few aspects of an organisation's performance that cannot be measured via the effective implementation of relevant KPIs. For managers and leaders wishing to use KPIs to measure the performance of individual employees and their teams, Maguire Training's dedicated course provides a thorough grounding in all aspects of KPI usage. As an alternative to a traditional on-site training course, KPIs and Individual & Team Performance Assessment is also offered via Maguire Training's E-Learning platform; a convenient on-line training system which allows delegates to study using internet-connected devices whenever and wherever they wish.