A Key Performance Indicator (KPI) is a quantifiable measurement that shows how well an organization, team, or individual is performing against a predetermined goal or objective. … Avoid having too many KPIs, and ensure that they are Specific, Measurable, Achievable, Relevant, and Time-Bound (SMART).
Managing Your KPIs
When you’re deciding which KPIs to set up, plan how you’ll capture the information you need. Net profit requires a different set of data than customer satisfaction, for example, and requires access to different systems.
Also, establish who will collect the data, and how frequently. Sales data can usually be collected daily, for example, whereas KPIs that require data to be collated from a number of sources might be better measured weekly or monthly.
You’ll need to verify the data, too, to make sure it’s accurate, and that it covers all the requirements of your KPI.
Communicate KPIs clearly to everyone concerned. If you’re responsible for a team or organizational KPI, make sure that your reports know how each KPI impacts their work, and that they know which activities to focus on. You may be able to set up a performance dashboard, or use a balanced scorecard to measure progress efficiently.