What Is A Kpi?

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What is a KPI? Businesses employ a wide array of standards and measures to gauge how well their business is meeting particular goals. One of these measures of performance is called a Key Performance Indicator or KPI. Depending on the business’s priorities, KPIs can vary significantly from business to business and are a reflection of what that business values most, whether it be handling customers, producing goods, keeping employees motivate or what have you. KPIs are a set of performance metrics used in every aspect of business, from measuring a firm’s financial performance to measuring its environmental impact. Different metrics are measured by different departments, providing for an elaborate overall assessment when each department’s…show more content…
If something that cannot be quantified needs to be tracked, a KPI can still serve as a rough guide on the matter, giving it significant flexibility. This flexibility, combined with its built-in accountability, makes the concept a key part of the Kaizen business model popular in Japan. A KPI is always an objective that is clear, specific and simple for everyone to comprehend, such as “reduce manufacturing waste by 5% by July 15th.” It would be foolish to run a business, no matter the size, without keeping track of how well that business is performing. A KPI system is a simple, effective and multifaceted method to keep track of the most critical aspects of your business. When the employees know what KPIs the company is currently aiming for, this also helps to organize their priorities and slightly alters how they approach their work. Employees tend to respond well to direction, making KPIs a useful tool for directing employee behavior. Drawing on our earlier example, if a school did not know how many of its students graduated, they would not know if their curriculum was effective or if their teachers’ methods were meaningful or not. What sort of school would that be if they had no idea if their students were learning anything or not? Types of KPIs KPIs can fall within any sphere of a business and sets of metrics are often measured by a particular team, group of teams or department. Each KPI is designed to help those in
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