KPI - WORK PERFORMANCE MEASUREMENT INDICATOR
KPI - Key Performance Indicator - in English, is a work performance evaluation indicator, a tool to measure and evaluate work efficiency is shown through data, rate, quantitative indicators, to reflect efficiency. activities of corporate entities or functions of companies or individual businesses. Each department in the company will have different KPIs to evaluate the performance of each department objectively.
KPI is a modern tool that helps managers implement leadership strategies into specific management goals and action plans for each department, each field (about human resources: recruiting, about training, productivity of human resources, labor safety, working hours, salary, job evaluation, improvement activities, loyalty ...; finance, production quality, in terms of advertising…) and individually.
Therefore, KPI applies for many purposes: managing the work system of an organization, self-management of the work of the group, of the individual. In other words, KPI is the work goal that organizations, departments, groups or individuals need to achieve to meet general requirements. Usually each title will have a job description or a monthly work plan. The manager will apply the indexes to evaluate the performance of the job of that position, title. Based on the completion of the KPI, the organization (company, agency, department) will have bonus and penalty regimes for each individual. KPI shows the business performance of an enterprise or organization as well as to evaluate whether the person who performs that job has achieved the goal or not.
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KPI is the basis for managers to evaluate the performance of departments, employees and give appropriate incentives for each department, each employee.
The purpose of using KPI in job performance evaluation is to ensure that employees properly perform the responsibilities in the job description sheet for each specific position. This contributes to performance evaluation becoming more transparent, clear, specific, fair and efficient, improving the performance of performance assessment because KPIs are highly quantitative, possibly specific measurement.Depending on the business or organization, the KPI will be different and even each department will have a different KPI (Sales, Marketing, Product) and even each person in a department has a different KPI (SEO KPIs, Email KPIs, Social KPIs).
There are many different KPIs, but we classify them into two categories:
1. KPIs are associated with strategic goals:
Strategic goals are usually money, profit, market share ==> that directly affects the survival of the company.For example, the strategic KPI is 10 billion monthly sales and 120 billion VND per year, if you fail to meet that target, it is likely that the company will be affected, investors withdraw capital, and the Sales and Marketing directors will be charged. quit.
2. KPIs are associated with tactical goals:
Tactics are small activities to help the company come closer to achieving its strategic goals.For example: Social KPI is to achieve 100,000 engagements each month, however, this number of engagements is not guaranteed to help the company achieve sales. But these KPIs are a measure of the development and effectiveness of the tactics being implemented and at the same time, these KPIs must be directly linked to the impact of the achievement of the strategic goal. comb out. For example, more engagements ==> more comments, more inbox ==> more people learn about the service ==> more likely to sell ==> increase sales.
So managers, managers are the ones who will be forced to strategic KPIs and they have to create tactical KPIs to serve the achievement of the strategic KPI goals that you are currently under. These strategic KPIs will be applied to subordinates who are doing the respective jobs.
So when seeing the status of tactical KPIs being achieved, but strategic KPIs are not, it can come from a number of reasons:
Current tactical KPIs are set up that do not contribute to the attainment of strategic KPIs. For example, set the KPI as the bounce rate of the website, while this index does not say anything and it cannot be linked to the strategic KPI.
If the strategic KPI is set incorrectly, sometimes it not only does not contribute anything to the achievement of the strategic KPI, but also causes difficulties to hinder. For example, setting a KPI as a too high number of page likes will cause social executives to take measures to achieve that goal such as clickbait, like sentences with inappropriate content to increase the number of likes for the target. But people like fanpage are people who are not interested in other content of the page and thus invisible, reducing the number of interactions and affecting overall social activities in the future.
The strategic KPI set that reaches all (but also goes beyond the limit) is not necessarily good, but it may be that you set your goals too easily and evaluate them incorrectly and therefore not enough. to help achieve strategic KPIs.
If the strategic KPIs you set out are not achieved and are too far behind, you may be facing the following problems:
The strategic KPI set is too ambitious and far from reality, so it cannot be achieved. KPI is not only intended to measure effectiveness, it can also act as an agent that can positively or negatively impact the psychology of your employees. Wouldn't you like them to feel around the month of not meeting their targets and underperforming?
Your staff is weak, unable to achieve the strategic KPI you set. Now you need to review the team structure, the work they are doing as well as the recruiting process from the input.So the most important thing is that KPI tactics are put in place for the executor to really match and stick to the strategic KPI. These KPIs, when completed and achieved, must have a positive impact and help businesses and organizations come closer to their business goals.