Five tips for defining effective KPIs

Define Effective KPIs

In Corporate Performance Management Key Performance Indicators (KPIs) provide the information to determine whether or not a strategic goal or initiative is being attained. However, a poorly defined KPI will not do the job. By applying the tips outlined below, you will increase your chances of defining effective KPIs. The end result? You have reliable information to make the appropriate tactical or strategic decision to positively impact your business or corporate initiatives.

[big_title2]Here are the tips for defining effective KPIs:[/big_title2]
  1. KPIs should reflect your Plan. Create KPIs that can be associated with a strategic goal or initiative.
  2. Make the KPI easy to understand. This will facilitate the Performance Review Meetings by focusing on results instead of the meaning of the Key Performance Indicators
  3. Provide context. Use thresholds or targets or benchmarks. Having some standard of success for comparison is mandatory if you want to evaluate performance.
  4. Make sure the KPI can be measured. We are not only talking about having data available, but it needs to be validated and available on a regular basis to be effective, offer accuracy and make timely decisions
  5. Provide trending information about performance. Don’t focus only on your trend of actual, make sure you include the targets as part of your trend calculations. This will allow you to see if a KPI needs attention, even when they are still performing well.




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