Importance of the key performance indicators

 

Figure 1- Key Performance Indicators and why they're good for any business - EFM

Key performance indicators commonly known as KPI are a important feature of the profit making institutes hence its gives better insight of the company achievements against the forecasted budget. In order to get confirmations regarding the fulfilling of their objectives and goals organizations have to keep check over their performance (Ghalayini and Noble 1997). Also, KPI parameters are not the same for each and every institute it depends on the operation process of the company and according to that we have to choose the appropriate KPIs with regard to our organisation in order to foster in the market.

 

Rolstadås (1998) has identified that performance measurement of an organization is a complex interrelation criterion between the effectiveness, efficiency, quality, productivity, quality of work life, innovation, and profitability. Since the KPI mainly based on the data accuracy of such data is paramount. Also, there are several characteristics of KPIs which we could list as follows,

 

Timely

 

KPIs should available on a timely manner in order to take remedial /proactive action towards the business operation. As an example, weekly or monthly it should be published.

 

Simple

 

KPI must be in a simplified format in a manner that every person could able to figure it out.

 

Relevant and reliable

 

Data to design KPI should be reliable with regard to the accuracy of the information and it should be relevant to the already set targets of the company.

 

 

Visibility

 

KPIs should properly communicated /display to the company employees in order to get their active involvement towards achieving KPIs of the company.

 

Achievable

When planning the targets/goals need to analyze previous KPIs and accordingly need to set realistic targets in order to work force to have a positive impact towards achieving mile stones according to KPIs

 

Measurable

 

KPI must be quantifiable to measure both negative and positive variances against a set target/goal.

  

Please refer below figure with regard to monitor performances using KPIs.

Figure 2- 12 process KPIs to monitor Process Performance in 2023

Conclusion

KPIs are helping employees to identify the present position of the company and also it gives directive to what we need to do to achieve the set targets. Since most of the KPIs are published monthly we have good insight on the performance of the company and we could implement remedial actions then and there rather than waiting till the annual performances released.

Also, KPIs are helping management to forecast future plans of the institution in a scientific manner. Apart from that institutions are able to take their employee corporation as well by actively involving them in KPI management.

Further KPI has been using by my own organisation to identify rework which has shown greater improvement over the last few years with regard to cost and time optimization. Also, employees’ usage of e learning platform is another KPI which encourage employees to be educated in their work role. These things have impacted positively on customer experience which has improve the productivity of the organisation.

 

References

Figure 1- Key Performance Indicators and why they're good for any business – EFM ; online available at : https://www.google.com/search?q=key+performance+indicators&sxsrf=APwXEdeQsSq7f_yKgSyg6XaZM12OQeHffQ:1683215074792&source=lnms&tbm=isch&sa=X&ved=2ahUKEwjs-vPkgNz-AhU5ZWwGHVtDD-oQ_AUoAXoECAEQAw&biw=1366&bih=592&dpr=1#imgrc=SZB-h-Ldf_SrPM

 

Figure 2- 12 process KPIs to monitor Process Performance in 2023 ,online available at : https://research.aimultiple.com/process-kpis/

Rolstadås, A.: Enterprise performance measurement. Int. J. Oper. Prod. Manag. 18(9/10), 989–999 (1998)

Bhatti M.I et al,2014 ; The key performance indicators (KPIs) and their impact on overall

organizational performance, Quality & Quantity, available online at : https://www.researchgate.net/publication/266398617_The_key_performance_indicators_KPIs_and_their_impact_on_overall_organizational_performance

 

Ghalayini, A.M., Noble, J.S.: An integrated dynamic performance measurement system for improving manufacturing

competitiveness. Int. J. Prod. Econ. 48(3), 207–225 (1997)