KPI Measurement Techniques

by Greg Skloot
Management   |   2 Min Read
key performance indicators

Key performance indicators (KPI) are an important technique used to measure the health and performance of a company and its employees. Each KPI is simply a metric that if positive, demonstrates that the company is moving in the right direction. For example, new revenue from sales might be a KPI that is important to measure your sales team’s performance. However, often the challenge is figuring out exactly what KPI are important to measure in your business. Consider these approaches:

1. Determine together how “success” is defined

In order to measure staff performance, the team must first have an agreement on what “performance” means. For example, if you are leading a sales team, there must be clear goals of “closing 3 deals per week.” It’s simple, but if that goal isn’t defined and made clear to everyone, we can never hold the team accountable and track the KPI.

2. Find the source of data to measure progress

Now that the team understand what success means, we need to identify a source of data to effectively measure progress. This might be a CRM system or it can be as simple an internal spreadsheet that is updated each time something is done. The most important part is that we have the data in written form so everyone can see it. Using a system that everyone has access to is an important KPI measurement technique to keep everyone transparent on the progress towards achieving your goals.

3. Constantly share updates and unblock issues

Good KPIs will be updated frequently. The whole point of them is to indicate if we are performing or not, so the manager can make adjustments and guide the team towards success. Consider sharing status updates in writing each week so everyone is clear on the plans, progress and problems each team member is encountering. Look at a tool like Weekly Update to make that process smooth.

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4. Be open about progress and make KPI measurement visible

Performance indicators cannot be something that is just reviewed at a monthly staff meeting. We need to be looking at them frequently (often daily) to quickly identify issues and address them. Whether automated or manual, there must be a regular process for reporting KPIs to the team.

5. Take action if the performance indicators are low

Even the most well-defined, easy to access staff performance indicators are useless if the team doesn’t take any action when they are indicating poor performance. The responsibility is on the manager to hold the team accountable to a certain level of performance, and using the KPIs to do that. This is a key technique for being effective: taking action on the results of a KPI when you measure it.

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