"If it can not be measured it can not be managed" - Peter Drucker
When was the last time you contemplated creating KPIs for your team?
KPI's, Key Performance Indicators, Key Success Criteria or any other term you would like to use are essential to drive employee performance, productivity and engagement.
Too often this task lands firmly in the 'too hard basket' because let's be honest it's not the easiest task to do.
Done poorly, creating KPIs are an utter waste of time. For many of you who have been in the position where you have been allocated or managed staff with ineffective KPI's, this will have undoubtedly influenced your desire to develop better targets for your future teams.
If this sounds like you, I am going to challenge you to rethink your approach today. I am challenging you to set just 1 KPI for each role over the next week, and 3 big ones for your business or team.
Our team members fundamentally want to know 3 key things from their leaders:
1) What do we expect from them?
2) How are they measuring against those expectations?
3) What does the future hold?
Great KPI's deliver points 1 and 2 directly. Supporting performance review and development process further backs up point 2 and provides them with point 3 in the same instant.
If there was one single thing I could put in place that would deliver what employees need, and want, from me as their leader, do you think I would prioritise doing it?
If by doing this one single thing I would be guaranteed higher productivity, stronger employee engagement and, ultimately, better business results, do you think I should prioritise it?
You better believe I would and should!
That one single thing is a solid set of KPIs.
KPI's are the real deal and let's take a clear look at what they are and why they work.
Put simply, Key Performance Indicators (KPI's) are a quantifiable measure used to evaluate how well a business, team, or individual employee is performing against predetermined performance goals or objectives.
You set a performance goal or objective, and the KPI is the measure of how we are doing in achieving that.
How do you know what's working and what isn't?
How do you know who needs more support, and who is a strong achiever?
How do you measure your business success?
Without a clear target for employees to shoot for, your business will never reap the full benefits of employees motivated by their own learning, success and professional rewards. KPI's create that target, that shining star, for your employees to be moving towards constantly. This provides positive forward momentum for your business, fosters accountability and an internal culture for success.
KPI's also give you accurate information about your employees, their performance and provide you opportunities to praise and reward as appropriate, encouraging them to continue to strive towards their future KPI's and allowing you to address any challenges for them that might be uncovered through this process.
Seems simple, right?
So why do so many struggle with this process?
Aside from the classic overthinking and underthinking of the process, often we fail to follow a strong and robust framework.
With KPI's, the simplest framework to use is the SMART goal setting framework.
SMART = Specific Measurable Actionable Relevant Timebound
Tie in your organisation's value or vision.
Connect each KPI to your value or vision.
Follow up by assessing and revising KPI's on a regular basis - they don't work unless you commit to this step.
e.g. Your employee is responsible for customer service for your education business. Their KPI is to improve customer retention (S) by 10% (M). They do this by implementing monthly check-ins (A) to ensure the customer is accessing their course (R), responding to questions and feeling they are getting value. They are to achieve this KPI by the next quarter (T).
There is one caveat.
KPIs, while a singularly amazing tool for productivity, engagement and success, don't work unless you regularly evaluate the results, take the learning and evolve your business according to what you learn.
There's no point setting a target, if you're not interested in seeing whether it's been hit - or the reasons why your employees may have missed it.
So get started on getting those KPI's in place.
Need some help getting started? Grab out free KPI Creation Guide here.