HR Glossary  >   Key Performance Indicators

Key Performance Indicators

What are Key Performance Indicators?

Key Performance Indicators(KPIs) are measurable value that describes the effectiveness of an employee or group achieving its objectives. The KPIs determine the responsibilities and duties of the concerned employees and departments by tracking their progress towards the organization’s strategic goals. They are the indicators of how the organization performs to achieve its goal.

For example,

  • The company wanted to review the performance of the marketing team
  • Managers measured employees' performance based on the following KPIs:
    • Organic traffic
    • Website ranking
    • ROI of paid Ads
    • Social media engagement
    • Backlinks generation
  • Based on the measurement of all KPIs, the marketing team's performance was found quite well.

Frequently Asked Questions

How to set key performance indicators?

The higher-level authorities generally set KPIs. How KPIs are formed can be different depending on the type of organization and its employees. Here are some common things to look at when setting KPIs:

  • The indicators should be related to the completion and success of goals.
  • Performance indicators should be measurable and actionable.
  • Keep it relevant to employees' performance.
  • Keep them aligned with the organization's goal.

Are KPIs important for all organizations?

Irrespective of the type of organization, KPIs are equally important for them. To achieve their goals, organizations need to measure the progress of different matrices. Without analyzing the performances, how will they be able to identify the gaps and lacks. KPIs provide the correct information to act upon. When they indicate positive results, employees can be appreciated, and preventive measures can be taken in the case of negative outcomes.

What are the main KPIs for employees?

The common KPIs for employees in an organization are:

  • Work quality and duration
  • No.of lead generation
  • Amount of sales
  • 360- degree feedback
  • Customer engagement

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