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KPI’s

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Can anyone give me a 'dictionary definition' of what exactly the term 'key performance indicators' means please?
Answers on a postcard......
Lisa Birch

6 Responses

  1. how would I measure that?
    I am not sure that this constitutes a dictionary definition (!) but I have done a fair bit of work with KPIs. They are the domains or aspects of performance output from which specific performance objectives can be defined for an individual or a group. For example in Sales, the ultimate objective is to deliver a certain sales target. However KPIs that contribute to the objective might include: number of client contacts made, number of appointments made, percentage of appointments converted to sales etc. KPIs are derived from (repeatedly) asking the question ‘how could we measure their performance?’

    I hope that helps

  2. KPIs response
    I agree with the other offering to this question and would build upon the comments by saying that KPI’s are the process of identifying factors that are critical to the success of an aspect of the business. This requires the establishment of measures that will capture the performance of the business against the achievement targets set. KPI’s have become an inherent part of the benchmarking process whereby businesses can compare their performance against each other using these critical success measures.

    You might find further help in a book called a practical guide to using the balanced scorecard – Performance Drivers by Nils-Goran Olve, Jan Roy and Magnus Wetter.ISBN 0-471-98623-2. This helps place KPIs within the wider move towards measurement of performance.

  3. KPI question
    I agree with the responses given but would add that KPI’s are not all quantative. If the objective is to provide a business result to a specific quality standard then this would also be included in the KPI’s. So they can be quantative or qualitative.

  4. Perhaps they can be seen as Financial Performance ratios for non
    It might be helpful to look at indicators as being the same concept as financial performance ratios but for people related issues.
    As with fiancial ratios there are some fairly standard ratios, some specific to industries and some that you find useful for your use only.
    Once you have got the indicators that are relevant to you, then you must standardise them. What is normal, what is weak etc.

  5. KPIs simple definition?
    Give an indication of whether objectives/targets are being achieved & may be measures of quantity, quality, time or cash. Factors to consider; KPI must be unambiguous, clear how results are calculated, reflect achievement, be agreed by subordinate & superior, costeffective to monitor & importantly provide timely results for corrective action.

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