Performance Management training session

Performance Management and KPIs

Linking Activities to Vision and Strategy

Is your team's performance reaching company targets?

© iStockphoto/Denotti

Managers talk a lot about employee performance.

There's constant pressure to achieve performance targets, to reach higher performance levels, and to ensure that people's work supports and furthers the organization's goals.

Performance management is the process used to manage this performance.

The key question asked is, "How well is an employee applying his or her current skills, and to what extent is he or she achieving the outcomes desired?"

The answer has traditionally been found in the performance evaluation process, where managers look for hard data to tell how well an employee has performed his or her duties.

What is often missing from this evaluation, however, is the part about making sure that the employee is doing the right thing. After all, you may have a very hard-working and dedicated team member, but if he or she is not working on things that advance the organization's purpose, what is the point?

KPI DiagramThis is where key performance indicators come into play, and they apply both at the organizational and individual levels. At an organizational level, a Key Performance Indicator (KPI) is a quantifiable metric that reflects how well an organization is achieving its stated goals and objectives.

For example, if your vision includes providing superior customer service, then a KPI may target the number of customer support requests that remain unsatisfied by the end of a week. By monitoring this, you can directly measure how well your organization is meeting its long-term goal of providing outstanding customer service.

If your KPI is inappropriate or nave, however, the resulting behaviors may be counterproductive. For example, using the same goal of providing superior customer service, the first KPI that often comes to mind is the number of customer complaints received. Intuitively, you may feel that the fewer complaints you receive, the higher the customer service you're offering. This is not necessarily true: You may be getting fewer complaints because you have fewer customers, or because customers are not able to access your support services.


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