Leveraging SMART KPIs to Improve Your Business Performance through People
For a company, growth and improvement could have multiple subtexts- increase in revenue, better sales, company growth, etc. All these factors come under the umbrella of overall development of an enterprise.
Thus, with multiple parameters involved, it can become a tricky prospect for employees to be in cognizance of the business improvement strategy of their company if their own tasks and goals are not aligned with the same. This is where Key Performance Indicators (KPI) come into play. Within this context, a KPI could be considered as a quantifiable measure of performance for a particular objective over an agreed period.
KPIs can be simple or elaborate, based on an organization’s vision and business objectives for its progression and the inclusion of its people, processes, and programs. These could be thought of as Critical Success Factors (CSFs) or the aspects that the organization must excel at to meet its targets and objectives. In turn CSFs need to be measured ensuring that progression and improvement remains on track and CSFs should be represented as useable metrics. These are known as KPIs. To ensure the effectiveness of KPIs for Performance Measurement and Performance Monitoring, they should be developed as SMART KPIs.
They are termed SMART KPIs is because they should be Specific, Measurable, Attainable, Relevant and Attainable. The performance measurement with these indicators is periodically assessed, discussed, and modified for betterment to push the organization towards its goals.
So, how can employees as well as organization benefit from SMART KPIs? Well, we have mentioned in the title that they improve business performance, but that does not give you the full picture, right? Let us take a closer look.
Performance Tracking Through KPIs - The Crucial First Step
Imagine going on a road trip without any signs on the road - you would be lost. KPIs are like the road signs they indicate and enable you to track your performance to assess whether you are moving in the right direction. So, for example, your goal for the quarter is enhanced customer satisfaction, a KPI in that domain will give you quantifiable measure in terms of customer satisfaction index/score. This way, the employees as well as the organization can be on the same page with complete visibility. This can translate into better performance management.
Bridging the Learning Gap - Skill Assessment
If a certain KPI is not being met over a period, it can be an indicator that the team requires further skills enhancement. This can be then achieved by providing relevant training to the right employees. Similarly, employees can identify learning gaps in their profile by assessing the KPIs and approach the learning department to get required trainings. This way, a KPI model is created wherein a KPI is grouped with related event/ activity and a process flow is created to add crucial information pertaining the requirements.
Better Decision Making - Visual Roadmap for Planning
In this digital era, you can obtain and create curated dashboards and KPI scorecards to help you get all the performance related metrics right in front of your eyes. When the stats are available for everyone to see, people management and self-management gets more effective. Such transparency also enables executives in chalking down factors that are contributing to the growth of the company and the ones that are not. Such data forms the base of making sound decisions. By generating actionable insights from the KPIs, a fortified plan can be made for each department, every team and all the employees to work collectively towards business improvement.
Informed Employees- Generating Feeling of Empowerment
The workplace today (especially in these post-pandemic times) is as dynamic as it can get. A top-down approach is not only conservative, but it also leaves employees feeling left out. SMART KPIs address this issue by making employees aware of their individual progress and its relation to the overall organizational performance. Thus, with any KPI, an employee is gaining crucial knowledge about company goals. This makes them feel empowered and they can proactively participate in achieving the organizational goals.
Better Team Management - A Tool for the Managers
Often team leaders and managers struggle to help their team members achieve their goals because they lack proper measurement of performance. With KPIs, your team’s performance for a particular period (quarter, half year, annual) is right in front of you and you can deduce the areas of improvement and required for further improvement. Thus, managers can make better calls for their team in terms of individual growth and skill upgradation. By continuously recording KPIs, at the end of the year, managers can get a bird’s eye view of their team’s strengths and weaknesses and they can create upcoming year’s plan accordingly
In summation, no matter what the size of your organization is and what goals you are targeting, setting SMART KPIs will ensure that you are on the path of performance improvement. Maintaining KPIs may take some practice and yes, consistent discipline, but the payoffs are worth the efforts. Once you start tracking the progress and respond to the areas of improvement in a proactive manner, the SMART KPIs will begin to become a permanent tool for your organizational improvement through an effective Performance Measurement process enabling optimised Performance Management
Evbex (https://evbex.com) provides consultancy and training support services on all aspects of Performance Measurement, KPIs and Performance Management. https://TheKPIPortal.com provides a unique online platform for your Scorecard and journey towards your goals and objectives.