How To Create and Report KPIs For Your Organization

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By IC
February 11, 2016
4 min read
Blog
Productivity
kpis

Summary: Best practices to create Key Performance Indicators (KPIs) for your organization, plus 3 steps on getting started including; assigning responsibility, measuring success and promoting results.

The definition of success differs from person to person. To define success for your company in a way that everyone understands, it’s best to quantify. Use numbers, also known as Key Performance Indicators (KPIs), to evaluate your success at reaching targets or accomplishing goals. Employees can compare and contrast their KPIs to the overarching corporate goal, work together to achieve departmental KPIs, and match personal goals with company expectations.

Best Practices For KPIs

It’s important to remember that your organization is like a puzzle. Each department has to work together to complete the ‘big picture’. With that in mind, KPIs from all departments, if successful, should define the success of the organization as a whole.

  1. Provide Motives: No one wants to think you pulled a number out of your hat. Is this decision based on historical levels? What do you hope to achieve if this number is met?
  2. Give a Deadline: Most KPIs are set monthly and quarterly. When planning KPI’s set a quarterly goal (120 new clients) and break it down by month to monitor progress (40 new clients each month).
  3. Make It Interesting: Achieving a KPI is a good feeling in and of itself, but to help employees stay on track, give them something to look forward to. Set a theme around your KPI or tie in its success with a team-building activity.

Example of a KPI

When it comes to achieving goals, each participant needs to know how they can succeed. KPIs, though sometimes ambitious, show where expectations are and give staff the knowledge they need to meet, or exceed, those expectations.

Example: Marketing is responsible for bringing in leads to the site. Currently their website bounce rate is 70%. That means 70% of people are coming to their site and leaving without clicking aka not converting to leads. The Marketing departments KPI is to reduce bounce rate by 20% by Q2.

How To Set Up KPIs For Your Company

When setting up KPIs you need to consider the following 3 things; who’s responsible for the KPI (company, department, individual), measurement of success for a KPI (<95% exceeds, 95% meets, >95% incomplete), and finally, reporting and promoting KPI’s.

1. Assign Responsibility

A recent article stated that although it’s important for organizations to select the correct KPIs for optimal business performance, it’s also useful if managers define KPIs for their department and for members of their teams. Ideally, KPIs will cascade from level to level. This allows people and departments to work in such a way that their activities are aligned with corporate strategy. There are 3 main categories to take into consideration when deciding who is responsible for KPIs. They are; organization KPIs, department KPIs, and individual KPIs.

2. Measure Success

Many KPIs are set up in a pass/fail fashion which means if the KPI is not met, there won’t be much room for success. Consider measuring KPIs by providing a range of expectations. For instance, if you want 600 net new clients in the quarter, place a range on what is considered exceeding, meeting, in range, or review of that target. In this case, 600+ exceeds expectations, 600 meets expectations, between 575-600 they are in the range of the KPI and if it’s lower than 575 the KPI requires review.

3. Report and Promote KPIs

Considering each department uses many different external tools to accomplish its goals, it may be difficult to display KPIs for all to see. Your intranet can bridge the gap by reporting and displaying KPIs for all levels of your organization directly on your homepage or department sites. Below are some best practices for displaying KPIs on your intranet:

  • Blogging: Engage employees by displaying the progress of KPIs in a blog post. To get all eyes on the post, display a blog feed on your