home » Statements » Key performance indicators kpi practical. What is a KPI system and how to work with key performance indicators

Key performance indicators kpi practical. What is a KPI system and how to work with key performance indicators

KPIs are Key Performance Indicators. The indicators are different. The key ones are those that affect the profit. The indicator itself can change quite a bit, but the profit can be noticeable.

For example, the owner of a barbershop calculated that if he increased the average bill of a barber by 100 rubles, the annual revenue would increase by 300,000 rubles. If costs remain the same, profits will also increase. Average check barber for a barbershop is a key indicator.

Why KPIs are needed

The task of KPI is to make life easier for the head of the enterprise, the owner of the business and ordinary employees. I introduced the KPI system when our team grew from two people to 22. Too much time began to be spent on solving operational tasks, it was not enough for direct directorial duties. Thanks to KPI, I delegated authority and responsibility to the level of department heads and ordinary employees, but nevertheless I control everything.

When KPIs are not useful, the point is that the company is not working with them correctly. This is exactly what happened to the co-owners of the cosmetology clinic. They worked with the sales funnel, collected indicators, but did not know what to do with them next. And when we figured out which indicators affect and who should be responsible for each, in three months they made the business profitable from unprofitable.

How to work with KPIs

We implement KPI

The authors of management books portray the implementation of KPI as a multi-step procedure: write organizational structure companies, financial structure, business processes. With this approach, the process threatens to drag on for at least six months. Big business this is possibly feasible. But small businesses cannot afford to stagnate for so long.

But there is an easier and faster way. You will need to determine which metrics have the biggest impact on profits and who in the company influences those metrics. Universal set there are no indicators. For each business they are individual. For sales via the Internet, the key indicators are the cost per click and the conversion of the site. For a call center - the duration of the agent's conversations.

We singled out an indicator that affects profit, understood who it depends on, and appointed a responsible person.

We motivate staff

The next step is to create a personnel motivation system. A popular option, when an employee's bonus is tied to the overall result of a company or division, does not work well. The employee is responsible for his own result. But how will it affect the results of colleagues? Therefore, you need to know what a particular subordinate influences and is responsible for, and tie the bonuses of each to his individual result.

It must be taken into account whether the employee directly or indirectly affects the financial result. Our team includes an editorial team that produces content for the site. Content works to increase demand, but indirectly. Revision is the cost center. Therefore, it makes no sense to tie the motivation of the editor-in-chief to profit. But the sales department has a plan for the number of calls and the conversion of applications into sales. They directly affect revenue.

A sign of a good KPI motivation system is when an employee sees in the middle of the month how much has already been done and what needs to be done to get as much as he wants.

Drawing conclusions based on KPI

Employees don't always reach their targets. And not always their own fault. When you see that something is going wrong, do not rush to shoot the staff in the corridor. First, figure out what is the reason. If the employee is not guilty, then it is necessary to help him and create conditions under which he can achieve the target indicators.

If an employee does not fulfill the plan from month to month and the point is precisely in him, all that remains is to replace him with someone who will cope. Neither charm nor good attitude guides. Against indicators, these factors are powerless.

We audit the KPI system

Implementing and setting up a KPI system is not all. You need to understand: the system that you have implemented is not once and for all. In business, things are constantly changing. Every change may require adjustment KPI systems. You have to be ready for this.

When you need to adjust the KPI system, figure out which indicators are no longer relevant, which ones need to be replaced, and who should be responsible for the new indicators. Correcting a system is easier than building one from scratch.

The motivation system also needs to be adjusted. It is best to do this with the involvement of employees. Each employee has personal goals. And the motivation system works best when both you and the employee understand what he wants and what he must do for the company in order to realize his personal goals. If an employee wants to earn 150 thousand a month, let his salary be 75, and the rest - bonuses. So he will understand that he is worth 75 thousand, but he can earn 150 if he is a successful professional.

Remember

Understand what indicators affect profits and who in the company influences them.
Select key indicators that have the strongest impact on profit, and assign responsibility for them. Set 2-3 clear KPIs for each department.
Motivate employees by their key performance indicators.
Monitor whether employees are meeting targets.
When the indicators are not achieved, figure out what is the reason. If an employee needs help, help. If that's the case, replace it with another one.
Constantly audit the KPI system and motivation. Make adjustments when you realize the system needs them.

To write this note it took:

68338 kilometers for travel.
72 man-hours for mail correspondence.
423 man-hours for experiments with a team of 30 people.
88 hours for preparation of reports and presentations at conferences.
17 cups of coffee for a conversation with wise people at an after-party.
About 25 hours to type this text and fix bugs in it :).
A tortured copywriter to death who was forced to parse my drafts, audio recordings, and generally thanks to him.

Lots of money and time. Perhaps the most costly (in terms of nerves, time and money) was the experiment on my own team, which I feel extremely embarrassed to remember. But more on that below.

Sooner or later, probably, every director has a desire to pay fairly. For the work done. And a lot of people are now trying to implement KPIs (Key Performance Indicators). It works like this: you, as a business owner, assign specific goals for employees. They achieve or do not achieve their goals in the process of work. Those who have reached - a bun (cash bonus) is issued.

The point of this approach is to pay fairly. How much you have earned - so much you have received. It's honest, it's logical, it's wonderful!

Well, it makes sense that:

Sellers need to assign a percentage of turnover. Wolves must be hungry. (Yes, there is an alternative opinion that applying such an approach means “imposing an additional tax on yourself.” But as for me, everything is fair here :-)).
Office plankton - set a salary. Stability for them is a very important condition for existence.

But with creative units (designers, programmers) - everything is much more complicated.

We recently conducted a survey of the heads of leading digital agencies and web studios in the country on the topic “how do you use KPI in relation to the work of creative units”, as a result, we got this picture:

Some companies (15%) use KPIs to evaluate the performance of programmers and designers.

About 25% of companies implement KPIs in this moment/ meet resistance within the company or work according to a simplified scheme.

Approximately 30% of companies pay employees based on the subjective assessments of managers. Or rather, 30% admit it ;-)
The remaining 30% do not confess.

The most interesting thing is that many have tried to implement KPIs or are trying now. And not very successful. This does not mean that “KPI is bad”. Poorly prepared food is impossible to eat. Maybe we just don't know how to prepare this KPI?

But statistics show that the overwhelming majority have difficulties with implementation. And there is a suspicion that the same problem is common to all. Let's try to figure it out.

The first thing you will have to face when implementing KPI is the resistance of the team

The question arises: What hovers developers the most when implementing KPIs?

After conducting several experiments and surveys among colleagues, we identified 6 main reasons:

Fear of novelty. Everyone is totally afraid of innovations, thinking that it will get worse ( less money, more work, etc.).
Opaque scheme. By using a compensation scheme with multiple parameters, we increase the risk that workers will not understand it. People are infuriated and demotivated when they do not understand exactly how to achieve best results or why they suddenly got less money.
"Why so many?" Yes, this happens too. If the scheme is built in such a way that the result of this month will appear only in two or three. “This month I worked worse, but I got more. So, last time I didn't get it. Management are idiots, they don’t understand anything about my work!”
The employee's heart rate. It is almost impossible to get into a person's sense of self and give him a "fair" bonus.
Incomplete dependency achievement criteria from the worker. For example, it is not entirely up to the designer whether the design he draws will be sold or whether 50 edits will have to be made.
Reports. I don’t know anyone who likes to write reports, put down the time spent, promise “exact dates”.

If you look at this list carefully, you will find that most of the claims are related to choice, consideration, transparency and the adequacy of the criteria.

OK. So, you just need to come up with Good Criteria!

Well, those who will understand everyone, who will not soar anyone, who will be easy to explain even at an interview. And so that everything was honest, and I wanted to work more and more.

In general, let's try to find Good Criteria. (By the way, "Good" - for whom?). We have three key affected stakeholders: the studio owner, the customer, and the developers.

What can be a Good Criteria from the customer's point of view? Usually it all comes down to money (well, or some actual results):

ROI - Roughly speaking, this is a "return on financial injections." The indicator derived by economists is not entirely applicable to developers: after all, they cannot control the return on their work and measure it in money on the go. That is, they cannot directly affect the indicator.
Low cost of the feature. It is beneficial for the customer to have low cost features. And for the developer, this is a pattern break ("How is it: I get more money because I work cheaply?").
Degree of satisfaction. I don’t know how to calculate it, but given that people want happiness or at least less steam (Dmitry Satin), then we can even offer this formula:

However, the reality now is such that to come and offer, for example, to a designer the dependence of his salary on the ephemeral “satisfaction” of the customer is a guaranteed way to be left without a designer. A very serious crisis is needed for this topic to start working. Or a lot of good extra designers.

Date of release. Everything seems to be logical: we hand over the project on time - we get a lot of money, we hand it over ahead of schedule - we get even more money. The indicator is suitable, but it has an already identified problem: not everything depends on the developer. Deadlines most often arise from the client-management side. (Hence the fair: “Why should I lose in salary, although this manager did not knock content out of the customer?”).

OK. These Criteria, which are Good for the customer, will obviously not be Good for the developer. (I have no illusions, now you can easily come up with another 200 pieces of different criteria that are significant for business. Write and discuss in the comments :))

But you can measure PERFORMANCE! It's so simple!

Or not? How to measure it? If I painted the fence, then everything is obvious. But there is a catch. There are many thinking, creative, talented people in our industry, and no one paints the fences. Let's look at the example of programmers. So what Good Performance Measures come to mind?

KSLOC. Do you know what it is? And what is the Hindu code - do you know? Implement - find out. KSLOC is the number of thousands of lines of code. If you link this indicator to salary, then wait for thousands of lines of copy-paste. A friend of mine received a completed order somewhere in Bangalore - a php script, for only ten dollars, but for as much as 20 MB. And he worked!
The amount of some shit per hour (WTF/h). The number of pages drawn per day, the number of features implemented per hour, etc. It seems to be a normal metric - something can actually be calculated and used to distribute goodies. However, a problem similar to the previous point arises: a drop in quality at the expense of quantity, an increase in technological debt. Motivation, interest, satisfaction - everything is rapidly falling down. As a result, turnover and low qualification.
The number of bugs. The fewer bugs, the more we pay. Everything is logical, isn't it? Not really. Is there a bugtracker implemented in your studio? If yes, forget it. Your testers will very soon agree with your programmers on how many bugs to write and how many not, so that it is not to the detriment of both parties.
Processing.“If you stay late at work, you don’t work well.” Is that also logical? We fight overwork, for example, turn off the electricity after 18:00. However, here it must be remembered that the psychology of a developer is fundamentally different from the psychology of office plankton: if he sits until the evening, then he is interested (and this should be encouraged).

People work in our field mainly because they are interested in it.

Do not interfere with stupid corporate rules.

focus factor. This metric came to us from my favorite Scrum. Shows how much the task should have taken ideally, and how much it ended up being. "Concentration" of the team on the project. Is it possible to pay money based on this criterion? Quite, but if your managers are not “techies”, then programmers will deliberately overestimate time estimates, minimizing their own risks. The consequence of this approach is that the deadlines are stretched, the customer is indignant (or does not buy from you). Yes, and every meeting will turn into squabbles and arguments in 10 minutes.
Velocity. Also from Scrum. The notorious "performance". It is rather non-obvious here, the humanities can skip the paragraph.

Allows you to predict how many tasks the team will be able to score in the next stage, depending on how many they completed in the previous one. The problems are the same as the focus factor, plus one more is added. Often a manager (especially an inexperienced one) who senses that team performance can be "measured" begins to use this tool "in the other direction." But Velocity cannot be an accurate criterion, because shows how long the same task can take, performed by the same team under the same conditions. However, after completing the task, the team has already changed: it has gained experience on how to solve this particular task. And the metric won't work again.

cycle time. How quickly time passes from the moment the idea arose to implement a feature on the project, until the moment it was done.

I personally really like this metric. One of the key ones that should be measured and optimized. But developers do not directly influence this factor. This is a very high level metric. If you start paying the team a salary based on their Cycle Time, it means that you, as a leader, do not seek to solve the problems of the team and understand the processes, but simply transfer everything to the team.

An attempt to make a developer's salary dependent on a high-level metric is evidence of managerial impotence

So, is it possible to measure the effectiveness of a team? Yes, you can, especially since we have written about a dozen indicators for this. And another dozen or two can be thought of in the comments. Another question is whether it is worth making the developer's salary dependent on indicators? Now this is risky.

I start working, and I do my job - it's good, because I'm a professional and it's interesting for me. But if they start to spread rot on me with stupid metrics, I will optimize these stupid metrics. I will write 1000 lines or draw 10 shit designs a day. And my interest in work will dry up very, very quickly, I will stupidly want dough. This is called substituting intrinsic motivation for extrinsic motivation.

The story of a madness

Once, “a good friend of mine”, the head of the studio, got excited about the idea of introducing a very fair wage, where a bunch of parameters would be taken into account. Naturally, the matter was approached on a grand scale. Wrote a whole bunch of criteria, such as:

- monthly plan for worked man-hours and actual hours worked;

- quarterly sales plan;

- the number of wards and their salaries;

- the amount of positive communication from customers (satisfaction);

- the number of repeated requests from the client with new projects;

- awards at specialized competitions;

— negative communication with the client;

- the number of bugs found by QA;

- height accounts receivable;

- the number of bugs found by the client after the start of the project;

reading books, writing articles.

And 20 more pieces. (Useful list, take it ;-)).

All this was brought into one system. Naturally, the system had to be balanced. Therefore, in the first few months, it was decided to calibrate it on virtual "wrappers". A large board was invented on which a list of employees was drawn. Various “wrappers” were posted on the board - as soon as the payment was received, the project ended or some good (or bad) event occurred that would affect the salary in the future.

Literally within 1 hour, the faces of the employees became very, very gloomy. A couple of days later, questions began: “why do I have fewer candy wrappers?” or “why didn’t they give me a candy wrapper - did I help Vasya?”.

The mood was becoming unsettling. Within a week, project evaluations were taking 4 times as long as they used to, and each evaluation turned into an endless argument between the developer and the project manager. By the end of the month, few people wanted to help their comrade - they explained that "there is enough of their own work." An infinite number of situations were revealed that could not be formalized. Many candy wrappers were issued according to subjective feelings.

Few people wanted to work without candy wrappers, the tension grew. Productivity and motivation - fell. A month later, the program was cancelled. After a couple of months, the anxiety disappeared.

As a conclusion:

Different metrics should be measured and thought-think-think how to influence them. But do not transfer high-level metrics directly to developers and designers. And further.

“A developer has four components: body, heart, mind and soul.
1. The body needs money and security.
2. Heart - love and recognition.
3. Mind - development and self-improvement.
4. Soul - self-realization.
S. Archipenkov

Respect other people and give them the opportunity to do what they like)).

And the very last. There is a suspicion that every leader must understand for himself whether his organization is ready for the transition to KPI. I hope this small selection of articles that we managed to collect will help in making the right decision.

You will learn:

What are the pros and cons of the KPI system.
Which employees should not implement KPIs.
What KPIs to set for the manager.
What to do if employees sabotage KPI implementation.
How to review the KPI system.

What is a KPI system

KPI is a special system of indicators, using which employers can evaluate the performance of subordinates. At the same time, KPI - key indicators of each employee - are tied to general business indicators (level of profitability, profitability, capitalization).

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There are different KPI goals, but the main one is to create a situation in the company in which employees from different departments could act together, without contradicting their business actions to each other. The activities of one specialist should not interfere with the work of another or slow it down. All employees must strive for a common goal and work effectively, receiving bonuses for this.

It is believed that KPIs are directly related to BSC (Balanced Scorecard - balanced system indicators), but this is not the case. The creators of BSC did not use the term KPI. They used the concept of "measure", "meter", or measure.

KPI and BSC are indirectly related. BSC is endowed with the perspective of business processes, where the associated goals are present. To measure how these goals are achieved, specialists use business process KPI indicators.

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So what is KPI in simple words? These are certain indicators, thanks to which it becomes much easier to understand what actions should be taken to increase efficiency. At the same time, efficiency is not only the number of manipulations carried out over a certain period of time, but also the benefit that the company received from the work of a single specialist.

Company KPIs are shared. However, in the divisions they are divided into small ones, called personal ones. There cannot be many of them. 3-5 clearly defined and understandable indicators are enough. The main requirement is the ability to simply and quickly measure them.

Here are some examples of KPIs . Possible KPIs for a sales manager are as follows: “Sales volume is not less than…”, “Number of new clients is not less than…”, “Average contract amount per client is approximately…”, “English proficiency is not lower…”.

Another example of KPIs. You are the owner of a large point of sale household appliances. 12 managers work for you. How effectively each of them works during the month is evaluated based on the following indicators:

how many people the manager talked to bought the equipment (percentage);
the amount of the average check;
to what extent the sales plan has been fulfilled (for example, the amount of the minimum bar is 350 thousand rubles a month; the level of overfulfillment of the plan as a percentage will affect the manager’s salary).

For example, you need to sell mixers of a certain brand and manufacturer. In this case, it would be reasonable to set a plan for each manager with a minimum number of mixers equal to 5. If the manager sells equipment more than the planned number, he receives 3% of the cost from each "extra" mixer. For specialists, this is a great motivation, KPI of this type allows you to successfully sell products. Experience shows that the optimal number of KPI criteria for one specialist is from 5 to 8.

3 interesting facts about KPI

The Key Performance Indicators system has been used in the West for over 40 years. In the CIS countries and Russia, it has been used for about 15 years.

In a number of states (Korea, Singapore, Hong Kong, Japan, Malaysia, Germany and the USA), the Key Performance Indicators system is a national idea. KPI is not just a concept there, but the basis of the work of all companies.

Russian President Vladimir Putin proposed creating a Key Performance Indicators system to evaluate how officials work.

How to avoid mistakes when implementing KPIs

The editors of the magazine "General Director" considered 6 popular mistakes in the KPI system and gave advice on how to avoid them.

Where does KPI development begin?

KPIs should be created from the top down, starting with the company's large-scale goals to the tasks facing the individual employee. To fully solve problems, it is necessary that all personnel be involved in the preparation of the KPI system. We are talking about employees working in the planning, economic, financial, organization management specialists labor activity, a team of personnel departments, sales, technology department.

To get started, the organization needs to figure out which KPIs to prioritize. To do this, the enterprise specifies and checks the goals of a strategic and operational nature. The formulation of the goal should ideally be such that it does not have a clear designation of the financial component as the main indicator. Better if financial indicator will follow from the main task. With this approach, the company will be able to feel confident in the crisis period.

Requires connection of the goal with the market environment, changes in the market. For example, a company may set itself the goal of becoming one of the TOP-3 in the market for its products or take a leadership position in a certain territory. After being formulated the main objective, subgoals are highlighted.

After setting goals, you should analyze how effectively the company is now working and how it solves current problems. At the same time, it is necessary to determine how it will be calculated wage employees.

When creating KPIs in an enterprise, it is important to budget for personnel costs. In this case, it is divided by types of payments. In addition, it is required to take into account the indexation of wages and career specialists.

At the final stage of development, provisions are created, KPI maps are prepared, the methodology for calculating each key indicator is prescribed, and the system is coordinated with the management of all independent units in the company.

The regulation on KPI should include information about the goals and objectives pursued by the system:

Improving results and increasing the efficiency of specialists. Development and implementation of employee motivation.
Increasing the profitability of the company. Development of goals and performance indicators for each position in the departments and divisions of the company.
Creation information base which will allow you to make the right management decisions. Ensuring prompt collection of information and control over the functioning of the system.

Key performance indicators and their types

Key KPIs are:

lagging, reflecting the results of the work at the end of the term. We are talking about financial KPIs that testify to the potential of the company. However, such coefficients cannot show how efficiently the departments and the organization as a whole work;
operational (leading), which allow you to manage the state of affairs during the reporting period in order to achieve the goals at its end. Operational performance indicators help to understand how things are now at the enterprise, and, at the same time, demonstrate financial results further. On the basis of operational KPIs, one can also judge how well the processes are running, whether the products are good, how satisfied customers (consumers) are with them.

The main conditions are that indicators should contribute to the implementation of intermediate and final goals, and all indicators can be quickly and easily calculated. The coefficients are different - qualitative (in the form of a rating or points) and quantitative (in the form of time, money, production volume, number of people, etc.).

Examples of KPIs

KPI for an employee technical support. A specialist of this profile should advise those who are real buyers and help potential customers. The set of KPIs in this case is small. The work of an employee is evaluated on the basis of how well he conducts consultations, in what quantity, whether customers are satisfied with the service.

Key performance indicators for a sales manager. The number of new buyers must not be below a certain mark, the volume of sales must not be less than the established limit, the size of the average contract per client is within the indicated boundaries, the ownership English language on one level or another.

The KPI system consists of a number of indicators, but the universal ones are:

Process, indicating what result the process has brought, how requests from consumers are processed, how new products are created and brought to the market environment.
Client: how satisfied are the customers, how is the interaction with the sales markets, how many buyers were attracted.
Financial allow you to judge the external economic situation of the enterprise. Here we are talking about about the level of profitability, turnover, market value products, financial flow.
Development criteria show how dynamically the company is developing. This is the degree of productivity of specialists, the level of staff turnover, the cost per employee, employee motivation.
Indicators external environment: how the price fluctuates, what is the level of competition, what price policy On the market. These indicators should certainly be taken into account when creating KPIs.

How to calculate KPI

Stage 1. Choice of three key indicators efficient operation specialist:

the number of users who were attracted to the site;
the number of repeat orders from existing customers;
the number of recommendations and positive feedback that appeared after purchasing a product or ordering a service on the website and social networks of a trade organization.

Stage 2. Determining the weight of each indicator. The weight in the total is equal to 1. At the same time, the largest share belongs to the priority indicator. As a result:

the number of new customers is given 0.5;
the number of repeat orders - 0.25;
reviews - 0.25.

Stage 3. Analysis of statistical data for the past six months for each KPI and development of a plan:

Stage 4. KPI calculation. An example is presented in this table:

KPI calculation formula: KPI Index = KPI Weight * Fact / Goal

In this case, the goal is the planned indicator of the marketer. The fact is the real result.

It becomes clear that the specialist has not achieved his goals to the end. However, based on the overall rate of 113.7%, it is safe to say that the real result is quite good.

Stage 5. Payroll preparation.

In total, the marketer is owed $800, of which $560 is a fixed portion and $240 is a variable portion. The full salary of a specialist is paid for an index equal to 1 (or 100%). Thus, the indicator of 113.7% indicates that the plan was overfulfilled, which means that the marketer is given a salary with an additional bonus.

Result:

560$ + 240$ + 32,88$ = 832,88$.

If the KPI index is less than 99%, the amount of bonuses is reduced.

Such a table allows you to see the problems in the work of a marketer, the difficulties that he cannot cope with. Probably not enough good results activities can be caused by the wrong strategy to increase the level of customer loyalty. However, it is possible that initially the plan itself was drawn up illiterately. In any case, the situation must be controlled. If things don't improve in the future, reconsider the requirements for performance indicators.

If you stick to such a policy, you will learn what KPIs are in the process of production, sales, etc. You will better understand how the calculation of indicators and the process of their implementation should be.

The calculation can be modified taking into account the planned results, supplemented with new values: an indicator of the number of solved and unsolved tasks, a system of penalties for poor performance on the main points in the plan.

So, for the implementation of the plan for less than 70%, the employee may not receive a bonus at all.

There is also the following scheme for calculating the bonus part of the salary for a specialist who has fulfilled the sales plan:

Implementation of KPI in the company

Both employees and third-party consultants can be responsible for the process of implementing the KPI system created in the company. At the same time, one should take into account the specifics of the enterprise, how business processes flow in it, what goals and objectives the company sets for itself. It is necessary that the rank-and-file staff be aware of how the payroll system will change. Communicate to employees that the main indicator will be the level of their effectiveness. When introducing a KPI system, specialists should be trained. Personnel must understand that changes are beneficial mainly to them. Implementation of the system involves the development of special documentation: employment contracts, staffing, collective agreement and other papers related to payment for the activities of employees.

Before introducing a KPI system, test it with pilot project. Take 1-2 departments and work out new processes and wage formation in them in a pilot mode. The ratio of fixed and bonus components of remuneration can be adjusted in real time, taking into account target indicators for specific groups of personnel.

When new order has been tested and fully adjusted in the company, you can introduce it to other departments. Remember that it is better not to implement a KPI system without testing. As part of the pilot project, it will be possible to clearly understand what difficulties the system causes for personnel, learn about possible shortcomings and quickly eliminate them. All employees of the enterprise must work towards a common goal. Otherwise, employees will only experience discomfort, and all actions and aspirations will be in vain.

In the process of introducing KPIs in the company, make sure that the indicators can be adjusted if necessary. Thanks to the constant monitoring of indicators, it will be possible to adapt in time to changes in market environment and edit the working strategy. In addition, every year it is necessary to improve the model for the formation of premiums, that is, to optimize it. As part of the optimization, the evaluated indicators are changed to others that are more relevant for certain employees and departments.

What KPIs to set for the manager

KPI personnel and management should be related to the main objectives of the enterprise. You need to know exactly what you want to achieve after a certain period of time. You can strive to get ahead of the competition and become a leader in your industry. Another option - the head of the company wants to sell the business for favorable price. KPI for the first case is an increase in the customer base and sales volumes, for the second - an increase in the capital of the company and the achievement of the maximum sale value.

The main goal in without fail it is necessary to write down and formalize, and then break it into subgoals. When specialists successfully fulfill subgoals, they approach the solution of the main task of the enterprise.

If it's about large organization or a holding company, a director's KPI is required for each division and branch. If the owner of a large enterprise plans to compare the performance indicators of General Directors who are geographically distant from each other, it is necessary to develop unified system estimates. At the same time, it must be remembered that those KPIs that are easy to achieve in large regions are not always easy to achieve in small ones. In this regard, the system can be formulated in approximately the same way, but the numbers of indicators should be different for managers in different regions.

When preparing KPIs, try to set indicators in the optimal amount so that the employee can easily monitor work performance. It is better if there are five KPIs. When installing more indicators, the director may not pay attention to the main ones and focus on the minor ones.

When creating a KPI system for management, a combination of general and personal indicators is optimal. General indicators are called the results of the activities of the department subordinate to the specialist. On the basis of general indicators, it becomes clear how the team works, how much the manager is interested in solving the tasks. Personal indicators are called individually achieved goals and results of activities.

If the KPI system is created well, the ratios show how each of the managers works, and this information is useful for the company.

KPI is a performance indicator that allows you to objectively evaluate the effectiveness of the actions performed. This system is used to evaluate various indicators (the activities of the entire company, individual structures, specific specialists). It performs not only the functions of control, but also stimulates labor activity. Often, a pay system is built on the basis of KPI. This is a method of forming a variable part of the salary.

KPI Key Performance Indicators: Examples in Excel

The stimulating factor in the KPI motivation system is cash reward. It can be received by the employee who completed the task assigned to him. The amount of bonus / bonus depends on the result of a particular employee in reporting period. The amount of remuneration may be fixed or expressed as a percentage of salary.

Each enterprise determines key performance indicators and the weight of each individually. The data depends on the tasks of the company. For example:

The goal is to provide a product sales plan in the amount of 500,000 rubles per month. The key indicator is the sales plan. Measurement system: actual sales amount / planned sales amount.
The goal is to increase the amount of shipment in the period by 20%. The key indicator is the average shipment amount. Measuring system: actual average shipment / planned average shipment.
The goal is to increase the number of customers by 15% in a certain region. The key indicator is the number of customers in the enterprise database. Measurement system: actual number of clients / planned number of clients.

The company also determines the spread of the coefficient (weights) independently. For example:

Implementation of the plan less than 80% is unacceptable.
Implementation of the plan 100% - coefficient 0.45.
Implementation of the plan 100-115% - a coefficient of 0.005 for every 5%.
No errors - coefficient 0.15.
There were no remarks in the reporting period - coefficient 0.15.

It's only possible variant determination of motivational coefficients.

The key point in measuring KPI is the ratio of the actual indicator to the planned one. Almost always, an employee's salary consists of a salary (fixed part) and a bonus (variable / variable part). The motivational factor influences the formation of the variable.

Let's assume that the ratio of the fixed and variable parts in the salary is 50 × 50. Key performance indicators and the weight of each of them:

We accept the following values of the coefficients (the same for indicator 1 and indicator 2):

KPI table in Excel:

Explanations:

This is a sample KPI table in Excel. Each enterprise makes its own (taking into account the peculiarities of the work and the bonus system).

KPI Matrix and Example in Excel

To evaluate employees on key performance indicators, a matrix, or agreement on goals, is drawn up. The general form looks like this:

Key indicators are the criteria by which the work of the personnel is evaluated. They are different for each position.
Weights are numbers in the range from 0 to 1, total amount which equals 1. Reflect the priorities of each key indicator, taking into account the objectives of the company.
Base - the allowed minimum value of the indicator. Below the baseline - no result.
The norm is the planned level. What an employee must do. Below - the employee did not cope with his duties.
A goal is a value to aim for. Above the norm, which allows to improve the results.
Fact - the actual results of the work.
The KPI index shows the level of the result in relation to the norm.

Formula for calculating kpi:

KPI index = ((Fact - Base) / (Norm - Base)) * 100%.

An example of filling out a matrix for an office manager:

The performance ratio is the sum of the products of indices and weights. Employee performance evaluation is visually shown using conditional formatting.

KPI-based personnel are gaining more and more popularity in Russia. The main advantages of such mechanisms are in the rational reflection of the activities of companies.

KPI: what is it

KPI (KPIs) is an English abbreviation for “key performance indicators”, in Russian it is referred to as KPIs - key performance indicators (sometimes parameters). But in the original foreign sounding it is used as a norm. KPI is a system that allows you to evaluate the performance of the company's employees in order to achieve goals (strategic and tactical).

"Key indicators" allow the company to analyze the quality of its structure, the potential in solving problems. On the basis of KPI, a system of the most important factor is also formed: if there are no signs of targeting, then there is nothing to apply to “key indicators”. and KPI, thus, are two interrelated phenomena. The first involves, first of all, forecasting the results of work, as well as planning how these results will be achieved.

Who came up with KPI?

History does not give an unequivocal answer to this question, however, one can trace how the world management went to understand KPIs, what it is and why it is useful. In the late 19th and early 20th century, the sociologist Max Weber determined that there were two ways to evaluate the work of employees: the so-called "sultanic" and meritocratic. According to the first, the boss (“sultan”), at his own discretion, assessed how well a person copes with his duties. The rational principle here plays a secondary role, the main thing is a purely emotional perception of the work of a subordinate.

The meritocratic method is when the results of labor are evaluated according to real achievements, with the involvement of objective measurement mechanisms. This approach was adapted by management theorists in Western countries and gradually crystallized into what we know as the KPI system. An important role in systematizing the rational evaluation of personnel performance was played by the works of Peter Drucker, who is considered to have turned management into a scientific discipline. The concepts of the scientist directly state that there are goals, but there is an assessment of the degree of their achievement through key performance indicators.

Benefits of KPIs

home positive side KPI systems - the presence of a transparent mechanism for all employees of the company to evaluate the work and work of the enterprise as a whole. This allows the authorities to evaluate the performance of all subordinate structures in real time, predict how tasks will be solved and goals achieved. The next plus of KPI is that the management has a tool for adjusting the work of subordinates if the current results lag behind the planned ones.

If, for example, performance measurement in the first half of the year reveals that performance is not high enough, then workshops are held to identify the reasons and encourage employees to perform better after the next six months. Another positive side of KPI is the feedback between the specialist and the manager. The first will receive not just instructions and sometimes seemingly biased nit-picking, but well-founded comments, the second will improve performance by specifying errors and shortcomings in the work performed by the subordinate.

Cons of KPIs

The results of assessments within the framework of KPIs (performance indicators as such) can be interpreted not quite correctly, and this is the main drawback of this system. As a rule, the probability of occurrence of such a problem is the lower, the more attention is paid at the stage of formation of criteria for how to evaluate performance parameters. Another disadvantage of KPI is that companies will have to spend a lot of resources (usually calculated in time, labor and finance) to implement this system. We are talking, of course, about working on the key parameters of the effectiveness of the proper level of elaboration. There is a possibility that it will be necessary to carry out large-scale retraining of employees: specialists - with a view to changing tasks, and hence working conditions, while management will have to master new methods for assessing the work of subordinates. The firm may not be ready to give the team extra time to learn new things.

Subtleties of KPI implementation

The main task when implementing a KPI system (“from scratch”) is to prevent a negative attitude towards it from employees. Therefore, the management of the company needs to clearly convey the meaning and practical benefits of innovations to each of the subordinates, whose work is subject to subsequent evaluation for effectiveness. The best method here, according to some experts from the field of HR, is an individual presentation, an explanation to specialists in specific positions: KPIs - what are they and why implement this system in a company.

It will be a mistake to unconditionally impose efficiency parameters by order, but the necessary step is an appeal from the top officials of the company. If, for example, a line manager informs subordinates in his department about the imminent implementation of KPI, then this information should also be confirmed and CEO. The specialist must understand that the system of key performance parameters is not an invention of the boss, but an element of the strategic policy of the entire company.

Optimal timing of KPI implementation

There is an opinion among experts that KPI indicators, if we are talking about a system, should be implemented simultaneously at all levels of company management - from ordinary specialists to top managers. According to this point of view, the timing of the implementation of key performance indicators cannot be extended in time: the system starts working immediately. The only question is how to optimally choose the moment of its launch. There is a point of view that it is enough to notify employees about the start of KPI about three months in advance. This is enough for the company's staff to study the specifics of the future assessment of the effectiveness of their work.

There is also the thesis that for some time KPI can work in parallel with the previous payment system. Depending on the degree of liberalism of the authorities, the employee will be able to choose according to which scheme he will be paid. It is possible to fully motivate a person to work according to the new KPI through bonuses and bonuses, the conditions for obtaining which will be clearly spelled out in the key parameters.

Stages of creating a KPI system

Actually, as such, the introduction of KPI mechanisms is preceded by several stages of preparatory work. Firstly, this is the period associated with the formulation of strategic goals that are set for the company. As part of the same stage of work, the general concept is divided into tactical areas, the effectiveness of which is to be measured. Secondly, it is the development of key performance indicators, the definition of their essence. Thirdly, this is work on the distribution of official powers related to the implementation of the system, so that each person in charge asks a question like “KPIs - what are they?”

Thus, all indicators will be assigned to specific individuals (divisions) in the company. Fourth, current business processes may need to be adjusted (if the updated strategy requires it). Fifth, is the development new system creation of payroll formulas according to fresh criteria. After completing all of the above procedures, you can start the KPI system.

KPI Requirements

As mentioned above, KPIs are key performance indicators that are inextricably linked to the company's goals. The quality of targeting development is the main requirement for the KPI system. Goals can be formed according to different principles, but one of the most popular in the HR environment is the SMART concept. Means "specific" (specific), "measurable" (measurable), "achievable" (achievable), "related to the result" (relevant), "time-bound" (time-bound), and, as a result, giving worked out and quality KPIs.

Examples of goals that meet these criteria: "open so much (measurable) outlets(specific) in a city (relevant) in the first quarter (time-bound)”, or “sell so many air tickets to such and such a country in three weeks”. Each goal should be divided into tasks, which, in turn, are reduced to the level of personal KPIs (for employees or departments). The optimal number, according to some experts, is 6-8.

KPI automation

One of the factors for the successful implementation of KPIs is the technological infrastructure. Since key performance indicators are a set of rational indicators, a computer will do a very good job with them. There are many software solutions for managing KPIs. The possibilities available in such distributions are quite extensive. Firstly, it is a convenient presentation of information (in the form of graphs, analytics, documentation) about the processes associated with KPIs. What does it give? Mainly, the unity of data perception, reducing the likelihood of misinterpretation of numbers. Second, the collection and calculation of performance indicators. Thirdly, this is a multidimensional (with very large volumes of numbers) analysis, which will be difficult for a person without a program to perform. Fourth (if there is a network infrastructure), this is the exchange of information between individual employees and the establishment of channels feedback"boss-subordinate".