Top tips: setting key performance indicators
A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a business/organisation is, in achieving its key objectives.
Basics of Key Performance Indicators
Organisations use KPIs at multiple levels to evaluate their success at reaching targets. High level KPIs may focus on the overall performance of the business/organisation, while low level KPIs may focus on processes in departments such as sales, marketing, HR, support and others. KPIs may also be specific to projects.
Tips to ensure KPI’s are effective
- Start with the basics and understand what your business objectives are, and how you plan on achieving them, and who can act on this information.
- One of the most important, but often overlooked aspects of KPIs is that they are a form of communication. Succinct, clear and relevant information is much more likely to be absorbed and acted upon.
- A KPI is only as valuable as the action it inspires. Positive action should follow a review of KPI’s.
- Setting KPI’s is an iterative process that involves feedback from management and employees and includes benchmarking to sector and competitor KPIs.
Setting S.M.A.R.T. KPI’s
One way to evaluate the relevant of a performance indicator is to use the S.M.A.R.T. criteria, where the letters of the word S.M.A.R.T. are typically taken to stand for: Specific, Measurable, Attainable, Relevant and Time-bound.
Common Financial KPI’s
Common KPI’s for Hotels, Restaurants, Pubs and Bars
Common Website KPI’s
Common Social Media KPI’s
