The real purpose of performance indicators: The goal of Performance Indicator is to identify if the adopted strategy, operation, and process, etc., is working toward the objective.
Selecting the right measure and measuring it right are both art and science. Choosing the right KPIs is crucial. The challenge is that people have their own take on performance indicators (PI). Generally speaking, performance indicators must be aligned with the corporate goals and objectives, they should also be directly relevant to the activities that businesses are attempting to manage.
Selecting the right measure and measuring it right are both art and science. Choosing the right KPIs is crucial. The challenge is that people have their own take on performance indicators (PI). Generally speaking, performance indicators must be aligned with the corporate goals and objectives, they should also be directly relevant to the activities that businesses are attempting to manage.
The real purpose of performance indicators: The goal of Performance Indicator is to identify if the adopted strategy, operation, and process, etc., is working toward the objective. Performance Indicators should be periodically reviewed and revised depending on what the firm’s strategy is and what they are targeting. Key Performance Indicators should be under constant review to determine if they actually provide the necessary insight into what is happening in order to make informed decisions. A true and meaningful KPI should last as long as the business strategy is set. KPIs that are concerned with long-term activities clearly should have a longer lifetime than short-term oriented KPIs. Otherwise, inaccurate KPIs are the result. Outcome related KPIs are as relevant as, even more relevant than process-related KPIs. Using process KPIs is necessary, however, it is not sufficient. KPIs should reflect both well-performing activities as well as those that need to improve. The real purpose of Performance Indicators is to provide business insight and monitor the business progress and performance. Being able to show the business benefits in hard facts such as measurement helps greatly.
Performance Indicators vs. Key Performance Indicators: Performance Indicators (PI) measure the business progress across a broad range of intended outcomes and are used at all levels of the organization. Key Performance Indicators can be a subset of PIs, or they can roll several PIs into one. They are high-level indicators that everyone in the organization can relate to. When implementing KPIs usage, it is important to ensure that they are aligned to the overall strategy and operations of the business, you select the critical few and the KPIs are a combination of leading, lagging, financial and non-financial indicators. Good Performance Indicators help you make better decisions to improve the business performance. As the saying is going, you can only manage what you measure, performance measurement is one of the most significant steps in the overall performance management.
Strategic KPIs vs. Operational KPIs: Business should be able o define and align operational KPIs to strategic KPIs for successful tracking of the effectiveness of strategic KPIs. It is imperative that you link lower level metrics with higher level strategic objectives. That’s what most of the strategy management methodologies are all about. The effective way to track the achievement of strategic goals is to cascade those down throughout the organization with the use of operational KPIs. This is particularly critical if you are to get employee understanding of what the strategic goals are and how their work fits into that bigger picture. It does mean that at the operation level, there should be some metrics that can be tied directly be achieving strategic goals so that every employee knows how their role fits in and can be freed up to do what they can to try to achieve the desired strategic outcomes.
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The "Performance Master" Book Introduction
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The "Performance Master" Quote Collection I
The "Performance Master" Quote Collection II
The "Performance Master" Quote Collection III
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