KPIs - what is it? KPI - key performance indicators. Development of KPI

Systems for assessing the effectiveness of staff, based on KPI, are becoming increasingly popular in Russia. The main advantages of such mechanisms are the rational reflection of the activities of companies.

KPI: what is it

KPI (KPIs) is the English abbreviation for "key performance indicators", in Russian it is referred to as KPI - key indicators (sometimes - parameters) of efficiency. But in the original overseas sound is used as the norm. KPI is a system that allows you to evaluate the effectiveness of the company's employees 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 target management system is also formed. This is an important factor: if there are no signs of targeting performance indicators , then there is no need to apply "key indicators" to anything. Management by objectives and KPI, thus, are two interrelated phenomena. The first involves primarily forecasting the results of the work, as well as planning how these results will be achieved.

Who invented KPI?

There is no unambiguous answer to this question, but one can trace how the world management went to understand KPIs, what it is and what is useful. In the late 19th and early 20th century sociologist Max Weber determined that there are two ways of assessing the work of employees: the so-called "sultan" and meritocratic. On the first - the chief ("Sultan") at his own discretion assessed how well a person copes with his duties. The rational beginning here plays a secondary role, the main thing is a purely emotional perception of the work of a subordinate.

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

Pros of KPI

The main positive side of the KPI system is the availability of a mechanism for evaluating labor and the work of the enterprise as a whole transparent for all employees of the company. This allows the authorities to assess the performance of all subordinate structures in real time, to predict how tasks will be accomplished and the goal will be achieved. The next plus of KPI is that the management team has a tool for correcting the work of subordinates, if the current results are lagging behind the planned ones.

If, for example, the activity measurement in the first half of the year reveals that such performance parameters are not high enough, workshops are held to identify the reasons and encourage staff to do better work after the next six months. Another positive side of KPI is the feedback between the specialist and the supervisor. The first will receive not just manuals and sometimes nonsensical quibbles, but well-grounded remarks, the second - improving performance by specifying errors and shortcomings in the work performed by a subordinate.

Cons KPI

Results of assessments within the framework of KPI (indicators of efficiency per se) can not be interpreted correctly, and this is the main disadvantage of this system. Typically, the probability of such a problem is lower, the higher the attention will be to the stage of forming criteria for how to evaluate the parameters of efficiency. Another disadvantage of KPI - the company, in order to implement this system, will have to spend a lot of resources (estimated, as a rule, in time, labor and finances). It is, of course, about working on key parameters of the effectiveness of the proper level of elaboration. There is a possibility that it will be necessary to conduct large-scale retraining of employees: specialists - for changes in tasks, and hence for working conditions, management also has to learn new methods of assessing the work of subordinates. The firm may not be ready to give the team extra time to learn new things.

The intricacies of implementing KPI

The main task when implementing the KPI system (from scratch) is not to allow negative attitude to it from employees. Therefore, the management of the firm needs to intelligibly communicate the meaning and practical use of innovations to each of the subordinates, whose work is subject to subsequent evaluation for effectiveness. The best methodology here, according to some experts from the field of HR - individual presentation, explanation to specialists on specific positions: KPIs - what is it and why to introduce this system in the company.

The mistake will be unconditional implantation of performance parameters in an orderly manner, however, the necessary step is the treatment by the first persons of the company. If, for example, the line manager reports to subordinates in his division about the imminent introduction of KPI, then this information must be confirmed also by the CEO. The specialist should understand that the system of key performance parameters is not an invention of the boss, but an element of the strategic policy of the whole firm.

The optimal timing for the implementation of KPI

Among experts, it is believed that KPI indicators, if it is a question of the 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 introduction of key performance parameters can not be stretched over time: the system starts working immediately. The only question is how to optimally choose the time of its launch. There is a point of view that it's enough to notify employees about the fact of KPI start in about three months. This is enough to ensure that the staff of the company has studied the specifics of the future evaluation of the effectiveness of their work.

Also there is the thesis that for a while KPI can work in parallel with the previous system of payment. Depending on the degree of liberalism of the bosses, the employee will be able to choose himself, according to which scheme he will receive a salary. It is possible to motivate a person to work on a new KPI due to bonuses and bonuses, the terms of which will be clearly spelled out in key parameters.

Stages of creating a KPI system

Actually, as such the introduction of mechanisms KPI is preceded by several stages of preparatory work. Firstly, this is the period associated with the formulation of strategic goals that are put before the company. Within the same phase 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, it is work on the distribution of official powers associated with the implementation of the system, so that each responsible asked a question such as "KPIs - what is this?"

Thus, all indicators will be assigned to specific persons (units) in the firm. Fourth, you may need to adjust the current business processes (if required by the updated strategy). Fifth, it is the development of a new system of employee motivation, the creation of formulas for the calculation of wages on the basis of fresh criteria. After all these procedures are performed, you can start the KPI system.

Requirements for KPI

As mentioned above, KPIs are key performance indicators that are inseparably linked to the company's goals. The quality of targeting 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", "measurable", "achievable", "relevant to the result", "time-bound", and, as a result, giving the worked And quality KPIs.

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

Automation of KPI

One of the factors in the successful implementation of KPI is the technological infrastructure. Since the key performance parameters are a set of rational indicators, the computer will work very well with them. There are many software solutions for managing KPI. The features available in such distributions are quite extensive. First, it is a convenient presentation of information (in the form of graphs, analytics, documentation) about the processes associated with KPIs. What does this give? Mainly, the unity of the perception of data, the reduction in the probability of misinterpretation of numbers. Secondly, it is the automation of collection and calculation of performance indicators. Thirdly, it is a multidimensional (with very large amounts of figures) analysis, which a person without a program will be difficult to perform. Fourthly (in the presence of network infrastructure), this is the exchange of information between individual employees and the establishment of feedback channels "boss-subordinate."