Briefing on KPI

1. Briefing on KPI Presented by Ramlah Hamad HRDF Certified Trainer MBA

2. What is a Key Performance Indicator (KPI)? • A key performance indicator is a financial and non-financial measure used to help an organization measure progress towards a stated organizational goal or objective.

3. The benefits of measuring Key Performance Indicators • Can allow management to see the company or department performance in one place. • A team can work together to a common set of measurable goals. • It can be a very quick way of seeing the actual performance of a goal or strategic objective • Decisions can be made much quicker when there are accurate and visible measures to back them up.

4. KPI vs CSF • Key Performance Indicators should not be confused with a Critical Success Factors (CSFs). • CSFs are elements that are vital for a given strategy to be successful • KPIs are measures that quantify objectives and enable the measurement of strategic performance

5. A Critical Success Factors (CSF) would be something that needs to be in place to achieve that objective; for example, the launch of a new product or service. For example: • KPI = Number of new customers
CSF = Installation of a call centre for providing managing the customers

6. Critical Success Factors (CSF) • Factors
A plan should be designed and implemented in a way that considers an environment for growth and profits as well as takes into consideration the following typical Critical Success Factors: • Money: Positive cash flow, revenue growth, access to finance and profit margins • The future: Acquiring new customers and/or distributors • Customer satisfaction: How happy are they? • Quality: How good is your organizations products and service?

7. Critical Success Factors (CSF)-cont’d • Product or service development: What’s new that will increase business with existing customers and attract new ones? • Intellectual Capital: Increasing what the organization knows that is profitable • Strategic Relationships: New sources of business, products and revenue • Employee Attraction and retention: Your organizations ability to do extend your reach • Sustainability: Your organizations ability to keep it all going

8. Setting KPIs & CSFs • While there may be many Critical Success Factors in an organization at any one time, the chances are that only one or two in a given department or division. • The number of Key Performance Indicators however may be prolific throughout an organization The reality is that the most successful organizations limit KPIs to a handful. • To be effective any part of an organization should have between 5 and 8 KPIs.

9. Visual Key Performance Indicators (KPIs) • A Key Performance Indicator (KPI) can be effectively used as a visual cue that communicates the amount of progress made toward a goal. The use of dashboards, intranet summary pages and graphics on notice boards. • By using graphical representations of KPIs, you can easily visualize answers to the following types of questions: • What are we ahead or behind on? • How far ahead or behind are we? • What is the minimum we have achieved to date?

10. Example Key Performance Indicators (KPIs) • Typical departmental or organizational key performance indicator or measure include: • Number of active customers • Number of new customers • Customer churn • Total revenues

11. Example HR KPIs • Percentage of screened newly recruited employees • Percentage of employees receiving regular performance reviews • Average response time for routine HR inquiries • Percentage of new employee retention • Job offer acceptance rate • Average Number of Interviews from Submitted applications/ CV’s • Percentage of vacancies filled within x days