Employee KPIs (Key Performance Indicators) are used to measure the effectiveness of an employee in achieving key business goals. They are small and measurable values that are predetermined with a certain deadline. They provide a clear way to quantify an employee’s performance, helping align the employee activity with the company vision.
KPIs are crucial to finding out the strengths and weaknesses of an employee. It helps improve the individual performance and professional development of your employees. A business can foster accountability and increase productivity by setting and tracking proper KPIs.
What are the Types of Employee KPIs?
You can divide the KPIs into 5 different categories. Don’t get overwhelmed; we have prepared a complete list of different types of KPIs and what they stand for.
- Performance KPI: These KPIs are generally focused on achieving specific targets or outcomes for a short period of time. A good example of performance KPI is Sales KPI.
- Productivity KPI: As the name suggests, it is focused on the productivity of individual employees. It measures an employee’s output, like utilized work hours or completed tasks.
- Quality KPIs: These KPIs are designed to measure the quality of produced work. They include customer satisfaction scores, error rates, and more.
- Efficiency KPIs: These are the KPIs used to measure how well different resources like funds, time, or materials are used to produce desired outcomes. Commonly used efficiency KPIs are turnaround time and cost per acquisition.
- Behavioral KPIs: These KPIs are used to track the soft skills and behaviors that impact that individual’s performance or the people around them. For example, you can consider teamwork, communication, or adaptability as behavioral KPIs.
How to Choose the Right KPI for Employees?
You have to be careful while choosing KPIs for your employees. No matter how hard the employees work or how much you track KPIs, if you are running after the wrong KPI, it will result in nothing. You will just waste your time and efforts achieving the wrong goals.
So, the question arises, “How do you set the right KPIs for your employees?” It is a delicate process, but don’t worry. We have broken down the process into 4 simple factors to make it easy for you.
- Align with Business Goals: The KPIs should be a fragment of the company’s vision. They will be the guide to lead the business to its ultimate goal.
- Use SMART Criteria: SMART KPI stands for Specific, Measurable, Achievable, Relevant, and Time-bound KPIs. These are the characteristics that make KPIs the most efficient and effective.
- Customizable for Different Roles: It is obvious that different roles of a company need different targets and KPIs. So, make sure that your KPIs reflect the different and unique jobs for the employee according to their roles and positions. The KPIs for sales, marketing, customer service, and other departments should be unique.
- Balance Quantitative and Qualitative KPIs: You must maintain a balance between the target quality and quantity. If the target quantity is too high, the quality will drop, and similarly, if the target quality is high, then the quantity will fall. Therefore, set KPIs in a way that has enough quantity with good quality of work.
Overall, you have to be careful not to lose track of your final destination. Use SMART KPIs that align with your company visions and lead your business to the ultimate success.
What are the Best Practices for Setting Employee KPIs?
Just setting tons of KPIs out of the blue will not bring good results. You have to follow a strategic process and maintain some characteristics of the KPIs that make it effective and efficient. Here are some of the best practices for setting employee KPIs:
- Involve Employees in KPIs: Hold a proper discussion with the employees before you set their KPIs. You have to make sure that the employees understand their targets. Having a discussion will make them more engaging and feel invested in the process of achieving the goals.
- Set Clear and Measurable Targets: You have to ensure that the KPIs are specific and indicate a clear direction to what needs to be done to achieve them. Otherwise, it will create confusion, and the employee may lose track of the main purpose.
- Set Achievable KPIs that are Relevant: Set realistic KPIs that may be challenging but attainable. Setting unrealistic KPIs will demotivate the employees and push them further away from their target. So, set realistic and relevant KPIs for the employees to encourage them to work harder.
- Regularly Review and Adjust KPIs: You have to keep checking KPIs to make sure that they don’t lose track of the company vision. You need to change or adjust KPIs depending on market trends and strategies to keep them relevant and effective.
- Provide Continuous Support and Feedback: Offer regular feedback so that the employees can understand their contribution to your company. It will also help them to identify their weakness and encourage the development of their mindset. Also, provide them with proper resources so that they can work on their leggings and become a better employee.
Examples of Effective Employee KPIs
We have been talking about KPIs for a while now. There are so many dos and don’ts with complex strategic and technical terms. It can easily confuse you, and you might make a mess. To avoid such circumstances, we will look at some examples now. These simple and easy examples will clear any confusion and help you develop a proper understanding of KPIs.
As we mentioned earlier, KPIs should be relevant to the employees. So, we have divided the KPIs based on different departments.
Sales Team KPI
You can set some specific KPIs for the sales team to drive better results at the end of the period. Here are some of the most commonly used sales team KPIs:
- Sales Revenue
- Conversion Rate
- Average Deal Size
Marketing Team KPIs
Here are some KPIs you can set for your marketing team to be successful in marketing campaigns.
- Lead Generation
- Return on Marketing Investment (ROMI)
- Website Traffic Growth
Technical Team KPIs
Some of the most used KPIs for technical teams are:
- Bug Fix Rate
- System Uptime
- Deployment Frequency
Customer Service Representative KPIs
Some relevant KPIs for Customer Service Representatives are:
- Customer Satisfaction Score (CSAT)
- Response Time
- Troubleshoot Rate
What is the Best Tool to Manage Employee KPIs?
You can set KPIs manually, but must use a tool or software to track and evaluate KPIs. You can’t track all the KPIs of different teams and employees manually. Besides, analyzing the KPI results and making a report is on a whole other level of complexity. So, you better use reliable software to manage KPIs. Now, you may wonder, “What is the best tool to measure KPIs?”
It is easy to fall for the wrong software in the market because there are many options. But don’t be afraid; we are here to save you from this.
What is ProKPI?
To make KPI management easier, we recommend the best KPI management tool, ProKPI. It will help you assign, track, and evaluate strategic business objectives quickly and easily. ProKPI offers the following features:
- Set company vision
- Set KPIs based on department and employee roles
- Set KPIs for yourself
- Own KPIs are approved by higher authority
- You can set unlimited KPIs
- Set KPIs according to daily, weekly, monthly, or yearly deadlines.
- 24/7 customer support
- Not too expensive
That is not all; the interface of this software is very user-friendly and properly arranged. Research Gate states that the user experience is a crucial feature of any software. The admins and employees can adapt to this minimal yet effective software in a short time.
Another Key feature is that you can check a project’s update and report in graphs, pie charts, and curves. It helps you get a clear idea of the working status of the entire company at a glance. You can use this data to evaluate your employees and their progress easily. As a result, you can assign the KPI of any team based on their capability and progress and make data-driven decisions.
Bottom Line
In a nutshell, using KPIs is the key to ensuring continuous business improvement. But keep in mind your KPIs should be SMART. No matter what kind of business you run or your role, KPIs will ensure you contribute to your company’s future in the right way. So, start using KPIs with ProKPI and lead your business to the pinnacle of success.
FAQs
How often should I monitor employee KPIs?
You need to monitor employee KPIs on a regular basis. It will keep you posted about the current progress status of the targets and help you identify any issues. You can react fast and reduce the waste of time monitoring employee KPIs regularly.
What is SMART KPI?
SMART KPIs are designed to be specific, measurable, achievable, relevant, and time-limited. It provides companies with a framework to set realistic goals, track progress, and achieve success ultimately.
How does KPI help to achieve larger goals?
KPIs are small tasks that contribute to large success. You can maintain stable and consistent progress that leads your workflow to the achievement of larger goals. Without KPIs, you will easily lose track of your original goal and drift further away from it.