We answer the most frequently asked questions regarding the implementation of KPIs.
What types of KPIs exist?
KPI indicators are divided into two main categories:
Performance KPI (Output);
KPI of the result (Outcome).
The first indicators are expressed in numbers. For example, this includes the number of launched marketing campaigns, placed ads, and completed operations.
Result indicators characterize netherlands email list the effect of the activities carried out on the business. These include an increase in conversion to sales, the share of engaged leads in a week, and a decrease in the outflow of current customers.
When analyzing, put the results indicators first. They give an idea of the quality of the work done. You can periodically launch new advertising campaigns, but if they are not sufficiently developed, you should not expect to increase sales.
What formula is used to calculate an employee's KPI?
Performance indicators directly affect the size of earnings, so the staff strives to work with greater efficiency. The difference between planned indicators and actual results is characterized using the KPI index. To receive a bonus, employees must show KPI = 100%, i.e. fulfill the plan in full.
The KPI calculation is carried out as follows:
KPI index = ((Actual - Base) / (Norm - Base)) x 100%
Here:
Base is the minimum possible result.
Norm is the planned result.
The fact is the achieved result.
The goal is the ideal indicator of the result.
Weight is the degree of importance.
In simplified form, the formula looks like this:
KPI Index = KPI Weight x Fact / Goal
Which companies are suitable for KPI implementation?
Before implementing KPI, make sure that the company's activities are well-established. It is not recommended to introduce KPI immediately after launch, since it is necessary to adjust the processes first. Moreover, in small companies, employees are already set up for productive work, can communicate directly with management, clearly imagine their successes and feel their importance to the company.
Any implementation should be accompanied by a thorough study of the current situation. Try different options for organizing activities, mechanisms for tracking and analyzing results. Do not ignore the identified shortcomings at each stage. Proceed from the specifics of your particular company, accept any arguments, remember external factors, strive to give the most reasonable assessment of probable risks and determine the course of action in case of deviation from the plan.