Implementing KPIs in the new year

Peninsula Team

December 12 2014

Key Performance Indicators (KPIs) are a measurable way of assessing your employee’s performance. If you are introducing these in to existing employment contracts then agreement from staff will need to be sought otherwise they could argue that their terms and conditions have been changed unilaterally, without their agreement.

Before introducing the topic of KPIs to staff you should ensure that you have decided upon a set of targets which are achievable, measurable and realistic. Trying to introduce targets which are unachievable and un-measureable is likely to produce the opposite result to what you are aiming for; it could result in employees not agreeing to work under them as they know they cannot be achieved.

You should talk to your employees and tell them what you are planning to introduce. You can do this in writing, by letter or email, or even verbally and personally talk to them about your plans. You should consult with staff and let them discuss the introduction of KPIs with you. If you let the employees know the reasons for introducing these then they could come up with other suitable suggestions or methods that you haven’t considered before. If alternatives are put forward by the employees then you should take these in to consideration during the introduction process.

You should make your employees aware that, even though you are introducing set KPIs, they will be reviewed and updated constantly. Putting targets in to practice may apply at certain points of the year but may become invalid or ineffective after a set time, for example, if you implement sales targets KPIs then these might be affected during slow trade periods.

When introducing KPIs, you should put thought in to how you will take action if employees do not achieve them. You should consider each employee’s circumstances for not reaching their targets individually; their reasons might differ and if you apply the same principles to everyone this could be deemed to be unfair.

If you need any clarification on this issue then contact the Peninsula Advice Service on 0844 892 2772.

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