For many modern businesses, regardless of size, it’s important to monitor employee activity on a weekly, monthly, and annual basis. That’s where a KPI helps.
It can work very well as part of your ongoing approach to human resources.
You can also use it to set targets for your business, such as with quarterly profits, staff retention rates, or charitable contributions.
A popular way to manage those goals is through KPIs—they set realistic targets you can aim for. And they help your business to easily understand whether you’re meeting them.
In this guide, we explore how to set your business objectives and how the right targets can improve your understanding of annual achievements.
What are key performance indicators?
What is a KPI? It’s a key performance indicator. Basically, it helps to evaluate the performance of employees (such as executives and managers) and your business.
So, a KPI definition is that it’s performance measurement for your business.
The approach is effective as it displays how you’re meeting objectives as each week passes. Although you can review key performance indicators as and when you need to. Such as:
It depends on your business requirements. For example, if you’re in the hospitality or catering industries it may prove useful to check daily targets.
Whereas in digital marketing, or B2B environments, weekly, monthly, or even longer checks may suffice.
However, you can mix and match KPI targets and how often you review them.
For example, you can have weekly meetings to review targets for the last five working days. And complement that with a six-monthly review to measure employee and business objectives.
So as you can see, it’s really up to you how to approach it—that’s one of the many uses of KPIs, the adaptability to your requirements.
HR KPI examples
So, what business KPI should you aim for? Well, key performance indicators are much more varied than weekly employee performance.
You can choose a wide range of targets to focus on, each of which can provide you with essential information about your business.
You can break these down by department, too. So below is a list of the types of KPIs you can focus on across each area of your business. Here are five key performance indicators:
- Sales: Number of new contracts per period, pound value for new contracts, qualified leads in sales funnel, time spent per lead.
- Financial: Annual revenue growth, net and gross profit margins, operational cash flow.
- Customers: Number of new customers retained, the percentage of market share, customer support resolution time.
- Operational: Order fulfilment, time to market, satisfaction rating, churn rate.
- Marketing: Monthly website traffic, SEO keyword rankings, qualified leads, PPC performance, conversion rates, lead generation targets.
You can, of course, track any other metrics you think are worthwhile. Again, KPI for employees are adaptable to your business—you can choose to monitor whatever you want.
Key performance indicators for managers
One of the most common examples of KPIs is with line managers monitoring the activities of their executives.
The information they gather is then sent higher up, which forms the basis of a business-wide performance perspective.
Depending on the type of role they have, these will vary. But common KPI for employee performance include:
- Meeting weekly targets for their role.
- Meeting quality standards for their work.
- Consistency of work.
- Sense of initiative.
- Creativity and innovation.
- Attention to detail.
- Time management.
- Sickness record.
- Any overtime they complete.
Managers will also be subject to KPIs. And their targets are usually an advancement on the above, to take in the higher workload they have. As well as the extra responsibilities.
How to set KPI for staff
You shouldn’t overcomplicate your performance metrics. Aim for simplicity—KPIs should lead to answers or decisions.
To set them for your staff, you can use a common business framework such as the SMART criteria. This is:
With that in mind, you can then consider what everyone in your organisation is responsible for. And then you can set KPI for employees by:
- Checking their job description for a basic overview of KPI ideas.
- Identifying half a dozen or so main areas of responsibility.
- Considering initiatives and projects for the year ahead.
- Documenting your KPIs and set them in a template.
You can then discuss your targets with employees and new starters, so they’re aware of what they must be aiming towards each working week.
Individual KPI template
Above is a sample KPI template—you can make yours as complex as you like, depending on what your requirements are.
But it’s really a very simple process—create the table and your points and then you can keep that on record for a future date.
It’s a good idea to create a document for you to track your monthly targets. This can be on a simple sheet of paper, or using computer software.
For the template, you can create a form that covers the essential KPIs each employee is aiming for in their role.
You can use a business-wide template if you have 10+ employees, as that can simplify the process of managing your targets. The form can document:
- The KPIs you’re aiming for.
- Business and employee objectives.
- Whether they meet these on a daily, weekly, and monthly basis.
Many businesses also have a six-monthly review to monitor the achievements of employees. This can ascertain whether they’re meeting the KPIs you, as an employer, are setting them.
This is where a KPI template is particularly useful, as it helps you to keep a record of individual achievements.
For health & safety monitoring
For your health & safety requirements, you can set KPIs to ensure you manage your legal expectations.
This is particularly important—you should aim to keep high standards. Doing so limits the dangers your employees, clients, customers, or visitors face.
Some of the common health & safety metrics to track include:
- The number of reported accidents and incidents.
- Reporting on any near misses.
- Your safety audits and risk assessments.
- Corrective actions you undertake.
- The overall wellbeing of your workforce.
- The amount of expenditure you require for the above.
Need our help?
If you’d like assistance setting up performance management metrics for your business, get in touch. We’ll talk you through the right strategy for your business: 1890 252 923.