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Practical Tips to Help You Develop Effective SMART KPI

Practical Tips to Help You Develop Effective SMART KPI

While some businesses utilise Key Performance Indicator (KPI), but not all of them implement SMART KPIs for their workforce. SMART stands for Specific, Measurable, Achievable, Relevant, and Time-Bound.

SMART KPIs provide clarity in performance expectations and progress. Ultimately, they enable your employees to be successful and your business to flourish.


The more specific the KPI, the easier it will be to track. Being specific clearly defines expectations and reduces the risk of confusion by either the employee or manager.


Customer service set goals for the amount of phone calls or products sold to new customers.


Define what’s being measured. Use a numerical value or percentage to define an expected increase, measure performance or reduction in a particular activity.


100% of new employees complete induction training within 1 month of commencing employment or respond to all external enquiries within 24 hours of being received.


A SMART KPI should motivate your employee to work hard to attain it, but also needs to be achievable.


    75% customer retention month on month or provide quotes to customers within an hour of request.


Every KPI needs to align with your business goals, both short and long term. As a key performance indicator, it should be crucial to achieving your goal.


    Customer satisfaction ratings stay above 80% or achieve a certain percentage increase of market share by end of the year.


Having a set time frame for KPIs to be completed helps focus the employees to complete the goal. It also makes it easier to track progress and outcomes of the set goals.


    Complete a required certification by the end of the week or increase the number of qualified leads by 25% by the end of the quarter.

By using SMART KPIs to track performance, you can ensure that the efforts to reach your business strategic goals are trackable, while at the same time making sure your employees are working toward their full potential.

Examples of SMART KPIs for employees

Employee KPIs are essential for businesses as they align your employees’ performance with your organisational goals. Employee KPIs also play a crucial role in ensuring employee satisfaction and reducing employee turnover. Here are some smart KPI examples:

  1. Sales per Employee: This metric measures how much revenue each employee generates for your company.
  2. Customer Satisfaction: This metric measures how satisfied customers are with your company’s products or services.
  3. Employee Turnover Rate: This metric measures how many employees leave your company over a given period.
  4. Attendance Rate: This metric measures how often employees appear for work.
  5. Quality of Work: This metric measures how well employees perform their job duties.
  6. Time Management: This metric measures how well employees manage their time.
  7. Teamwork: This metric measures how well employees work together as a team.

Boosting KPI development with performance management software

Performance management software aids in the collection, organisation, and analysis of operational data. As such, it provides a reliable toolkit for creating KPIs that are accurate, relevant, and tactically actionable.

Fostering Informed Decisions

Modern performance management solutions come ingrained with analytics capabilities. These systems offer real-time insights into numerous KPIs, including training effectiveness, employee engagement, and absenteeism rates, thereby offering a broad illustration of the overall performance of an organisation.

By tapping into the data and patterns provided by performance management software:

  • You can proactively pinpoint potential issues and strategic solutions
  • Monitor and boost employee productivity by uncovering potential areas for further training or team-building
  • Automate data collection, mitigating chances of human-induced errors
  • Provide real-time feedback for immediate intervention and corrections

Utilising performance management software can be a revolutionary step in building and managing effective KPIs. As your business embarks on this journey, it can look forward to clearer target tracking, enhanced strategic alignment, and ultimately, enduring success.

ELMO Software  is a cloud-based solution that helps thousands of organisations across Australia, New Zealand and the United Kingdom to effectively manage their people, process and pay. ELMO solutions span the entire employee lifecycle from ‘hire to retire’. They can be used together or stand-alone, and are configurable according to an organisation’s unique processes and workflows. Automate and streamline your operations to reduce costs, increase efficiency and bolster productivity. For further information, contact us.