Many companies recognise the value of KPIs (key performance indicators), but not everyone has implemented SMART (Specific, Measurable, Achievable, Relevant and Time-Bound) KPIs for their employees.
SMART KPIs provide clarity in terms of 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. By being specific, expectations are clearly defined and there is a lower risk of misinterpretation by either the employee or manager.
- Create KPIs on the number of phone calls that must be made per day or set targets around the number of products that must be sold to new customers.
Define what’s being measured. Use a numerical value or percentage to define an expected increase 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 goals are trackable, while at the same time making sure your employees are working toward their full potential.
ELMO Software (ASX:ELO) 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.