KPIs or Key Performance Indicators are critical tools that help managers in their decision-making and employees along their path toward business success. Managers and team leaders are all about meeting targets and objectives—and this is only possible with effective performance management.
Remote working and mobile workforces is the new normal, exactly how do you measure team and individual performance to know whether or not your employees are meeting individual, team-level, and company-wide goals? The short answer: With a good performance management software solution.
It is not difficult to determine whether or not teams are working and how hard they are working and most organizations already have systems in place to measure employee performance. But the question remains: Are team members working on the right stuff? Do their accomplishments result in the right outcomes?
This is where Key Performance Indicators or KPIs come into play. KPIs help answers these important questions by allowing managers to quantify people’s performances and analyze them based on the individual as well as organizational goals.
A Key Performance Indicator is any quantifiable metric that can be used to reflect just how well an organization and its workforce are achieving their stated objectives and goals.
In essence, KPIs link general (and specific) organizational vision to the actions and performance of each individual employee. Ideally, KPIs should cascade from one level to another in the organizational pyramid, where your strategic vision goes on top, feeding right down to each succeeding level; namely, your strategy, objectives, CSFs (critical success factors), KPIs, and individual actions. Critical Success Factors derived from strategies and objectives are areas of organizational activity in which the entire organization must succeed and perform well in—and KPIs are the very means by which these can be measured.
When determining Key Performance Indicators within an organization, it is important to take into account appropriate activities for each individual area of business. This said, some KPIs are a lot harder to measure than others—especially when they don’t have concrete or direct standards like net profit, which can be used to measure the organization’s financial performance (i.e., getting the difference between total revenue and the company’s total expenses will easily tell you how the company is performing, financially).
For example, Performance Indicators like customer satisfaction are a lot trickier to measure and require carefully constructed tools like customer surveys, which must regularly be generated for customers in order to build intelligence on the matter. Once data is available, you still have to decide what kind of customer satisfaction score indicates or represents the goal or benchmark that you wish to achieve.
When determining Key Performance Indicators for an organization—whether for office-based or remote workforces—it is important to remember these SMART criteria:
- Specific – KPIs have to be clear and unambiguous. Answer this question: What will this KPI measure and why is it important?
- Measurable – Key performance indicators must be quantifiable to a clearly defined standard.
- Achievable – Be realistic when setting performance indicators that can be achieved and your team can deliver on.
- Relevant – Your key performance indicators must measure things that matter and those that work to improve the individual, team, and organizational performance.
- Time-bound – Your performance indicators must also be achievable within a reasonable, agreed-upon time frame.
The question remains: What are some Key Performance Indicators that make effective benchmarks for performance management in work from home or remote workforce settings? Below are some examples to help you get started based on critical business areas:
Top Work from Home Performance Metrics for Marketing Departments:
- Website Sessions
- Lead Conversion Rate
- New Marketing Qualified Leads
- ROMI (Return On Marketing Investment); and
- CAC (Customer Acquisition Cost)
Top Work from Home Performance Metrics for Sales Departments:
- Call Volume
- Sales per Representative
- Revenue per Sales Representative
- Lead-Win Conversion Rate; and
- Average Selling Price
Top Work from Home Performance Metrics for Support Departments:
- Call Volume
- First Response Time
- Average Speed to Answer
- Customer Issues; and
- Customer Service Satisfaction
Top Work from Home Performance Metrics for HR Departments:
- Per Employee Profit
- Per Employee Revenue
- Per Employee Expenses
- Employee Turnover Rate; and
- Payroll-Revenue Ratio
When deciding on Key Performance Indicators, it is important to have the means to capture data that you need. A reliable system must be in place to help you capture and analyze data and project measurements on a regular basis.
Real-time tracking of KPIs is crucial for effective performance management. This is where performance management software systems like AssessTEAM offer a great advantage. AssessTEAM provides managers a means to track employee performance comprehensively, helping them dig deep into key performance indicators and use data to lead employees to greater self-improvement and in-turn business success.