What is KPI?
Behind the acronym stands Key Performance Indicator. It helps align external and internal metrics with business goals and assigns measurable value to an organization’s efficiency. When well-defined, it aids in achieving the company’s mission and objectives.
All well and good, but..
When a company defines its own performance indicators, it wants to do everything to stay ahead of competitors. However, often on the altar of short-term results, the well-being of employees is sacrificed. This leads to a toxic environment, decreasing productivity, and ultimately, high turnover.
But if KPI is essential for a company’s operation, why does it carry so many risks?
The solution lies partly in exclusivity: if we cling desperately to metrics but ignore employees’ needs, such as work-life balance, development, and mental health, they will have no choice but to change jobs.
On the other hand, there is a poorly defined KPI: an unattainable goal leads to burnout and declining performance because the sense of accomplishment never arrives, efforts go unrecognized, and rightfully so, it demoralizes and exhausts colleagues.
In contrast, if we set realistic and achievable goals, we can provide feedback, recognition, and development opportunities to employees. Clearly communicated KPIs align employees with the organization’s vision, while helping us recognize and acknowledge work in a timely manner, celebrating successes together, and providing space for both personal and professional development.
How can we help?
Unfortunately, we often encounter performance indicators determined without consulting experts, based on hearsay information and incomplete images of competitors. It is crucial to realistically assess a company’s market environment, situation, and opportunities, as well as the trends and factors that may affect employee performance in a given period. Setting unattainable goals goes against business interests, as it can cost unnecessary financial and human resources. A good KPI also considers colleagues’ professional opinions, and an agency can assist in assessing the company’s situation, goal-setting, and their realization.