Key performance indicator

Topics: Management, Customer, Measure Pages: 1 (301 words) Published: November 6, 2014

Key Performance Indicator (KPI) helps an organization to define and measure progress towards the organizational goals. Most of the business has its own key performance indicator that is the percentage of income that comes from return customers. For achieving success in an organization key performance indicators are very important. Outstanding customer service, employee satisfaction etc are the characteristics of the company and these factors are necessary part of any business.KPIs are mainly used for measuring, monitoring and managing performance and they allow employers or employees to foresee what needs to be done to improve their organization. KPIs are a significant type of business sagacity. At the point when controlled by an association, they can instruct each part of the organization concerning creating a solid group methodology to business.KPIs are difficult to set up and manage. One of the most major problems that most of the organizations face with KPIs is that the Key performance indicators are never understood by the workforce. The impact is that workers strive to accomplish objectives for which they don't have any setting or importance. Without setting, representatives don't have the foggiest idea "Why?" they have to accomplish their KPI's and their work exertion is regularly misled or misaligned. At the execution audit representatives think they have done amazing work yet their administrator provides for them a low evaluating at their yearly evaluation. The solution for this problem is managers should help the employees to understand the meaning of their KPIs through workshops conducted by the organization. Key Performance Indicators are used in four main areas:

1) Revenue Improvement
2) Cost Reduction
3) Process cycle-time improvement
4) Increased customer satisfaction.
When setting an objective it is very important to ensure that the objectives are specific, measurable, achievable and realistic and time specific or SMART for short.
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