Attention! Released for working with performance indicators (KPIs) and comprehensive data analysis new product"Business Analytics and KPI"

A new product for monitoring indicators from our developers - the program

The program allows you to consolidate information from various databases, email. mail, Internet metrics and analyze in a single center.

Based on consolidated data, it is possible to construct KPI indicators, monitor their boundaries, evaluate the effectiveness of management objects and other possibilities.

For users of the EDMS “Corporate Document Flow” there is a 35% discount

Key Performance Indicators or Key Performance Indicators is an assessment system for determining the achievement of the operational and strategic goals of an enterprise. KPI helps a company evaluate its current state and increase the efficiency of implementing your own development strategy.

Very often the technique KPI used to evaluate and control the activities and activity of enterprise employees. In Russia and the CIS countries, the term “Key Performance Indicators” is often used as a translation from the English term “Key Performance Indicator” (KPI). However, this translation cannot be considered sufficiently accurate.

If the translation of the word “key” as key (essential for achieving the goal) and the word “indicator” as an indicator (indicator) can be considered quite accurate, then difficulties arise with the translation of the word “perfomance”. According to the ISO 9000:2008 standard, the word “performance” can be divided into two terms – efficiency and effectiveness. According to the standard, effectiveness means the degree to which planned results are achieved and the ability to focus on results. Efficiency, according to the standard, means the relationship between the result and the costs (monetary, quantitative, time, etc.) to achieve it. Taking into account the fact that performance combines both effectiveness and efficiency, KPI can be more accurately translated as “Key Performance Indicators”, since the result also includes the costs of obtaining it.

KPIs are an excellent tool for measuring the extent to which certain goals are being achieved. In the real activities of the enterprise, it is necessary to use only those indicators that are related to the goals of the enterprise.

Today, enterprise goal management or enterprise goal management is one of the foundations modern concepts enterprise management. This concept provides the ability to foresee the results of activities and plan ways to achieve them.

The concept of management by objectives began its development with the work of Peter Drucker in the 20th century. According to his works, managers should avoid focusing too much on solving daily routine tasks; instead, they should focus on achieving the goals set for the enterprise (department). Today, the KPI system includes this concept, supplemented by other modern techniques and automated software tools.

According to various estimates, today enterprises have significant problems with setting the right goals and systems for evaluating results. According to surveys of US company managers, it was found that more than 60% of managers are dissatisfied with the system for assessing the performance of the enterprise. In Russia, dissatisfaction is even greater - more than 80%.

KPI and the employee motivation system of an enterprise are very closely related things; with the help of KPI, you can prepare and implement a highly effective incentive system for enterprise personnel.

There are many more key indicators. The set of indicators depends on the area of ​​their application; they are often used to evaluate the results of the work of enterprise managers.

Key indicators of the enterprise can be divided into the following types:

• Lagging KPIs - show the results of the enterprise after the end of the period
• Leading KPIs - allow you to quickly manage the situation within a given period to achieve specified results after its expiration

Financial performance is usually determined by lagging KPIs. Despite the fact that financial indicators are used by the owners of the enterprise to assess the ability of the enterprise to generate cash flows, financial indicators, due to the fact that they are lagging, cannot show the current efficiency of departments and the enterprise as a whole.

Leading (operational) KPIs tell about the current activities of the enterprise. These indicators can often provide indirect information about planned cash flows. In addition, when configured appropriately, they provide an assessment of the quality of the enterprise's business processes, the quality of manufactured products and customer satisfaction.

A set of enterprise KPIs is part of the system balanced scorecards, which defines cause-and-effect relationships between indicators and goals. Such connections make it possible to see patterns and factors of mutual influence of the results of one process on another.

KPI system development

When developing a system of key indicators, several stages can be distinguished:

• Pre-design work. Such work usually includes the creation project team and conducting pre-project survey. It is also important at this stage to obtain the approval and support of volume managers.
• Development of KPI methodology. At this stage, the optimization of the organization takes place. enterprise structures, development of methodology and a set of indicators, development of management mechanisms based on KPI, preparation of a set of documentation.
• Preparation software For KPI management. Development in progress terms of reference to make changes to the software. Direct programming of the system, user training and pilot operation of the system. Example of a 1C-based program for KPI
• Completion of the project. At the final stage, the KPI system (both methodology and software) is put into commercial operation.

• Explaining to staff the benefits of using KPIs
• Determining strategic indicators for the entire company
• Development of mechanisms for operational monitoring of indicators
• Need for further continuous improvement a set of KPIs to support the development of the organization.

Rules and principles for implementing KPIs

Exists various estimates necessity and sufficiency of the number of key performance parameters. Norton and Coplan at one time suggested using no more than 20 KPIs.
Fraser and Hope recommend using no more than 10.

The most successful of existing practice is to use the “10/80/10” rule.

This rule means that an enterprise must use about 10 key results-oriented indicators, about 80 indicators related to operational (for example, production) activities and about 10 key performance indicators.

Very important in implementation of KPIs is the principle of controllability and controllability. This principle states that the department or individual employee responsible for the result of an indicator should be allocated all resources to manage it, and the result should be measurable and controllable (including by them).

We can highlight other principles for constructing a KPI system:

• The principle of partnership - to successfully increase efficiency, it is necessary to achieve partnership between all interested parties of the company. The partnership must begin with the construction of the system and continue throughout its operation.
• The principle of transferring efforts to the main directions - increasing efficiency may require a significant expansion of the powers of certain employees of the enterprise. These are often frontline employees. They may also need upskilling, training and inclusion in the development of KPIs relevant to their operations. It is also necessary to improve communication between different departments and employees.
• The principle of integrated performance measurement, reporting and performance improvement. Created in-house should encourage employees to make responsible and specific decisions. It is also necessary to provide employees with all the reporting they need in their work.
• The principle of aligning operational performance with strategy. All indicators must be aimed at achieving the stated goals of the enterprise. It is necessary to constantly analyze and optimize key indicators. The work of the enterprise should not contain indicators that are not consistent with the strategic goals of the enterprise.

Application of these principles will allow you to build an effective enterprise management mechanism.

KPI - Key Performance Indicator. KPIs are key performance indicators of a company.

Why are they key? Because the company's management has determined that these indicators are vital to achieving the company's specific goals.

For each specific company key indicators will be different. If, for example, a company is just entering the market, then one of the main KPIs may be sales volume, market share or the number of new customers.

However, margin indicators at this stage of the company's development may not be as important as at stages of later development of the company. Let's look at KPIs using examples of the work of a sales manager.

What is kpi in simple words

Let's look at what KPI is using the example of the work of a sales manager. Let's assume that in the sales manager's motivation system there is only one point on which his income depends. Let this point be sales volume. What will the manager do to fulfill the sales plan? He will perform it based on the following points:

1. Sell ​​what sells itself.
2. Sell ​​what you have in stock.
3. Sell ​​what you can sell quickly and a lot.
4. Sell ​​to the largest clients.
5. Weed out from incoming requests those whose customers are ready to buy right now.

In other words, the manager will not think about tomorrow. His task is to sell now. He won't think about:

1. That the company has a plan to sell the entire range of goods, for which it will receive a discount or other preferences.
2. That the company becomes potentially unstable due to the fact that 90% of all sales go through 1-2 clients.
3. That the company pays money for incoming calls, of which the manager only works on hot calls and rejects others.
4. That custom-made goods can bring greater profits.

In other words, the manager fulfills the sales plan, but in the long term this can lead to disastrous consequences for the company.

KPI for sales manager

Observing this, management comes to the conclusion that paying only for sales volume is wrong. Management understands that it is necessary for the manager not only to fulfill the sales plan, but to do it in the manner necessary for the company.

That is, first a strategy is born. For example, to become number 1 in sales of product A. Then goals are born that need to be achieved in order to become number 1, for example:

1. Maintain warehouse volume for a specific supplier.
2. Maintain a certain range of stock.
3. Attract certain partners who can sell all this.
4. Attract a certain amount of funding.
5. Hire managers to sell these products or distribute this work among existing managers.

Points 1 -5 will be the same KPIs.

KPI for sales manager calculation example

For example, if previously the manager’s income formula looked like:

Income = (% * sales volume), then now:

Income = (% *sales volume)*0.8 + (KPI 1 fact/KPI 1 plan)*((% *sales volume)*0.2.

In the new formula, 20% of the manager’s income will depend on the implementation of KPI 1, which, for example, can be formulated as attracting 10 new partners a certain type goods.

At the same time, if the manager sells the old-fashioned way, he will lose 20% of his usual income. To get as much as before, he will need to make additional efforts in finding new partners.

Ratios and KPIs themselves can be calculated depending on the situation.

Typically, such a motivation system uses 1-3 KPIs with their own coefficients.

Next comes the process of monitoring how these KPIs work towards the set goal. If the goal is approaching, then you can leave these KPIs as they are. If the goal is not approaching, then the KPIs themselves need to be changed.

KPIs for sales manager examples

KPI for sales volumes.

Sales volumes, shipments, sales, turnover, sales are synonyms for various types business. Sales volumes are presented to managers as a specific plan figure for a certain period of time. Usually this is a month, quarter, year.

Examples of KPIs for sales volume.

You need to achieve a sales level of 1,000,000 rubles to your partners for the quarter.

Sales may be expressed as a percentage of the previous period or the same period last year. Either as a percentage or in physical terms.

Examples of sales volume KPIs relative to other periods.

You need to achieve a 15% increase in sales in the 3rd quarter of this year compared to the level of sales in the 3rd quarter of last year.

KPI for profit (margin).

Examples of KPIs for profit.

You need to achieve a profit of 100,000 rubles in November of this year.

KPI for market share.

Here we are already measuring the work of the sales manager relative to competitors. This indicator implies sufficient independence of the sales manager in choosing more specific KPIs, such as margin (profit), number of clients.

KPI for attracting new clients.

If you see that your sales are falling, then one of the methods to increase sales is to attract new customers. This especially works during a crisis, when existing clients reduce their purchase volumes, and some simply go out of business. KPI can be set not just on quantity, but on sales volumes or on attracting new customers, a certain type or customers of a certain market. Or, for example, KPI for the number of meetings with clients.

KPI for customer loss.

Unfortunately, customer losses happen and you need to be able to manage this process. This could be a return KPI lost clients. Managers often forget to follow up with customers who stop buying.

Alternatively, it could be a KPI - the ratio of lost customers to new ones.

KPIs for promoting certain products or groups of products.

You set sales plans for certain goods or groups of goods. It is possible to establish plans for warehouse balances at the end of the reporting period. Typically, product managers set these inventory plans.

KPI - accounts receivable.

You can set the maximum level accounts receivable and/or the amount of debt by days of delay.

KPIs are key performance indicators that can be used to evaluate the performance of employees in various departments of the company. Based on them, employees are promoted according to career ladder or pay them bonuses.

Relatively recently, company managers began to actively introduce such a concept as KPI into their work. Now the most valuable thing for which employees work is tied to it - wages. Moreover, the KPI indicator becomes important not only for administration, managers or office employees - line managers, but also for representatives of blue-collar professions.

The main idea of ​​KPI (Key Performance Indicator - usually translated as “key performance indicator”) is that with its help you can clearly and objectively evaluate the work and effectiveness of any employee, group of people, department, project and company as a whole. The indicator will reflect the whole picture of the processes occurring in the company using numbers.

The most important thing is to develop the right KPI for each position and introduce real indicators. For an employee who encounters this concept after getting a job in a company, it is very important to immediately understand and understand what exactly is included in his personal set of KPIs (criteria for evaluating his work). The list of indicators will allow a newcomer to quickly understand what exactly the employer wants to get and what results he expects from the employee. The KPI range will immediately show how much effort needs to be made to achieve the desired salary level, whether this work will be within the applicant’s capabilities, or, conversely, his abilities will allow him to significantly increase the requirements and, accordingly, the salary.

Scorecard

The KPI system gives specialists clear work goals and transparent bonuses. But the indicators may be unattainable, and the transition to such a system may be painful.

In large foreign companies, where everything is spelled out and detailed to the maximum, working according to the KPI system is an excellent option for an employee. He understands how much, for what and when he will receive extra salary. He has personal tasks and deadlines for their completion, and the company, through assessment, can regularly monitor his work.

In many organizations, in addition to the monthly report, it is the KPI results of all employees that serve as the basis for the annual assessment of the performance of the company’s personnel. After the annual assessment, the HR Directorate compiles lists of the most promising specialists for inclusion in personnel reserve companies and promotions.

But if in foreign companies the head office helps in developing goals and indicators, then Russian employers act somewhat differently. Some invite consultants, others manage on their own: KPIs are prescribed by the HR directorate. Since neither one nor the other thoroughly knows the specifics of the work of each specific specialist, it happens that the indicators are formulated inaccurately. It even happens in our country that the most advanced, in quotes, organizations involve managers and employees of the units being assessed to develop KPIs.

Types of indicators

We can highlight some key performance indicators in the KPI assessment system: financial, client, process and development criteria.

TO financial indicators include, for example, market value, return on investment - ROI, turnover, cash flow, internal rate of return - IRR, share price, total assets and many others. These indicators reflect the foreign economic situation of the company as a whole.

Client indicators characterize individual employees who deal with clients and create the external image of the company in the market. Such criteria include market share, number of new markets, customer satisfaction, quality, image indicators and much more.

Process indicators include indicators that grow with the speed of execution of various processes in the company: time to develop and launch new products on the market, process customer requests; time spent on logistics and delivery of goods, etc.

Development criteria - KPI indicators characterizing the degree and level of development of the company itself ( external processes company development in the market and internal development processes human resources): staff productivity, profit or administrative costs per employee, level of staff satisfaction and staff turnover.

The employee works as a consultant in the sales department, answering questions by phone potential buyers. The following key performance indicators (KPIs) are defined for it: customer satisfaction and the number of purchases that people made after consulting an employee over the phone.

Pros and cons

The KPI system is good for employees whose work results affect the financial and economic performance of the enterprise. In trading companies these are, first of all, top managers and sales managers, in recruiting companies - recruitment consultants.

In some companies, an employee's achievement of KPIs also affects the individual size of the annual salary review: the higher the score, the higher the percentage of salary growth. For example, a manager's annual bonus may consist of two variables that depend on individual performance goals and company performance. This approach encourages better performance of functional duties.

For employees from different departments, the size of the bonus, which is influenced by KPI, can range from 20 to 100 percent of the salary. At the same time, the formula for calculating the bonus itself is quite complex: it takes into account the number of KPIs, the completion rate of each of them, as well as its “weight”, called the influence coefficient.

If the KPI scale is not compiled correctly, it will be of little use. If there are too many KPI indicators, the impact of each on the size of the overall bonus will be small. For example, initially there were about 20 percent KPIs, but after a year they were reduced to five. Most of the indicators accounted for a small portion of the bonus, and a loss of 5 percent in it is not particularly significant. A 20% KPI weight motivates much more effectively.

One of the main disadvantages of the KPI system is the dependence of the quality of work of an individual employee and the performance of the entire department. If a department does a poor job or is not very high quality, without fulfilling the overall plan, then all employees of the department may lose their salaries at once. After all, personal KPIs are linked to key indicators of the entire department. If targets are systematically not met, the employee may be demoted or fired. Therefore, KPI forces you to always “be in shape and tone.” Those who cannot withstand this rhythm leave on their own.

Another drawback is that not all employees can directly influence the company’s strategic KPI indicators. When the bonus depends on net profit and sales, secretary or economist will not be able to influence him.

From experience we can say that very often in Russian companies the KPI motivation system is one-sided: everything that an employee exceeds is simply a job well done, for which he receives a salary, and for under-fulfillment he is deprived of some part of the salary.

Many managers international companies think they have a job technical specialists(accountants, engineers, programmers) is easier to describe with a job description than to prescribe KPIs for them. We must not forget that planning and calculating this system takes time. At the end of each month, heads of areas or departments spend time setting and calculating the KPIs of all their subordinates. Indicators have to be coordinated with the HR directorate, and the main work of managers fades into the background, but even managers have their own KPIs.

As a rule, the transition to a KPI system is usually accompanied by unrest in the team: some quietly sabotage, others do not completely accept it and leave the company. It is difficult to immediately change your habits, the order of performing functions, and get used to new conditions of remuneration. It’s easier for new employees if the HR manager clearly explains to them what the company pays bonuses for, and newcomers will most likely accept working according to such rules normally.

Opinion 1:

Lyudmila Shusterova, deputy general director outsourcing division of BDO

Original KPIs

KPIs are usually associated with either increasing a company's profitability and turnover, or increasing productivity and efficiency in the use of capital goods. Based on these conditions, it is unlikely that it will be possible to create any fundamentally new and original KPIs. Unless, of course, the work is related to something very non-standard. For example, for the head of a biological station, you can set the KPI to increase the koala population by n percent. But for an ordinary manager it is unlikely that he will be able to come up with something better than increasing revenue, margins, increasing customer satisfaction or reducing staff turnover. It is advisable to have several KPIs, but not too many. After all, in pursuit of business growth and profits, it is important that both clients and staff do not suffer - and this is a completely non-trivial task.

But the main task of indicators is not to be original, but to be effective.

Opinion 2:

Dmitry Pelakh, director of the Financial Consulting Agency company

KPI Regulations

In order to start using the KPI system in your company, you need to document it in internal documents. A KPI regulation should be developed, which will be approved by the head of the company. In this situation, it is advisable to provide formulas and calculations on the basis of which the system of indicators is built. It is also important to link indicators to data accounting or with IFRS indicators if the company uses international standards.

The regulations on the KPI system should establish a cause-and-effect relationship between indicators and the main goals of the company and determine the level of responsibility for the values ​​of indicators of employees to whom this system will be applied.

There is no standard form for KPI regulations, so a company can develop it independently or seek help from specialized consulting firms.

Opinion 3:

Ivan Shklovets, deputy head Federal service on labor and employment

Dismissal for poor performance

Such grounds for dismissal as low performance indicator, labor legislation does not contain. Consequently, the employer does not have the right to dismiss an employee with such wording.

It is possible to dismiss an employee due to inadequacy of the position held only based on the results of the employee’s certification, which must be carried out in the manner established by the employer himself in the form of a local normative act. In this case, there must be a protocol of the certification commission. However, even in this case, before dismissal, the employer will be obliged to offer the employee other available vacant positions or work that he can perform taking into account his state of health.

Failure by an employee to comply with established labor standards or quantitative (qualitative) indicators may affect the amount of remuneration. For example, incentive payments may be reduced or cancelled. However, when working the established working hours, the employee will in any case have a guaranteed right to receive the salary established for him ( tariff rate). If the employer nevertheless dismisses the employee on the above grounds, he has the right to appeal such dismissal in court.

Pros and cons of using KPIs to evaluate employee performance

Articles in this section

• Proper employee incentives

  The topic of motivating and stimulating the work of employees is one of the key issues in personnel management of any organization. When establishing a system for stimulating the work of workers, it is important to spell out all the necessary provisions in local regulations. Otherwise, claims from inspectors are possible.

• Motivations

  What employee recognition and recognition practices does your company have? Is there a unified approach/general culture of gratitude and support for employee initiative, or does it all depend on the individual style of managers?

• Staff motivation. The struggle for efficiency. Time to act!

  A crisis, whether internal or external, forces people to learn and companies to change. While the company is making a profit and there is no sign of problems, the owner and director are unlikely to be ready for serious changes. Low efficiency in business (as...

• Individual employee encouragement. How?

  Individual system employee incentives are an integral part of the work of an HR manager. After all, a productive employee is, first of all, a satisfied employee!

• We motivate accounting employees

  Not all key performance indicator systems are capable of making accounting employees perform their duties more efficiently and efficiently. However, everything can change if you connect gameplay to motivation.

• Formation of a system of non-material incentives

  At present, all possible systems are developing quite well in enterprises. financial incentives. This is due to the fact that employers strive to clearly define and subsequently know for what, for what specific work they pay the employee...

• Employee motivation: an equity model

  If employees perceive remuneration as fair, their work contribution remains at approximately the same level. The biased attitude of management initiates the emergence of tension and motivation aimed at reducing the degree of injustice. If employees perceive remuneration as too high, equity theory states that they will perceive an imbalance in their relationship with their employer and strive to restore balance.

• How motivation factors work

  How to build HR management practices in your company based on the theory of motivation, read the article.

• Counter-offer in the labor market - a way to keep a specialist in the company?

  Recruiters from staffing companies claim that employers are increasingly resorting to counter-offering (i.e. providing better conditions than the new employer) in an attempt to retain good worker, who has already decided on a new job and is leaving. How relevant is the counterproposal today? Many companies not only do not retain employees, they, on the contrary, reduce staff. Nevertheless, the topic of the counterproposal remains relevant to this day, because good specialists or managers are needed always and everywhere. Accordingly, accepting or not accepting a counteroffer is one of the defining choices in every person’s career. After all, your future fate as a specialist or as a manager will depend on which offer you choose. You will learn about what is happening in the labor market now from the article

• Motivational profile of the candidate

The article discusses the motivation factors that most often cause employees to change jobs. Given practical recommendations and advice on how to eliminate and/or reduce the negative impact of these factors or reduce the risk of their occurrence.

• What do the TOPs who already have everything want?

  The question “How to motivate someone who already has everything?”, from my point of view, is an epic. What is the difference between a true story and an epic? A true story is a story that happened once, and an epic is a repetition of this story many times with distortions in legends and myths. I have never met a top manager who already has everything in my life, this is an epic.

• The most effective methods of motivating staff

  Employees should be stimulated for intermediate achievements, without waiting for the completion of all work, since great successes are difficult to achieve and relatively rare. Therefore, it is advisable to reinforce positive motivation at not too long intervals. It is important to make employees feel confident, as this is required by the internal need for self-affirmation. Success brings success. In general, a number of rules for effective employee motivation can be formulated.

• Diagnosis of motivation

  The article is devoted to research and evaluation strategic development systems for managing the motivation of work activity of managers and specialists, as well as their remuneration at enterprises of the construction complex of the Penza region. The possibility of the existence of unused management reserves in strategic system motivation of work activity.

• Threshold of satiety.

  Managers are characterized by territorial mobility, high sensitivity to changes in the labor market and are not limited to a specific geographic area. They live and work throughout the space Russian Federation. At the same time, there are pronounced local features that significantly distinguish, for example, a manager information technology the city of Voronezh from the same specialist in the city of Yekaterinburg. The differences come down to three main parameters: the size of the “threshold of satiety”, the format of leisure time and self-esteem.

• Job satisfaction as a component of effective organizational behavior

  The most important task facing the modern Russian business community is the development of mechanisms for managing employee organizational behavior. Organizational behavior will be effective if it contributes to the achievement of the organization's strategic goals, i.e. the main vector of behavior of all employees coincides with the organization’s movement towards achieving its strategic goals. However, achieving these goals will only be possible if the sustainability of this movement is ensured. Job satisfaction (job satisfaction) can give such stability to employee behavior.

• Motivational mechanism of corporate culture

  Perhaps the key condition for increasing the efficiency of the internal segment of corporate management remains the choice of adequate methods for activating personnel at all levels of the hierarchy: from ordinary performers to top managers.

  Why is it that in an atmosphere of budget and staff cuts, some employees are loudly indignant, while others are quiet? Does this mean that the former began to work worse? How demotivated are “quiet people” who completely withdraw into themselves? This article briefly describes W. Marston's DISC model of personality differences, which is little-known but very effective for business, explains why different people react and behave differently in the face of a crisis, and provides recommendations for individual motivation for representatives of different personality types.

• Don’t you have exactly the same one, only without wings?

  In job advertisements you can often read the following: “Sociability, initiative, discipline and creative thinking - necessary conditions“Of course, we all want “a lot of everything,” without assuming that some requirements may be incompatible.

  Why is it necessary to focus on the company’s strategic goals when developing personnel incentive programs?
  How to make the motivation system as transparent as possible?

• How to motivate staff during a crisis

  A crisis situation threatens the company not only with financial problems and the loss of its position in the market, but also with the loss of qualified personnel, without whom it is impossible to overcome the crisis. Retaining key employees is one of the main tasks of management during a crisis, and this goal can be achieved if staff are informed in a timely manner and an adequate motivation system is implemented. Let's talk about this in more detail.

The ultimate, and often the only goal commercial activities individual entrepreneur or organizations - making a profit. The more it is and the less effort you have to expend to get the result, the better; but how to achieve acceptable performance? Emotional motivation of staff and review are not bad, but not universal and not always working methods: both a novice entrepreneur and an experienced businessman should not only plan future achievements, but also evaluate current ones.

One way to assess the profitability of an enterprise and the “usefulness” of employees is to introduce KPIs, or key performance indicators. How to implement and calculate C&I and how the remuneration of subordinates may depend on this is in the following paragraphs.

What is KPI?

Like most modern marketing theories and systems, KPI is not a strange English word, but an acronym derived from the phrase key performance indicators. The word key in this case can be unambiguously translated using the adjective “key”; performance is, depending on the desire of the translator, “productivity”, “effectiveness” or “effectiveness”; indicators - actually, “indicators” or “indicators”. Each of the translation options has the right to exist, however, in the Russian-speaking environment, “ key performance indicators", or simply KPI.

What are KPIs for?

As follows from the decoding of the abbreviation, KPIs are useful to an entrepreneur, director or head of a department for assessing the performance of their own, employees of a specific department or the entire organization as a whole. Indicators most often have a quantitative expression (how to calculate KPI will be discussed below), but they can also be qualitative: it all depends on the working conditions and the goals set.

The results of calculation or assessment of achieved KPIs can (by the decision of the businessman) influence the payment of staff, the payment of incentive benefits and the implementation of motivating events. At the same time, of course, we should not forget about current legislation: no matter how terrifying the KPIs of a particular specialist may be, this cannot become the reason for non-payment or untimely payment of the salary due to him in accordance with the terms of the employment contract.

Understand why KPIs can be useful in specific situation, you can by looking at a simple example. Let's talk about a small retail outlet selling elite processed cheese curds and shoe polish. The staff includes the store owner and seven customer service managers.

The key performance indicators (and, as you might guess, there may be several of them) for each manager can be:

• percent successful transactions(the ratio of actual and potential buyers, expressed in shares or percentages);
• average purchase cost (average bill) of the client;
• fulfillment of an individual or unified sales plan (as a percentage or a fixed amount, up or down from the target);
• the share of visitors satisfied with the service (based on several indicators, based on a completed questionnaire or a score).

Regularly (usually once a calendar month) receiving and processing relevant information, the owner point of sale will be able to assess the effectiveness of the team as a whole and regulate it, increasing wages and assigning bonuses to the most successful employees and dismissing or motivating careless managers with the right words.

Classification of the indicator

There is no single classification of key performance indicators: everything, as usual, depends on standard and incidental circumstances and the interest of the entrepreneur. KPIs, like most others marketing tools, is flexible and can be customized to specific needs without much inconvenience.

By time

One of the most common KPI classifications is temporary. As you know, key indicators have no prognostic use, and therefore can only be:

1. Operative, or proactive. They are calculated in real time and help to understand whether production or creative processes are going in the right direction, whether there is demand for the products (especially if they are new) and whether buyers (visitors, clients) are satisfied with the service and quality of the product. It is impossible to draw final conclusions based on operational KPIs alone, but it is possible and even necessary to slightly adjust the situation in the right direction.
2. Final, or lagging. They can only be calculated after the fact, based on the data obtained. Guided by the results of calculations, the head of an enterprise or division can choose ways to further increase productivity and profitability: increasing pay for distinguished employees or the entire department, if a collective indicator is taken into account, moving individual employees to other areas, increasing or decreasing the planned load, and so on.

By mass numbers

The second classification is based on mass. Key performance indicators could be:

• Individual, that is, relating to only one employee;
• Collective- for example, for one department, workshop or division;
• General- for the entire enterprise.

Each of these types can be, depending on the circumstances and method of application, useful, of little significance, and sometimes even slowing down the work of the company, therefore, when working with KPI, a manager should not limit himself to only one tool, but also completely succumb to the influence of modern determination systems efficiency.

By selected characteristic

The third, most extensive classification is based on a selected characteristic, around which key indicators are built. You can name as many such signs as you like; the most common are:

1. Performance. In general, this is the ratio (in quantitative terms) of the effort expended and the results achieved. For example, if to obtain output of products sold by a plant for 1000 rubles, you need to invest a total of 1500 rubles, including man-hours, equipment depreciation and electricity costs, the enterprise, even without making calculations, can be called ineffective. If the total costs remain at the level of 500 rubles and can be further reduced, the efficiency of the plant is obvious.
2. Cost. A narrower indicator that allows you to evaluate the increase or decrease in an organization’s expenses for the reporting period (usually a calendar month). After receiving the reporting information, it should be processed and KPI calculated - only then does it make sense to talk about the growing loss or profitability of the company.
3. Result. This is not always the profit received by the company or other material benefits. The result can be considered the release of a certain number of units of product, an increase in the number of regular customers, and even a decrease in the level of theft of fountain pens in the office. Result KPIs are calculated in fundamentally the same way as other key performance indicators, and can influence production assessment to exactly the same extent.
4. Environment. The profitability of the company, no matter how much the manager would like it, depends not only on the efforts of the employees. There will inevitably be interference in the matter external factors: rising prices for raw materials, falling interest target audience, the next surprises from the legislator and so on. It is difficult to predict them with sufficient accuracy, so all that remains is to analyze and, based on the obtained values, accept management decisions- for example, start looking.
5. Process. Process KPIs can (for the reasons described above) only be operational, otherwise they turn into key performance indicators of the result. Research is carried out directly during work, KPIs are also calculated immediately; on their basis, the manager decides whether it is worth sticking to the initially chosen line or whether it is necessary to make a course adjustment.

Important: KPIs can also be classified based on the components included in the calculations. In this case, we are talking not so much about the final factors, but about the methodology of research and calculations.

The components used in determining the values ​​of key performance indicators include:

• income;
• net profit;
• the cost of goods produced or services provided;
• the ratio of products of appropriate quality and total quantity of products;
• volume of current assets;
• depreciation rate;
• cost of funds;
• average material consumption per day, week or month;
• volume of unfinished work;
• volume of unused materials;
• employee productivity;
• cost of repair of production equipment;
• quantity of finished products in warehouse;
• product salesability.

All these components can be combined, used separately, or completely abandoned their use by switching to other methods of calculating and assessing KPIs.

Pros and cons of KPIs

Like every instrument marketing research, the system of key performance indicators has its advantages and disadvantages. They manifest themselves in different situations in their own way: sometimes the implementation of KPIs in production brings nothing but benefits; sometimes it leads to increasing losses. Most often there are “average” options; then the entrepreneur must, independently or with the involvement of specialists, weighing the pros and cons, decide whether to continue using key performance indicators or to switch to other technologies for assessing productivity and profitability.

The undoubted advantages of KPI are:

1. Ability to motivate employees. Typically, when implementing key performance indicators, specialists' remuneration directly depends on the success achieved, which encourages staff to work more efficiently than before. Those who distinguish themselves not only receive O larger amounts, but also serves as a positive example for other employees who, also wanting to increase their level of material well-being, look to a successful colleague.
2. Fair, unbiased and transparent job evaluation. The values ​​of key performance indicators for an individual employee, department or the entire enterprise as a whole are not influenced by any subjective factors. One general formula is used for calculations, and any employee can, if desired, check his result by performing simple mathematical operations, as well as compare his KPIs with the indicators of his colleagues and understand what exactly he is doing wrong.
3. Possibility of adjusting the behavior of the research object. Actually, key performance indicators are needed in order to draw conclusions based on the research and take measures to correct the unfavorable situation of the enterprise, maintain the current level or increase productivity and profitability.
4. Unbiased control of individual aspects of the organization’s work and employee involvement in the overall production or creative process. Everything is obvious here: if the remuneration of each of the employees, the entire workshop or division directly depends on the calculated KPIs, they will by default be interested in jointly achieving results, and monitoring their efforts will become much easier than if they were divided according to interests without the opportunity ( and desires) to interact effectively.

Disadvantages of KPIs:

1. Lack of a universal approach. The KPI system is quite flexible and diverse, but it is not suitable for all cases. And if the abandonment of quantitative assessments in favor of qualitative ones is envisaged and is quite acceptable, although it inevitably leads to an increase in the subjective component, then in some departments of the enterprise, for which the speed of response to the current situation is more important than achieving specific results (for example, in IT), the introduction of key indicators efficiency can have an extremely negative impact - and therefore slow down the growth of profitability of the entire organization.
2. The need for scaling. You can't just implement a KPI system based on advice from the Internet. It is extremely important to think through all aspects - from the “mass” of KPI (whether they will be calculated for each employee or for the department as a whole) to the regions of application: as mentioned above, the transition to key performance indicators does not always contribute to an increase in labor productivity.
3. Lack of positive motivation. This is more a flaw in the management policy than in the KPI system, but the connection is obvious: if an employee knows that for all his achievements he will simply receive the salary that is due to him, and for the slightest lag behind the established standards he will lose his monthly bonus and earn a reprimand, he (if possible) ) will prefer to work for a more adequate employer, and in its absence, will begin to sabotage the company’s activities. Thus, without properly thinking through the system of rewards and punishments, the manager risks losing competent specialists or encountering losses that were not previously observed and at first inexplicable.
4. Complete demotivation of staff. If the owner of a factory or company sets obviously impossible goals for employees (for example, to increase the number of products produced per month from 100 to 10,000 pieces), he should be prepared for a response. Some workers will simply quit, realizing that it is impossible to solve the task; others, as in the previous example, will refuse to comply with management’s inadequate demands, at best maintaining production profitability indicators at the same level.
5. Implementation difficulties. Not all employees, especially those who have been with the company for a long time, will enthusiastically embrace innovation; some of them, without understanding or seeing the benefits of KPI, will quit; someone will continue to work “as usual”, without particularly caring about achieving their goals; There will also be understanding people who will become the core of the transformation, but since their number is usually minimal, you should not pin all your hopes on such leaders.
6. Possible distortions in assessing the quality of workers' work. KPI is a composite system that usually includes at least three components. Consequently, if mistakes are made during the development of labor assessment technology, a specialist who fails to cope with the most insignificant task risks either being left without a bonus or receiving it in minimum size, which, as usual, will affect both the productivity of the enterprise and its profitability.

Advice: It is difficult for an unprepared person to understand the principles of operation of key performance indicators, much less prepare an enterprise for their implementation. Therefore, if the result is needed urgently, but awareness has not yet arrived, it is recommended to contact a specialist (marketer or economist) who will develop a rating system and draw up an action plan or tell the entrepreneur in which direction to move, and, if necessary, help.

How to calculate KPI?

As already mentioned, each of the key performance indicators is usually divided into several components, which are expressed in shares and can be conventionally called indices. The sum of the shares must be equal to one or, if percentages are used, 100%. Each of the current indices can be calculated using a simple formula:

KPIt = KPIi × (Рф / Рз), Where

• KPI- current, or current, index of the key performance indicator;
• KPIs- source index;
• Russia- results in quantitative terms achieved during the reporting period;
• Rz- planned results in quantitative terms.

Let's look at an example. Let there be three components for one of the KPIs, the first of which is 0.30, the second is 0.55, and the third is 0.15. Over the past month, the following results were achieved for each of the indices (in conventional units):

• for the first: actual - 185, expected - 180;
• for the second: actual - 65, expected - 70;
• for the third: actual - 500, expected - 350.

As a result, we get the following:

• The first KPI index will be equal to: KPItp = 0.30 × (185 / 180), that is, 0.31, or 31%.
• The second KPI index will be equal to: KPItv = 0.55 × (65 / 70), that is, 0.51, or 51%.
• The third KPI index will be equal to: KPIt = 0.15 × (500 / 350), that is, 0.21, or 21%.

Thus, based on calculations of the current key performance indicator indices, we can conclude that during the reporting period the employee (department or enterprise) began to work better on the first and third points (0.31 versus 0.30 and 0.21 versus 0.15) , but in the second his successes have clearly decreased (0.51 versus 0.55)

At the same time, the overall value of the efficiency indicator for the past month was: 0.31 + 0.51 + 0.21, that is, 1.03, or 103% percent, which indicates, at least a small, but still an increase in productivity and profitability.

Important: the total value of KPI indices for the reporting period, in contrast to the initial one, may be greater than one or 100% - this is a sign of increased labor efficiency. If the amount is less than or equal to 100%, we should speak, respectively, of short-term stagnation or gradual decline. Both are not critical, but require measures to correct the situation - and the sooner they are taken, the better for both the businessman and the employees.

Depending on the type of activity of an employee or department, it makes sense to calculate KPI based on the following indicators:

1. For sales department specialists (marketers, managers) - the volume of successfully concluded and completed transactions.
2. For employees of the accounting department - the number of payment transactions, actual and planned.
3. For specialists legal department- number of concluded contracts, real and approximate.

Advice: You shouldn’t try to build your KPI system only based on the experience of other companies. What was suitable in one case (and at one time) may be unacceptable in another. Therefore, instead of adjusting mechanisms to standards taken from nowhere, it is better to spend a little effort on fine-tuning them: this way you will not only save your nerves and good mood employees, but also to increase their productivity, which is the ultimate goal of introducing key performance indicators.

Features of KPI implementation

Each enterprise, even one operating in a long-developed niche, is unique in terms of the quantitative and qualitative composition of its personnel, the management methods used, the main mission and additional goals and other parameters, and therefore it is impossible, without giving specific examples, to describe the features of integrating a system of key performance indicators into a business.

As an example, we will consider average size a company engaged in distance sales using its own online store.

The first stage of KPI implementation is the definition of evaluation criteria and selection of “test subjects”. This can be either individual employees (but then and in the future KPIs should be applied individually) or entire departments. Since the company in question is a narrowly focused one, it would be more logical to select several managers for the experiment (with their consent, of course).

The second stage is the development of new documentation. Depending on the size of the organization and management features, these may be reminders, job descriptions, employment contracts or orders from management. Employees participating in the experiment must be familiarized with all these papers: by signature, if it concerns documents, or in fact, if this simple instructions and reference books.

The third stage is preparation and training. Despite the fact that the documents have already been read and signed, employees will not be able to immediately begin working in a new way. They need to undergo appropriate training, receive additional explanations, and also clearly understand that now their payment will directly depend on key performance indicators, and not on other incidental factors or the terms of a previously concluded contract. You shouldn’t be too hasty in moving to the next stage: the more time the employer agrees to spend on instruction and consultation, the more time his subordinates achieve in the future, as practice shows.

The fourth stage is obtaining and processing the first results. Typically, a month is selected as the reporting period; less often - a quarter. Let the indicators of one of the managers for the past month be equal to:

• the first index (number of sales) - 0.36 versus the original 0.30;
• second index (repeated calls) - 0.41 versus 0.45 initial;
• third index (attracting new customers) - 0.29 versus 0.15 initial;
• fourth index ( positive reviews about the online store) - 0.12 versus the original 0.10.

Then, in total for the reporting period, the employee showed efficiency (0.36 + 0.41 + 0.29 + 0.12), or 1.18 (118%), which clearly indicates the high productivity of his work. Based on the data obtained, you can write to the distinguished employee financial incentive. There are many models for calculating incentive payments at the end of the month; Below are the two simplest and most popular ones.

1. First model involves allocation to wages fixed (unchangeable) and variable parts. The first, as you might guess, does not depend on KPI; the second one depends on percentage. So, if the fixed part of a manager’s salary is 20,000 rubles, and the variable part is 15,000 rubles, then, having fulfilled the plan 100%, he would receive 35,000 rubles. Since his efficiency indicator was 118%, for the month the employee is entitled to: 20,000 + 15,000 × 1.18, that is, 37,700 rubles, which is 2,700 rubles more than planned. On the other hand, if the manager had fulfilled the plan by only 96%, he would have received according to the same scheme: 20,000 + 15,000 × 0.96, that is, 34,400, which is 600 rubles less than planned.
2. Second model involves the recalculation of bonus payments based on a coefficient table, for example, the following:
   • if KPI is less than 70%, the multiplier is 0;
   • if KPI is from 70% to 80% - 0.65;
   • from 80% to 90% - 0.75;
   • from 90% to 94% - 0.85;
   • from 95% to 97% - 0.95;
   • from 98% to 100% - 1.00;
   • from 101% to 104% - 1.25;
   • from 105% to 108% - 1.35;
   • from 109% to 110% - 1.45;
   • above 110% - 1.50.

Finally, the final stage of KPI implementation is processing the results, identifying errors (for example, neglecting external and biased factors) and scaling the system to the entire enterprise as a whole or to selected departments. In the future, it will be necessary to collect statistical data from time to time and adjust the program, but if the key performance indicators “take root”, most likely there will be no need to cancel them.

Let's sum it up

KPIs, or key performance indicators, are used to measure the productivity and profitability of a business or the performance of individual employees. Indicators can be leading and final, mass and individual, and also relate to costs, results and other parameters.

KPIs can be calculated using a simple formula using real and planned values ​​for the reporting period. Based on the results of calculations, the employee or the entire department is assigned an increased bonus or a reduced bonus. KPIs should be introduced gradually, without integrating the system into everything at once. production processes, but by selecting several objects of study and observing the changes that occur.

Key Performance Indicators = KPI = Key Performance Indicators (KPIs) is a system for measuring set goals, which is based on the usual mathematics of calculating the “Plan/Act” of achieving a goal as a percentage. In a given situation, key performance indicators (KPIs) define milestones in the process of achieving multi-stage objectives.

Key Performance Indicators (KPI) can be translated into Russian in different sources in different ways, for example: “key performance indicators”, “key performance indicators”, “key performance indicators”.

It is commonly said that an indicator is a KPI if it measures the achievement of a goal. The technology of setting, monitoring and reviewing the work goals of employees and departments as a whole is a task modern system management. One of the popular KPI management concepts is called "Management by Objectives".

Automation of the calculation of Key Performance Indicators (KPI) is a task for level solutions Business Intelligence (BI)

Management by Objectives = MBO = Management by Objectives is a process of coordinating goals within an organization, in which the company’s management and employees, setting goals, as a rule, “from top to bottom,” understand the existence of a hierarchy of goals within the company.

Simply put, Management by Objectives (MBO) means that every manager, from top managers to line level, and every employee in the organization must have clear KPIs that ensure that the KPIs of managers at higher levels are met.

In this case KPI (Key Performance Indicators) are key performance indicators that measure employee achievement of goals at all levels in the organization.

Management by Objectives– this is primarily the task of the company’s management, which includes the work of:

• by formulating goals
• according to KPI definition
• on communicating goals and KPIs to employees
• to provide the goals with the necessary resources
• to monitor the achievement of set goals

Ideally, the goal itself, which is measured using KPI, should answer SMART concepts, i.e. have:

• S – specific/Specificity (to be specific, to have a specific result)
• M – measurable/Measurability (to be measurable, to have a measurement of achievement, i.e. KPI)
• A – achievable/Achievability (have the necessary resources to achieve)
• R – relevant/Significance (to be relevant, this task must be completed now)
• T – time-bound/Limited in time (have a deadline, certainty in time)

Application of the approach in the organization Management by Objectives (MBO) allows you to systematize the process of setting goals and assessing personnel performance by setting personal KPI indicators employees.

In practice everything Key Performance Indicators (KPI) employee are reflected in the so-called "MBO Matrix of Indicators", or other common names: "Performance Evaluation Sheet"— (ENT sheet) or simply "Employee's personal file".

The results of KPI implementation are used in corporate "Staff motivation system", for example, in calculating the bonus part (bonuses) of employees.

Methodology "Management by Objectives" is effective tool for setting and monitoring the implementation of tasks at the tactical management level. At the same time, according to the requirements of quality management systems at the enterprise (ISO 9001), tasks at the level of tactical management must be consistent (follow) from the tasks defined at strategic level, where the most effective management tool is "Balanced Scorecard" (BSS).

Balanced Scorecard = BSC = Balanced Scorecard (BSS) - one of the powerful tools strategic management, which allows you to formalize the company’s strategic goals and further decompose them to the level operational activities and core business processes. The following groups of indicators are usually identified as key levels of decomposition::

• Finance (financial indicators)
• Customers and Products (sales figures)
• Business processes (process efficiency indicators)
• Personnel (indicators of personnel training and development)

Control at all levels balanced system indicators (BSC) carried out through the so-called Key Performance Indicator (KPI)— Key performance indicators.

The relationship of all KPIs in groups is shown in "BSC Strategic Map".

It should be noted that in this case KPI are measures of the achievement of strategic goals, as well as characteristics of the effectiveness of business processes, and not the work of each individual employee.

In the context of employees KPI used in management models of tactical management, for example, in the concept "Management by Objectives", from which, as a rule, it follows "Staff motivation system", based on achieving personal KPIs.

Schematically, all this can be connected like this:

Relationship diagram BSC -> MBO -> KPI -> Business processes*
(Strategy -> Goals -> Plan/Act -> Actions*)

But this is all theory...

In practice, KPI calculation comes down to the following mathematical logic:

KPI composition

KPI consists of:

• KPI plan (planned KPI value to be achieved)
• Fact KPI (actual KPI value that was achieved)

Types of KPIs

KPIs are:

• Absolute (numeric)
• Relative (percentages/coefficients)

KPI calculation

KPI calculation formula:

• Fact KPI/Plan KPI = Achievement of KPI (Fact/Plan = if the result is greater than the plan – good)
• Plan KPI/Fact KPI = Fulfillment of KPI (Plan/Fact = if the result is greater than the plan - bad)

KPI Examples

I will give a number of examples of key performance indicators in areas of analytics that are provided by default in our ready-made Business Intelligence (BI) solutions .

Absolute KPIs (numeric)

Sales KPI:

• Sales volume in rubles
• Sales volume in units of measurement
• Average sales price
• Markup in rubles
• Margin in rubles
• Discount in rubles
• Number of clients in sales
• Number of brands in sales
• Number of products in sales
• Number of factories in sales
• Number of suppliers in sales
• Number of orders in sales

Procurement KPIs:

• Volume of purchases in rubles
• Volume of purchases in units of measurement
• Average price in purchases
• Number of brands in purchases
• Number of goods in purchases
• Number of plants in procurement
• Number of suppliers in procurement
• Number of orders in procurement

Inventory KPIs:

KPI for receivables:

• As a rule, absolute KPIs are not used

KPI for the lender:

• As a rule, absolute KPIs are not used

Payment KPIs:

• As a rule, absolute KPIs are not used

Relative KPIs (percentages/ratios)

Sales KPI:

• Sales growth in rubles
• Sales growth in units of measurement
• Markup in percentage
• Margin in percent
• Percentage discount

Procurement KPIs:

• Increase in purchases in rubles
• Increase in purchases in units of measurement

Inventory KPIs:

• Remaining shelf life as a percentage

KPI for receivables:

• Percentage of overdue accounts receivable (PDR/ODR,%)

KPI for the lender:

• Percentage of overdue accounts payable (PKZ/OKZ,%)

Payment KPIs:

• Document payment percentage
• Payment distribution percentage
• Margin as a percentage on payments
• Margin as a percentage according to documents

This was an example natural KPIs, which are located inside analytical modules (OLAP cubes) and have full detail for all dimensions (directories) of the OLAP cube analytics.

Also in practice there are artificial KPIs, the calculation of the KPI Plan and the KPI Fact is more complex and often involves only a certain level of detail, for example, only for employees. As a rule, such KPIs are usually placed in a separate module, which contains analytics only for KPIs.

For such a case, we have a ready-made level module Business Intelligence (BI), which is called “KPI ANALYTICS”. This module allows you to automate the calculation of Plan/Actual KPI of any complexity.