KPIs are key performance indicators that evaluate the work of each employee. They also help to analyze the work of the entire company, achievements over a certain period and are an excellent motivator for quality work. The main thing is the correct development of a KPI system for a specific position, taking into account all the nuances of an employee's activities in the company.

Universal performance indicators cannot be applied to all positions, because they just can't meet expectations. Let's say it's almost impossible to make a KPI for an accountant. The development of a motivation system based on KPI is an analytical work that includes both the preparation of KPI and the analysis of the result.

It is important to consider the following:

• There should be few performance indicators, otherwise the calculations will be confusing and, as a result, the goal of the assessment will not be achieved.
• Each KPI must match the final goal.
• The established KPI indicators must be guaranteed to be achievable and clearly correspond to the sphere of influence and responsibility of the employee (position).
• It is possible and necessary to prescribe employee motivation only on the basis of key performance indicators, then the employee will understand what is expected of him and will move towards a clear goal.

What indicators are

Often in companies and enterprises, KPI indicators are classified as operational and those that are late with the result.

Long-term indicators show the result after a certain period of time, in turn, operational (leading) indicators allow you to evaluate the effectiveness of work very quickly.

Varieties of indicators in business processes:

• Result performance indicators are KPIs of profit, revenue and sales for a specific period.
• Cost KPIs - help evaluate the achievement, taking into account financial and time costs.
• Performance indicators reflect the correctness of the employee's activities, his system of work in accordance with the regulations and algorithms of his position.
• Efficiency KPIs show the level of the ratio of the result to the cost of it in different options.
• The productivity efficiency ratio gives an understanding of the result achieved in a certain ratio with the time spent.

When calculating KPI, you should immediately form the goal and priorities for the selected position. In each case, they are calculated separately, depending on the scope of the company. The assessment methods and the specific calculation formula for a competent assessment of the results depend on this.

We calculate KPI indicators

To understand the picture of developing KPI indicators, we will give an example that indicates the algorithm of actions.

Stages of developing KPI indicators:

1. Formation of the team, selection of members of the working group and research for each position.
2. Drawing up a methodology of actions. Based on the analysis, models of the system of performance indicators for positions are created, regulations are prescribed, indicators are developed and tested.
3. Implementation of the KPI system: established performance indicators are integrated into the software, and employees are informed about the conditions and requirements under the signature.
4. The final stage of development: monitoring the implementation of KPI, adjusting indicators during the test period.

In practice, 2 methods of developing KPIs are most often used: process and functional methods.

The process approach is based on performance indicators based on the internal business processes of the enterprise.

The functional approach is based on the very structure of production or management of the organization, the functional responsibilities of the position, department, branches.

We give in the table an example of calculating two methods for developing performance indicators.

For example

An example of calculating KPI for one employee is given in the table of the sales manager, where there is an indicator index.

https://yadi.sk/i/jomsvYOq3Kyb2z

From this example and the KPI index, we can see that this sales manager exceeded the plan by 6% and, accordingly, he is entitled to the reward agreed in his motivation.

To calculate the KPI of a position, you can use several performance indicators and calculate the motivation using the formula:

Salary + K1 + K2 + K3. Where K1, K2, K3 are KPI indicators (manager's salary + fixed % of sales + % of the number of attracted customers for the period (month) + agreed bonus for quality customer service).

In such a simple way, you can enter any KPI indicators into the formula, which can be calculated as a result.

Eventually

To calculate the effectiveness of an employee's work, it is necessary to carefully approach the assessment and objectives of the position, and for this it will be necessary to analyze the level of performance and sphere of influence of the employee in a particular organization. Having determined the KPI indicators, it is possible to prescribe a motivation system, on which the employee's salary will depend.

Kipiai, or key performance indicators, is a unique system that has recently come to Russian business. To date, there is no more reliable method by which to evaluate the efficiency of the enterprise, so the use of this system is practiced not only in Russia, but throughout the world.

The concept of KPI

To begin with, let's fully reveal the question of what it is - KPI, or key performance indicators.

Ki Pi Eye is a unique system with which you can calculate the performance of each individual employee of the organization. Thanks to such a system, one can not only understand how effective the activities of employees are, but also motivate them to improve their working skills. The most optimal performance indicators for each individual employee should not exceed the figure 5.

To understand how to operate this system correctly, it is necessary to more carefully and deeply study the types of performance indicators, as well as consider examples of KPIs.

Varieties and groups of KPI

Kipiai indicators are usually divided into several subgroups, based on the results obtained in the calculation of the results of a certain area of ​​activity.

1. Financial expenses.
2. The performance of the company, implying the calculation of kpi as a percentage. This percentage shows how high the capacity utilization of an enterprise is.
3. The productivity of the firm. This subgroup of KPI performance indicators is based on a comparison of certain data (for example, cost items and revenue for a certain period of time).
4. Final calculations, which are based on the quantitative expression of the results related to the activities of the company's employees.

A key performance indicator is built on several principles. If you do not take them into account, then the data obtained will be unreliable. These are the principles:

1. All indicators must be measured in quantitative terms.
2. The data obtained should be directly related to the activities of the company.
3. Results should not be costly, both in terms of time and resources.

Earlier, we considered the question of what is KPI, dividing it into 3 small subgroups. However, the gradation does not end there, since this system also has its own varieties. There are two of them in total. These are operational and strategic KPIs. Let's first understand what kind of operational KPI system it is.

Operational KPIs are indicators by which you can evaluate the effectiveness of the company's activities at the moment. Simply put, the data obtained when calculating kpi reflects how well the company's employees work in the current period of time.

In addition, kipiai operational systems help to compare the tasks performed by employees with the conditions that were created for this. Based on the results obtained, the management of the enterprise can evaluate the quality of the manufactured product, the conditions for its delivery and further distribution.

What is a strategic KPI? Such indicators reflect the performance of the company for a certain period of time. With their help, you can find shortcomings in the work of personnel and adjust its activities for the next period of time (for example, for the next month, quarter, six months, etc.).

In addition to the quality of work of employees, financial data can also be processed. Based on the results of the KPI calculation, cash flows are characterized, which help to understand how profitable the organization itself is, and how much the products produced by it are in demand.

Scopes of KPI and its calculation

Since we figured out what kpi is, or, in simple terms, key performance indicators, we need to move on to the next, no less important, question: where and why are they used? And also consider the formula by which they are calculated.

A performance indicator is a numerical measurement of the set (and achieved) goals and objectives that play an important role in the successful promotion of a business. Thanks to the prepared report, where all the necessary indicators are taken as a basis (they were discussed above), the management of the organization has the opportunity to fully assess how the developed plan was carried out, as well as what was achieved over a certain period.

KPIs are used in various business areas. Each of them has its own list of indicators that are being processed, and on the basis of which an indicator is calculated that reflects the efficiency of the enterprise.

Sales area

To multiply your fortune, you need to understand what KPIs are in sales and what an important role they play. These indicators can be calculated based on:

• received for a certain period of financial profit;
• proceeds from sales carried out by the firm;
• the cost of manufactured goods;
• the percentage of low-quality goods;
• amounts of current assets;
• the total value of all the company's inventory.

Retail KPIs are based on 5 key principles:

• percentage of sales for 1 hour or day of the outlet;
• the average amount of money paid by the buyer for the goods (this amount is calculated at the expense of punched checks);
• the number of products sold for 1 time;
• the ratio of employees' salaries to the proceeds from the sale of goods;
• sales conversions.

Thus, having received all the necessary calculations, you can quickly adjust the work of the staff, significantly increasing the number of transactions, which, in turn, helps to increase the store's income.

Manufacturing industry

What is a key indicator in production, and on what basis is it calculated? First of all, when calculating the efficiency coefficient, they take as a basis:

• indicators of the average daily consumption of raw materials from which products are made;
• volumes of raw materials used and remaining in stock;
• volumes of work in progress;
• work efficiency of employees;
• various production costs;
• equipment repair costs;
• conditions, terms and cost of storage of finished products.

To get the right data, you need to know how to calculate KPIs. There is a special formula for this:

(qph/ qpl)×100%

Now let's decipher the indicators:

• qf - the actual volume of all sales carried out by the company;
• qpl - sales volume, which is only planned to be carried out.

The data obtained through this form is the so-called performance criterion.

Examples of KPIs

To fully understand what kipiai is, let's look at some examples of key performance indicators. For a better understanding of the essence, each of the professions that are taken into account in the calculation will be considered separately. The table below shows not only the type of activity, but also the indicator on the basis of which the efficiency criterion is calculated.

If we again take the example of a sales manager's kpi as a basis, then with the help of the data obtained after the calculation, the head of the management department will be able to identify not only positive, but also negative aspects in the activities of his subordinates. So, he will know exactly how many calls and meetings the sales manager made, whether they were effective, how many people became regular customers, etc.

If the data obtained do not correspond to the developed plan, then this means that the person involved in this type of activity lacks either knowledge and skills, or perseverance and desire to work.

All the above examples of KPIs, or key performance indicators, fully reflect the essence of this concept. Of course, it is difficult to immediately understand all these subtleties (especially for a novice businessman). However, it is better to spend a little time studying this important topic in depth than to incur financial losses that can seriously harm the development and successful promotion of a business.

Key performance indicators KPI (Key Performance Indicators) is a term that came to us from the Western management system. Companies in America and Europe have been using this performance analysis tool for decades.

KPI allows not only to analyze, but also to control the activities of employees, departments and the company as a whole.

What are key performance indicators and examples of KPIs will be discussed in this article.

Key performance indicators KPI - what is it?

People make more efforts when they believe that they are justified and will help achieve the desired goal.

IMPORTANT: Motivation at the enterprise is built in such a way that the goal of the company itself is achievable through the achievement by employees of their goals.

Of course, employees must understand the purpose of the enterprise and how they can influence it, as well as what they receive as a reward for excellent work done to achieve the goal (for example, a bonus to their income).

That is why middle and senior managers often receive bonuses in addition to their basic salary.

How are

KPI is not a system built on motivation, but just one of the management tools in an enterprise. The peculiarity of this management tool is that employees from different departments in the company meet key performance criteria.

In order to build a KPI system in an enterprise, it is necessary not only to create the list of indicators itself, but also to describe how they will be calculated, as well as create reporting forms for such indicators.

The first thing a director or shareholders should do is to re-formulate the long-term and short-term goals that the company is striving for.

Based on these goals, criteria are built, combined into a subsystem, and then into a KPI system. After the KPIs are defined, the manager will need to allocate responsibility for their implementation.

Their types

All key criteria can be divided into two large groups:

• lagging;
• operational.

The first show the result at the end of a certain period. So, for example, most financial indicators are specifically lagging, because they can reflect the potential of the company, but they cannot convey how things are in the company for a specific period of time.

Operational indicators can be adjusted during the reporting period in order to achieve the desired results at the end of it. By such indicators, one can judge how things are going in the company for a specific period, and also by them one can predict what to expect in the future.

Moreover, operational indicators make it possible to judge whether the company's customers are satisfied, as well as how well the business processes in the organization are debugged.

Key indicators differ by type:

• indicators result- demonstrate the quality of the result, as well as the ratio of its actual quantity to the expected one;
• indicators costs- show the amount of expenses incurred;
• criteria functioning- most often they show how the algorithm of a particular business process corresponds to the required one;
• criteria performance- show the ratio of the result to the resources spent on its acquisition;
• indicators efficiency- just like the previous indicators, this group of criteria refers to production estimates and demonstrates the relationship of the result to the amount of resources spent to achieve it.

How the system works

The KPI system is based on two theories: control and management according to goals. The essence of the system is that the company has the opportunity to plan and foresee the result by meeting certain indicators.

The KPI system is primarily designed to ensure that the staff, as they fulfill their direct duties, do not forget that the company has global goals and that if they put their efforts to achieve them, they will be rewarded. Most often, bonuses and other monetary incentives act as remuneration.

Video - how to implement a KPI system in a company:

Currently, such a system is recognized as one of the most effective systems for motivating employees, as well as stimulating their work activities. Of course, first of all, this system applies to management personnel, for example, middle and senior managers, as well as managers, economists and all those who have a direct impact on the company's profits, as well as its positioning in the market.

In sales

As a rule, in most sales departments it is customary to reward managers for achieving individual indicators. So, you can even meet whole nominations, for example, “seller of the year”.

Of course, such rivalry sometimes does not benefit the team, because “salespeople” begin to work not for the team, but for themselves, therefore collective stimulation and rewards are recommended.

Key criteria in sales are calculated based on financial indicators, for example, such as:

• revenue from sales;
• production cost;
• revenue;
• inventory value, etc.

In production

Most often, when implementing KPI in production, the management of the enterprise faces two tasks: to keep production volumes, and also to maintain quality at the level of the position.

So, the following types of bonuses can be introduced in production:

• achieving or exceeding the volume of output;
• no more than any specific number of claims from buyers per unit of time;
• percentage of defective products.

Of course, these are not the only criteria that can be evaluated, and depending on the type of product and production volume, the management of the enterprise can implement a completely different KPI system.

In the service sector

The service sector assumes the presence of the largest number of key indicators. So, for example, you can select performance criteria that include the number of sales per day, month, week and year, order size, comparison of the number of orders a month, quarter or year ago with the current indicator, and so on.

Marketing in the service sector also did not remain without the use of KPI. The following criteria are distinguished:

• the quantity and quality of reviews for the service;
• the number of clients who have become permanent;
• the number of subscribers to the company's page in social networks;
• advertising return rates;
• the number of letters received from buyers;
• the time for which one request is solved;
• the effectiveness of affiliate programs and so on.

IMPORTANT: As a rule, in a company in which KPI practice has become a daily norm, constant monitoring of the implementation of key performance indicators becomes the norm.

After a certain period of time from the introduction of the practice to its successful implementation, control over it turns into a routine. All subsequent decisions are usually made on the basis of these indicators.

Examples of KPIs

Depending on the position, the amount of work, the stage of the organization's life cycle and other important indicators, KPIs for all employees will be different.

So, for a marketer, this will be the share occupied by the company in the market, and for an accountant, it will be the timely conduct of operations for paying taxes, transferring wages, and so on.

Consider key performance indicators on specific examples.

For manager

Management is a very flexible concept and therefore there are no indicators that could be used both in sales management and, for example, in advertising. Consider the main types of management and KPI.

By sales

Most modern companies today have such a KPI system installed, in which sales managers receive a stable salary, as well as a bonus based on the results of sales.

Such a system is quite understandable and transparent, however, it also has some disadvantages. For example, each "salesperson" works exclusively for himself, forgetting about the team, moreover, the quality of service with such an established KPI system suffers greatly, since management is aimed solely at increasing sales.

Video - Key Performance Indicators KPI for Sales Manager:

An alternative to such a KPI system has become a system that combines several indicators. So, in order to calculate the effectiveness of a person in the sales department, it is necessary not only to find out how many purchases he helped customers make, but also how satisfied they were with the purchase.

Procurement

The functionality of a purchasing manager varies greatly depending on the field of activity of the company. In its most simplified form, it is simply the selection and purchase of goods.

The maximum possible areas of responsibility of the purchasing manager are:

• Inventory Management;
• work of purchases;
• price analysis;
• product promotion;
• launch of new product lines.

KPI indicators for a purchasing manager include not only economic indicators, but also qualitative ones, that is, the criteria for the manager's activity.

So, when calculating KPI, you can use:

• timeliness of payment to suppliers;
• no delays in placing an order;
• analysis of prices for goods from competitors;
• launch of new product lines.

Advertising

Depending on the volume of tasks performed, the direction of the company, as well as the skills of the advertising manager, the following KPI indicators are found in advertising management:

• effectiveness of advertising campaigns;
• effectiveness of promotions;
• merchandising;
• the number of new customers of the company;
• efficiency of work with Internet platforms and social networks.

In trade

Key criteria in retailing may or may not be financial. Retail KPIs should be used all the time as they make life much easier for any retail organization. The analysis of indicators will help not only to determine the company's further goals, but also to identify all the existing shortcomings in the existing business model.

For a grocery store clerk

The indicators by which you can evaluate the work of the seller of a grocery store are the following:

• sales growth;
• sales volume per physical unit (for example, per 1 sq. m. of the area of ​​the trading floor or the length of the showcase);
• sales volume per 1 performed operation;
• sales volume for 1 hour of work.

Also, in addition to the above indicators, you can use such a value as the efficiency of using goods. Inventory efficiency involves calculating the ratio of net sales over time to inventory.

For the seller of non-food products

For the seller of non-food products, some indicators similar to those for the seller of food products may be involved. So, it can be the sales volume for 1 hour of work. In addition, the following criteria should be taken into account:

• average purchase receipt;
• the number of returns for a certain period of time;
• wage criterion.

For other professions

Sometimes the KPI system is introduced not only for the management team, but also for people involved in the sales process, but also for other employees of the company.

For employees involved in production, the key performance criteria will be, for example, the growth of labor productivity, the relative release of workers, wage intensity, as well as the increase in production due to increased productivity.

The main performance indicator accountant is the payment of all basic payments on time, as well as an indicator of interaction with tax authorities and extra-budgetary funds.

For lawyer the main performance indicators will be the percentage of claims closed in pre-trial order by the company's counterparties, as well as the percentage of cases won in court.

Conclusion

KPIs are performance indicators for an organization. created to achieve its goals. Performance indicators are an indicator of what success the company has achieved at a certain stage of its activity.

In order to develop and implement such a system in an organization, it is first necessary to define goals, on the basis of which a list of performance indicators will already be built.

In addition to compiling the list, the head of the organization should appoint responsible persons, as well as determine the form of reporting on indicators.

Depending on the direction of the company, its stage of the life cycle, as well as other important indicators, the KPI of employees can be completely different.

So, for one advertising manager, only one efficiency criterion will apply - the effectiveness of advertising campaigns, for another advertising manager, in addition to this criterion, a criterion for working with promotions in social networks will also be introduced, etc.

Optimal conditions for opening and maintaining a current account for entrepreneurs

From this article you will learn:

• What is KPI
• What examples of KPIs for representatives of various specialties can be adopted
• How to calculate KPI in EXCEL using an example

The method of personnel assessment using key performance indicators KPI (Key Performance Indicator) is based on the methodology of "management by objectives" by Peter Drucker. It has been used in Russia since the early 2000s. In this article, we will describe the essence of KPI, give examples of KPI and show the prospects for applying and improving the KPI method in Russian enterprises.

What is KPI with examples

Since July 1, 2016, professional standards have been introduced at Russian enterprises as the basis for the formation of personnel policy. To assess the success of the implementation of standards, a system for assessing the quality of work of employees is needed.
The criteria that characterize the quality of labor are presented in Figure 1.

Picture 1. The structure of criteria for the quality of work of employees of the enterprise.
Level I criteria are actually the names of the two main classes of criteria.
Level II criteria- generalizations suitable for presentation to the award (but not for evaluation).
Level III criteria- unified indicators that allow you to perform an approximate assessment of the effectiveness and reliability of the employee's work. Almost all known methods of personnel assessment are focused on the assessment of criteria of the III level. Depending on the education and literacy of the authors of the methods and consumers, the following are most often chosen:

• Purely economic KPI criteria. Applicable to managers and professionals directly related to financial management and product sales.
• Questionnaires in the form of forms for experts to assess competencies.
• Psychological criteria (Kettell test, etc.) - on the assumption that the quality of work is determined mainly by personal characteristics.
• Position profiles based on specialized (mainly psychological) sets of indicators.

Consider the most popular KPI-based assessment technology.


The main idea of ​​KPI- detailing the strategic goals of the enterprise to the level of an employee. As a rule, financial and economic indicators act as strategic goals. There are several subgroups of KPIs based on quantitative measures of activity:

1. Expenses- in value terms.
2. Performance- percentage of equipment loading.
3. Efficiency. Most often it is the ratio of revenue to cost.
4. Results. For example, the number of products produced.

Key performance indicators can be operational and strategic.

• Operational indicators characterize the current results of the enterprise and its divisions. They allow online monitoring of technological processes, material support, product quality and adjusting control parameters in accordance with changing conditions.
• Strategic Indicators allow you to monitor the generalized results of the enterprise's work for the month, quarter, half year and make decisions to ensure that these results comply with the planned ones. Short-term forecasts of efficiency of activity of divisions, profitability for the forthcoming period are calculated.

KPI are numerical indicators of the degree of success in achieving specific goals. This allows you to use the KPI system as the basis for motivating management of employees' activities.

Examples of KPIs for representatives of various specialties

KPIs are most convenient for assessing the effectiveness of the work of administrative and managerial personnel (managers, economists, financiers, etc.).
Key performance indicators of trading activities are calculated based on the data:

Key production performance indicators are calculated based on:

Specific examples are presented in the following table:

An example of calculating KPI in EXCEL

Each company has its own KPI assessment system. Key performance indicators are set for each position independently. Their total number for a particular position/job is no more than five. At the end of each month (for some enterprises - a quarter), the final individual KPIs of each employee are calculated as a weighted average of private KPIs. The simplest algorithm for combining private indicators of a separate workplace:

where are particular performance indicators;
n – number of private indicators ( n≤5) ;
– weights of individual (private) KPIs. Usually
The weights differ because the significance (importance) of individual indicators may not be comparable. Weights are normalized:

Value-Based Premium Formulas K(decision rules) can be expressed as a simple linear or step function TO.
The values ​​of motivational coefficients (that is, the conversion coefficients of the value K to the premium) can be determined, for example, according to the following algorithm:

The following figure shows an illustrative example of calculations using Excel.


Figure 2. An example of assessing the success of an activity.
Explanations:

• Salary- a fixed part of the salary. It is proportional to the number of hours worked. For simplicity, in the calculation example, the fixed and variable parts of the salary are assumed to be equal.
• Percent fulfillment of the sales plan and the work plan are calculated in relation to the actual indicators to the planned ones (as in the above table of calculated values).

Formulas in Excel for calculating KPI for each employee: \u003d (50% × (IF (D3<80 %; 0; ЕСЛИ(D3<90 %; 0,5; ЕСЛИ (D3<100 %; 1; 1,5))))). Влияние показателя 1 и показателя 2 на сумму премиальных считается одинаковым. Коэффициенты тоже равны. В связи с этим для расчета показателей 1 и 2 берутся одни и те же формулы.

• The formula for calculating the amount of the premium to be accrued is =C3 × (F3+G3). The planned bonus is multiplied by the sum of indicator 1 and indicator 2 for each employee.
• Salary - salary + bonus.

In order to evaluate the work of employees according to several key performance indicators, a matrix of the following type is compiled:


Figure 3. Worksheet form.

1. Key indicators A - private KPIs (.
2. Weights B - .
3. Base C is the minimum value of the indicator.
4. Norm D - planned level.
5. Goal E is the value to aim for. Above-standard indicator.
6. Fact F - the actual results of the work.
7. KPI G index - the level of the result in relation to the norm.

The formula for calculating the KPI index:

An example of filling in the matrix for an office manager is shown in the following figure.


Figure 4 Example of KPI calculation.
The performance ratio is the result of the calculation according to the formula (1).

How to implement a KPI system in an organization

As can be seen from the above example, the implementation of a motivational personnel management system based on key performance indicators does not require serious investments and highly qualified developers. Special training of personnel services specialists is not required - the ideology is simple and popular. There are many enterprises where semi-automated systems based on Excel function. The whole question is how effective is personnel management when using the considered technology.
As can be inferred from the example, the KPI system is best suited for enterprises with discrete production, for example, machine-building enterprises. For industries with a continuous process (for example, nuclear power plants, chemical plants), the main attention should be paid to the technological component of control, its reliability and safety. In this case, for example, it is impossible for an inspector of the labor protection department to formulate appropriate evaluation criteria related to the financial well-being of the enterprise.

To correct this shortcoming, it is possible to supplement the KPI assessment complex with a competency assessment subsystem. An example of a rather successful solution is the STP 001.089.010-2005 standard, developed at OAO Irkutskenergo.
OAO Irkutskenergo uses special forms to assess competencies, which are filled in by experts - the head of the assessed person and his colleagues. An example of such a form is presented in Table 1.
Table 1. Evaluation of an employee by competencies.

Experts assess the employee's compliance with the requirements of the position in points. In this case, the scales of the dictionary of competencies are used. Examples of scaling two competencies are presented in Table 2.
Table 2. Competence scaling.
Initiative

Ability to plan work effectively

KPIs are key performance indicators with which you can evaluate the results of the work of employees of various departments of the company. Based on them, employees are promoted up the career ladder or they are paid bonuses.

Relatively recently, company leaders 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 working specialties.

The main idea of ​​KPI (Key Performance Indicator - usually translated as "key performance indicator") is that it can be used to unambiguously and objectively evaluate the work and performance of any employee, group of people, department, project and company as a whole. The indicator will reflect the whole picture of the processes taking place in the company, using numbers.

The most important thing is to develop the right KPI for each position and enter real indicators. It is very important for an employee who encounters this concept, having received a job in a company, 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 the beginner to quickly understand what exactly the employer wants to receive, what results he expects from the employee. The KPI range will immediately show how much effort needs to be put in to achieve the desired level of wages, whether this work will be up to the applicant, or, conversely, his abilities will significantly increase the requirements and, accordingly, wages.

Scorecard

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

In large foreign companies, where everything is spelled out and detailed to the maximum, work on the KPI system is a great option for an employee. He understands how much, for what and when he will receive in excess of the salary. He has personal tasks and deadlines for their implementation, and the company can regularly monitor his work with the help of evaluation.

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 draws up lists of the most promising specialists for enrollment in the company's personnel reserve and promotion.

But if in foreign companies the head office helps in developing goals and indicators, then Russian employers act in a slightly different way. Some invite consultants, others do it on their own: KPI is prescribed by the HR Directorate. Since neither one nor the other thoroughly knows the specifics of the work of each particular specialist, it happens that the indicators are formulated inaccurately. It even happens with us that the most advanced, in quotation marks, organizations for the development of KPI involve managers and employees of the units being evaluated.

Types of indicators

There are some key performance indicators in the KPI assessment system: financial, client, process and development criteria.

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 external economic condition of the company as a whole.

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

Process indicators include indicators that grow along with the speed of various processes in the company: time to develop and launch new products on the market, processing a client's request; time spent on logistics and delivery of goods, etc.

Development criteria - KPI indicators that characterize the degree and level of development of the company itself (external processes of the company's development in the market and internal processes for the development of human resources): staff productivity, profit or administrative costs per employee, staff satisfaction level and its "fluidity".

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

Advantages and disadvantages

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

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

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

If the KPI scale is compiled incorrectly, there will be little benefit from it. If there are too many KPIs, the impact of each on the amount of the total bonus will be small. For example, initially there were about 20 percent of KPIs, but a year later they were reduced to five. Most of the indicators accounted for a small share of the bonus, and the 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 the unit did the work poorly or not quite qualitatively, without fulfilling the general plan, then all employees of the department can lose their salary at once. After all, personal KPIs are associated with key indicators of the entire department. In case of systematic non-fulfillment of planned indicators, an employee may be demoted or dismissed. Therefore, KPI forces you to always "be in shape and tone." Who can not stand this rhythm, leaves himself.

Another disadvantage is that not all employees can directly influence the company's strategic KPIs. When the bonus depends on net income and sales, the secretary or economist will not be able to influence it.

From experience, we can say that very often in Russian companies the KPI motivation system is one-sided: everything that an employee over-fulfills is just 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 of international companies believe that it is easier to describe the work of technical specialists (accountants, engineers, programmers) with a job description than to prescribe KPIs for them. We must not forget that the planning and calculations of this system take time. Heads of areas or departments at the end of each month spend time setting and calculating KPIs for all their subordinates. The indicators have to be coordinated with the HR department, and the main work of managers goes by the wayside, and after all, bosses have their own KPI.

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

Opinion 1:

Ludmila Shusterova, Deputy General Director of the outsourcing division of BDO

Original KPIs

KPIs are usually associated with either an increase in the profitability of the company and its turnover, or with an increase in productivity and efficiency in the use of capital assets. Based on these conditions, it is unlikely that it will be possible to draw up some fundamentally new and original KPIs. Unless, of course, the work is connected with something very non-standard. For example, you can put an increase in the number of koalas by n percent in the KPI for the head of a biological station. But for a typical manager, it is unlikely that it will be possible to invent something better than increasing revenue, margins, increasing customer satisfaction, or reducing staff turnover. It is desirable that there are several KPIs, but not too many. Indeed, in the pursuit of business and profit growth, it is important that both customers and staff do not suffer - and this is not a trivial task at all.

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

Opinion 2:

Dmitry Pelah, Director of the Financial Consulting Agency

Regulation on KPI

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

The regulation on the KPI system should establish a causal relationship of indicators with the main goals of the company and determine the level of responsibility for the values ​​​​of the indicators of employees to whom this system will be applied.

There is no standard form for a KPI statement, so a company can develop it on its own or seek help from specialized consulting firms.

Opinion 3:

Ivan Shklovets, Deputy Head of the Federal Service for Labor and Employment

Dismissal for low performance

The labor legislation does not contain such grounds for dismissal as a low indicator of efficiency. Therefore, the employer has no right to dismiss an employee with such a wording.

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

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

Pros and cons of using KPI to evaluate employee performance

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