Set your goals.
Without clear goals, performance indicators cannot measure progress because no one knows what they are progressing toward. Specific, clear goals for each area of the company from safety to sales to employee performance.
Attach numbers to each goal.
Giving concrete value to each goal provides specificity and gives the company clear, measurable objectives. How many new customers are necessary? How many safety violations must be avoided? How much money needs to be saved through cost cutting measures? “Increase profitability” is a vague goal; add $1 million in new sales is clear and measurable.
Track progress that has already occurred.
When key performance indicators are paired with specific company activities, it becomes easier to develop indicators that will measure progress toward future goals.
Take a close look at the current numbers.
Analyze the numbers in each area of review and determine the percentage of change that has occurred. Examining current numbers will help in developing effective goals for the future.
Decide how often the indicators will be reviewed.
Key performance indicators should be reviewed at set dates throughout the year; different areas will require different frequencies. For example, financial indicators may be reviewed monthly, but employee review indicators may only be reviewed annually.
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