Tips for Developing Individualized Key Performance Indicators

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.

How To Effectively Plan for the New Year

Establishing business goals early in the year is critical for businesses because goals set the course for the upcoming months. Planning is far more effective when informed by the past. Using some simple guidelines as you map out your company’s year will help you stay on track when unexpected events and nagging details threaten your progress toward your goals.

Think Long Term Considering where you want your company to be in one, three, and five years as you plan for the upcoming year will give you a global setting for your goals. Just as it makes sense to break large tasks into smaller ones, it is also effective to break your long term goals down into short term goals.

Think Short Term Your short term goals, whether monthly, quarterly, or annually, should act as reference points along the way toward realizing your long term goals. Having short term goals will provide your company with a clear path to longer term goals.

Make Your Clients or Customers Part of the Process Your customers are the most important source of information about your financial future. You probably don’t want to invite them to your planning meetings, but you should certainly consider the information they provide. In addition to using your sales numbers in the planning process, you may want to use surveys and questionnaires to learn more about what your customers prefer.

Ask Your Employees Management does not always have the same kind of contact with customers as other employees do. Including employees from every level of your organization in the planning process may reveal facets of the day-to-day operation of your company that you hadn’t considered. Additionally, when employees have a clear idea of the organization’s overall goals, they more clearly understand how their positions contribute to reaching those goals.
Track Your Progress Assessing progress at regular intervals helps in realizing goals. Regular assessment shows clearly whether a company is progressing toward its goals or has gotten off track. Regular assessment also provides motivation for your team as well as allows you to recalibrate as necessary.