What employees Need to Know about KPI
Job vacancies often include "KPIs". We try to explain what KPI is, what professions it requires and what employees need to know before agreeing to work for a company with such a system.
What is a KPI?
KPI helps to show the success of employees in numbers to accrue to each salary on merit. Employers who set key indicators know for sure that they do not overpay idlers, but face other problems: excessive competition in the team and lack of team spirit (if the success of each employee is measured separately, not the unit), inability to show work in numbers, demotivation of employees etc.
Key performance indicators are divided into:
late – it shows the result of the activity after the end of the period. These include, for example, monthly reports that allow you to see all the work done, the potential of the unit, but they will not show the effectiveness of the team at this time;
operational – show the situation in the company at the moment and allows to predict the results in the future. Such indicators make it possible to manage the situation within the reporting period to change the results of latecomers.
Who needs KPIs and why?
KPIs are now set for a variety of professions, from sales managers and financiers to designers and copywriters. All of them show the results of their activities in numbers. That is, if the sales manager reports on the number of profitable contracts and the income he has brought to the company, the copywriter on the number of written materials and its views.
With KPI, employees know exactly the amount of their work, can influence the amount of salary, and see their own contribution to the success of the whole company, they show work result and, in the future, it is easier for them to find achievements for resume. Employees of companies with a system of key indicators easily calculate the steps that will lead them to the desired result. However, working on this principle has its disadvantages:
- if there are too many goals the bonus is very small and as a result you may not receive the salary promised at the interview;
- often unscrupulous employers set unattainable KPIs and again you don't get the expected salary level.
That is, the main risks with KPIs for employees are related to unstable income or no income at all. So, before you accept a job offer where you are required to "achieve KPIs" check the employer.
What to watch out for:
- a large number of KPIs. It is recommended to set 3-4 key goals per month for one employee. Think about if there are many more.
- unclear weight of each of the indicators. The manager should clearly explain to you the importance of each of the indicators and set priorities.
- the company does not provide resources to achieve key indicators.
Working with KPIs is characterized by clarity and a financial reward that everyone receives on merit.