Key Performance Indicators (KPIs) are needed to measure how effectively a company, a group, or a team is achieving key business objectives. That said, as typically implemented, it is often doubtful whether KPIs really enhance performance: the article hyperlinked below explains why.

Article The Perils of Performance Measurement

KPI were till few years ago were mostly financial and quantitative।

Now KPIs are both financial nonfinancial and qualitative। For example carbon foot print, energy consumption

Besides conventional kpis you can add industry specific kpis। These can be country specific too। From point of view of great companies business excellence many kpis are used।

Balanced score cards cover major 4 areas।

Go through my paper on business excellence model। You will see how key performance parameters were designed across 8 major management functions

Components of the Balance scorecard may be developed apart from KPI indicators. KPIs (Key Performance Indicators) relate to the tools used by the organization to measure its performance, while BSC (Balanced Scorecard) depends mainly on four perspectives; financial, customers, internal processes, and learning and growth perspectives.

KPI is like health indicators in our body. It can stimulate some initiatives to improve your health. Still, the game changer isn't the KPI, but your initiative, supported by some other elements, such as culture, policy, procedure, habits, etc. The other KPIs mentioned above are the organization practice needed to enhance KPI implementation. Leadership, followership, and other management practices are the foundation for any system implementation in our organization.

Implemented in mobile wireless, healthcare, and higher education, KPIs are effective when they have causal relationships. Therefore, a BalSC-like framework is effective, as are the periodic reporting data and statistical causal relationships within a perspective and across perspectives. Performance targets and ownership of those targets are essential. Short term targets for current months, quarters. Long term targets for strategic plans.

In my opinion we can create key performance indicator base on of performance operational unit each activity.

I do believe that we can create some more Indicators apart from Key Performance Indicators or Key Success Factors. These indicators and factors vary from an organization to another.

There are quite a few KPI indicators that measure performance and productivity factors, since after adding the measurement of competitiveness and quality:

NPS: Net Promoter Score;

• CES: Customer Effort Score;
• CSAT: Customer Satisfaction Score;
• Tasa de respuesta;
• Tasa de abandono de cliente;

I think Steve Tarr hit it. If there is nota causal relationship, why bother?

Hi Mohammad,

Your question is very practice relevant. Very often the term KPI is just a buzz word. In some companies there are countless KPIs, so many that the employees and often also the managers do not know how to deal with them. As a result, the KPIs have lost their importance; no company can be controlled in this way.

I think we need to think about the original meaning of KPI's. When evaluating processes, it is important to define the key figures relevant to efficiency and results. This is a heavy work that must be done very carefully. In the process industry (e.g. chemistry), engineers and chemists learn to define, measure and use the relevant key figures. In the usual processes in companies (e.g. HR, purchasing, production, logistics, finance) you have a hard time with it. It's easy to say to yourself that a few more KPIs are always helpful. You quickly lose the overview and the real opportunities in corporate management.

So: It is very important to look at each individual important process and ask yourself: Which key figures can I use to control this process best and most reliably? That's a lot of work, but it's worth it. It is also important that the relevant people are involved in the definition and interpretation.

All the best & a happy, healthy and peaceful 2023: Hartmut

KPI with the K for Key denotes the performance metrics that are critical and important to the organization, based on its mission. Normally KPIs tend to be strategic and holistic. Other than that are performance metrics that complement the more strategic KPI, viz., the tactical or operational KPI, or what we call lower levels performance metrics. The key is to develop KPIs that "measure what they are supposed to measure, important to the organization."

Exactly Teay!