Developing human resources KPIs to assist a company in achieving the organisation’s overall corporate strategy, I agree, is an integral part of any comprehensive HR management system. Problems tend to arise however, when the focus is more on the system and not on the people.

Shaping the desired behaviour amongst employees is achieved more effectively through strong leadership setting and supporting realistic standards and targets established through an appropriate consultation and communication process.

My experience has taught me that the development of any form of performance KPIs need to be developed from the bottom up rather than the top down to achieve the desired strategic operational outcomes.

Your question is related to sense-making. How a given KPI is understood by an individual? How dies he/she knows the relation between his/her work and the KPI value? Is it valuable for him/her to participate in KPI improvement?

It is also related to rewarding. KPI are often seen as management stuff: if KPI are good, they will receive a bonus; what about those who contribute? are they rewarded for?

Dear Anthony and Jean, Thanks for your useful threads. They do raise some very fundamental issues. Anthony's point is absolutely right that most organizations focus themselves on system rather than  people. This is despite the fact the there is a clear paradigm shift in leading organizations from systems, structure and strategy to people (i.e.  staff, style, skills, and shared values) as is revealed in  the plethora of literature on strategic HRM that has emanated the post 7-S framework of Peters and Waterman.  But most organizations still believe in direction and control rather than focusing on people and their competencies. Both of you have rightly, therefore, argued for a concerned leadership and appropriate communication structures and linkages in case behaviour improvement is needed through the KPIs route. There is a strong need for involving people concerned in developing KPIs too,

Two points for discussion concerning desired behavior:

- Do the task yourself, and you truly know how difficult/pleasant the task is perceived by others, i. e. use personal experiences to adjust the task.

- Explain why a task is important, e.g. results are quite unique 

Key Performance Indices are Performance metrics which drive the individual towards a Goal.

In our organization we have the goal setting as follows.

• Operational (Continuous basis, contributing to the Process output, immediate effect)
• Business (Project basis, contributing to the Process output, after a gestation period)

• Intrinsic Goals

One needs to generate KPI's taking into consideration the business strategy ( rather the desirable, expected behavior )and the current status of employees vis-a-vis the same. Once the required amount of bridging the gap is known the KPI's can be quantified

Dear Debi,

Yes, KPIs  can be used in measuring the desired behavior among employees.

"When an employee's goal is defined in terms of an organizational KPI, it ensures that what the employee is doing is well aligned with the goals of the organization. This is the critical link between employee performance and organizational success".

For more details on the subject you can look at the following link.

http://www.mindtools.com/pages/article/newTMM_87.htm

Thanks a ton, dear Marcel and Krishnan for your very useful threads. Marcel's points highlight involvement of people in the whole process, which facilitates greater usefulness of KPIs. The way goals are identified in Krishnan's organization shows that they have a comprehensive typology in mind, which gives due importance to various kinds of goals, which help a far greater clarity about the ideas underlying different types of goals. Great efforts!

Thanks dear Ramchandra and dear Mahfuz  for a still greater clarify that your posts have added to the discussion. The article you have attached, dear Mahfuz is an  interesting reading, and explains the linkages in a lucid and effective manner. These will be certainly helpful.

When looking at KPIs I would distinguish between input and output KPIs.

For example, if you measure (and reward?) sales people for the number of customers they visit, that is more than likely what you will get, lots of visits.

If however, you want high-quality visits that generate sales, perhaps you should measure and track sales and identify and stimulate the types of visits that end up generating sales. 

Dear Joeri, Your distinction between input and output KPIs is quite correct; and will lead to better understanding of the issues in their entirety. 

KPIs are "meta" indicators, whereas individual desired behavior is a "micro" optimum. How to rely a set of micro optimal values to a global optimal value? Can people in your organization be considered as independent variables? I'm not sure of that; quite often, a global optimum is not the combination of local optimums, it needs some kind of local adaptation to the context to reach some global optimum (resilience is one of those strategies).

Certainly the BSC can be the platform for performance monitoring and the KPIs will be the score checklist included within the perspectives. The KPIs to be considered should reflect the strategic goal and objectives of the company/organization, and to be cascaded down to the KPIs of each department, units and individual. The main challenge is determine whether and how much behaviour is contributing to OUTPUT and productivity which usually are the concern for performance assessment and monitoring.

I fully agree with you, dear Noor. Dear Jean thinks that I am meaning  individual behaviour in this question. Perhaps he is concerned about individual idiosyncrasies. When the alignment of HR strategy is done with business strategy, what is focused on is the culture capability in the organization that needs to be  focused on. And then, what is tried is to shape the behaviour of all organizational members that would help  promote the desired culture in the organization.

I would separate people from the planned business operations - apply the KPIs to the operations and targets and see people as the source of the innovations and actions required to achieve them or to suggest effective improvements. Hence, involve people in determining what kinds of skills they would need and then mutually assess their level of competency and any upskilling required. This takes away the tendency to treat people as objects that have to be 'polished' like an input or an output, as if they are a part of a conveyor belt system at play.

Dear Marieka, You have made a very useful observation about attending to the human needs in organizations. But I would add that metrics and KPIs are not necessarily anti-thetical to the employees' interest as humans. Even in transformational leadership theory, using metrics is considered as  part of leadership behaviour. 

To achieve such top positions with stringent standards requires

To have these we are conscious of our Resource Optimizations including people strength both in Quantity and Quality.

We have goal of making our organization as the leading foundry taking a place of AMONG TOP 5 in the world. In India we are the largest producer of Grey and SG Iron Castings catering to all the TRUCKS and TRACTOR manufacturing OEMs in India. Today any Truck or Tractor in India has atleast one component manufactured by us.

There are only 5 foundries in India which produce more than 1lakh tons of casting a year, But the global market is big and very promising.

All our Key Results are evaluated on Money / Time / Returns.

Dear Krishnan, Thanks for another very useful note from you. I can well understand the situation in the Indian context, which is labour surplus economy. In such situations, employers are bound to be less centric to people issues; they are less proactive on these matters. In manufacturing industry, even otherwise, market plays a big role in HR policy formulation. It is fit model of HR strategy that operates. HR department can be more proactive in service and IT industries. 

It would be apt if the KPI's are linked to a competency model (key behaviours that differentiate superior performers in your organization). A Balanced Scorecard would be a good option to link KPIs to organizational business strategies in case you do not have any competency initiatives in your enterprise - preferably a competency dictionary. I had proposed a variation of the BSC in my MPhil thesis - you may download the   

Article Measuring Organizational Intangible Assets - Human Capital

Thesis A MODEL FRAMEWORK FOR MEASURING ORGANIZATIONAL INTANGIBLE ASSETS

Hi Debi, there are KPI's that can be used for measuring employee behaviours. They are featured in the middle of this fairly comprehesive list that has been posted online

https://www.linkedin.com/pulse/article/20130905053105-64875646-the-75-kpis-every-manager-needs-to-know

However I guess for every organization it then comes down to how many KPI's should be and can measured across the board and will value be derived by allocating resources into this endeavour?  

In my opinion it is not so much a matter of can KPI's be measured but more a case of which ones should be and this seems to be a question that many organizations have to grapple with. NB In healthcare there is the thorny issue of KPI's becoming counter productive when all of the managerial effort is then directed towards meeting KPI's at the expense of other important work activities.

Dear Deborah, Your thread is excellent; and still more so the attachment which has very lucidly stated the 75 KPIs in all perspectives of the BSC. Interestingly, it even gives KPIs related to the henceforth-neglected  5th dimension of the BSC i,e, environmental dimension. 

Organizations use KPIs in order to highlight all aspects of perspectives in Balanced Scorecard.

“KPIs should allow broadcasters to do a number of things:

• Report past outcomes, both good and bad;

• Identify where improvements should be made and what resources are required to do this;

• Determine the quality and robustness of business processes; and

• Allow stakeholders to independently judge a broadcaster’s performance”.

For more information, you may refer to:

http://www.cba.org.uk/wp-content/uploads/2012/04/PerformanceMeasurementAPracticalGuide.pdf

Dear Mahfuz, thanks for your interesting and useful listing. They can be useful in building the desired culture that is warranted by the business strategy and the behaviour of the employees which needs to be reflected in all that they do so as to promote the desired culture. 

Organizations bring a conditioned behavior of employees towards its goal through KPI.That is the reason, during interviews we ask a question - "what are your Result areas and how is it quantified?". This can throw more light on their contribution and mastery of the work.

Probing into this one question will lead to various aspects of the person - work - organization.

https://www.researchgate.net/publication/308427094_An_Empirical_Study_of_the_Balanced_Scorecard_Model_Evidence_from_Bangladesh

Article An Empirical Study of the Balanced Scorecard Model: Evidence...

KPIs is the outcome of MBO (Management By Objectives) and somehow subjected to some criticism including Deming as it would cause stressful work environment in our people. 

On the other hands, it could be constructive when it determines targets and employees focus to achieve certain level of results as a motive to motivate them to be excellent at work.

Which factors could contribute to successful KPI's (1) the KPI's have to actually measure "on task" performance with a behavioral measure, resulting in quantitative data. (2) The KPI's chosen have to operationally be defined, so that they reflect the objective(s) making up the over all goals of the organization. These two suggestions is focused on the structural part of the system within the organization. Another aspect, to take into consideration is the workers (e.g., human aspect, people or individual's) making up the organization. (1) Make sure that the individual who are performing (on-task behavior) make direct contact with the KPI(s) which should be related to both immediate and deferred consequences. (2) The focus should always be to set up people for success! How can "on-task" behaviors obtaining high-performance (KPI's) be considered desirable by the individuals? One way is by recognizing that people value different things (attention, self monitoring own performance, having more choices, more influence, or to access time to work more or less on a specific task) this part should be emphasized when arranging for consequences in the working environment. The last step (3) would be to focus on the culture of the overall organization and within teams. The culture of the workplace should facilitate a positive working environment, where people want to spend their time and energy. A place where people want to be part of the high performance KPI's because they see value in it for themselves, as a group and as an important contribution to the goals of the overall organization. How do we do this? One way is by sharing information about goals, what current level of performance look like, how should it be and why, how does the future look like. People will care for the overall organization when they as individuals are empowered and encouraged to get engaged and involved by team members, leaders/supervisors and management. This is in my personal opinion, critical aspects to consider when developing successful KPI's or any other performance measures. This is a very simplified account though.

it depends on what behavior u need to measure?