Kpi method what. KPI calculation in Excel examples and formulas. Definition of key indicators

KPI is a performance indicator that allows you to objectively assess the effectiveness of the actions performed. This system is used to assess various indicators (activities of the entire company, individual structures, specific specialists). It performs not only control functions, but also stimulates labor activity. Often, a remuneration system is built on the basis of KPIs. This is a methodology for the formation of the variable part of the salary.

KPIs Key Performance Indicators: Examples in Excel

The stimulating factor in the KPI motivation system is monetary reward. It can be received by the employee who completed the task assigned to him. The amount of the bonus / bonus depends on the performance of a particular employee in the reporting period. The amount of remuneration can be fixed or expressed as a percentage of the salary.

Each company determines the key performance indicators and the weight of each individually. The data depends on the objectives of the company. For instance:

The goal is to provide a sales plan for the product in the amount of RUB 500,000 per month. The key indicator is the sales plan. Measurement System: Actual Sales Amount / Planned Sales Amount.
The goal is to increase the amount of shipment in the period by 20%. The key indicator is the average shipment amount. Measurement System: Actual Average Shipment / Planned Average Shipment.
The goal is to increase the number of clients by 15% in a certain region. The key indicator is the number of customers in the enterprise database. Measurement system: actual number of clients / planned number of clients.

The spread of the coefficient (scales) is also determined by the company independently. For instance:

Fulfillment of the plan less than 80% is unacceptable.
Plan fulfillment 100% - coefficient 0.45.
Plan fulfillment 100-115% - coefficient 0.005 for every 5%.
No errors - coefficient 0.15.
There were no comments in the reporting period - the coefficient was 0.15.

This is just a possible way to determine the motivational coefficients.

The key point in measuring KPI is the ratio of the actual indicator to the planned one. Almost always, an employee's salary consists of a salary (fixed part) and a bonus (variable / variable part). The motivational coefficient influences the formation of the variable.

Let's assume that the ratio of the fixed and variable parts in the salary is 50 × 50. Key performance indicators and the weight of each of them:

Let's take the following values of the coefficients (the same for indicator 1 and indicator 2):

KPI table in Excel:

Explanations:

This is a sample KPI spreadsheet in Excel. Each company makes its own (taking into account the specifics of the work and the bonus system).

KPI matrix and example in Excel

A matrix, or agreement on goals, is drawn up to assess employees against key performance indicators. The general form looks like this:

Key indicators are the criteria by which personnel performance is assessed. They are different for each position.
Weights are numbers in the range from 0 to 1, the total of which is 1. They reflect the priorities of each key indicator, taking into account the company's objectives.
Base - the admissible minimum value of the indicator. Below the baseline - no result.
The norm is the planned level. What the employee must fulfill is mandatory. Below - the employee did not cope with his duties.
Purpose is the value to strive for. Above normative indicator, allowing to improve results.
The fact is the actual results of the work.
The KPI index shows the level of the result in relation to the norm.

Kpi calculation formula:

KPI Index = ((Actual - Base) / (Rate - Base)) * 100%.

An example of filling out a matrix for an office manager:

The performance coefficient is the sum of the products of indices and weights. An employee's performance score is clearly shown using conditional formatting.

KPIs are key performance indicators of a company or a specific department. In the article, we will consider examples of KPIs for various specialists and analyze how to develop and implement a system.

What is KPI

Key Pee Ai stands for Key Performance Indicators - Key Performance Indicators.

The KPI system is a reward system built on the basis of key indicators.

Working on such a system allows employees to better understand what they need to do in order to be effective. Moreover, efficiency means not only the volume of work performed by them, but also the benefit received by the company.

How to develop a KPI system

To create a Ki-Pi-Ai system in a company, you must:

Select a KPI model.
Define KPIs and assign responsibilities.
Create reporting.

How to choose a KPI model

There are many methods for defining and grouping indicators. In Russia, the classic approach is most often used, as well as the Balanced Scorecard (BSC).

The classical approach is based on the use of predominantly financial indicators such as; see figure.).

Drawing. EVA based KPI tree

Note that only financial indicators may not be enough to implement the developed strategy. The development of customer relations, personnel management, product quality, that is, those aspects of activities that are difficult to give a value estimate, are no less important for the business.

Within the framework of the balanced scorecard, four main aspects of the company's work are distinguished, which provide answers to the following questions:

how the company is evaluated by shareholders ("Finance");
how customers evaluate it (“Customers”);
how to improve the quality of activities ("Personnel");
what processes can provide a company with an exceptional position in the market ("Business Processes").

What to choose

Which approach to take depends on the level of the business. The classic approach is more suitable for small companies, since it does not require significant costs for hiring consultants and introducing an information system. In the future, it will be possible to refine the created classical system by including non-financial criteria in it.

Large companies should use a balanced scorecard, as it gives a more complete picture of the company's activities.

How to develop KPIs for finance staff

The editorial board of Sistema Financial Director has prepared motivation schemes and reports on the implementation of KPIs for employees of the financial department. Download and use in your company examples of ki pi ai for the chief accountant and other employees of the accounting department, employees, the budgeting department and other departments.

How to choose key metrics

To determine which KPIs to use, you need to:

Select groups of indicators and distribute the responsibility of managers of different management levels for each of the groups.
Make the most detailed list of KPIs used by management.
Select the criteria that most characterize the achievement of strategic goals.
Formalize algorithms for calculating each of the ki pi ai.

Allocation of groups of indicators

If a company uses a classic approach to developing a KPI system, then the following groups should be distinguished:

;

Responsibility for each of the groups will be distributed among the leaders of all levels of management. For example, the general director is responsible for the whole, while management should be transferred to the heads of departments.

When using a model that includes both financial and non-financial KPIs, the following groups of key performance indicators can be distinguished:

financial and economic - for business in general;
customer satisfaction;
main and auxiliary business processes (see how to describe them);
staff efficiency.

After identifying the main groups, it is necessary to determine who will be responsible for their implementation. For an example of the distribution of responsibilities, see Table 1.

Table 1. Indicator groups and distribution of responsibilities

Detailing

The list of ki pi ai for each of the selected groups should be as detailed as possible. Ask the managers who will be in charge of a particular group to make such a list. For example, the CEO should indicate what criteria he uses to assess “satisfaction of shareholders (owners)”.

As a result, several hundred criteria can be included in the general list of KPIs. Obviously, the construction of such a system is unjustified, since it will lead to a significant increase in the workload on personnel associated with the collection and processing of data required for the calculation. Therefore, from the general list, you need to select those data that are really needed by management for management and will allow you to assess the degree of achievement of the set goals, and not just be monitored "for information."

KPI selection

Form an expert group to select a KPI. As a rule, it includes directors of departments and heads of departments. Their task is to characterize each of the indicators according to the following criteria:

whether it reflects the degree of achievement of the company's strategic goals;
is it understandable, first of all, to those managers who will have to make a decision on its basis;
whether it is useful for making decisions.

In addition to those listed, other criteria can be applied, for example, the ability to use performance indicators in planning or analysis.

The assessment procedure can be formalized based on the use of a scoring system. For example, 1 point - the criterion is not met, 2 points - partially meets the specified criterion, 3 points - satisfies the specified criterion. The indicators that received the highest number of points in the course of the peer review will be included in the Ki-Pi-Ai system.

As a result, a “short” list of key performance indicators of the company will appear (see table 2).

table 2. Example of a ki pi ai trading company(fragment)

KPI group	Key performance indicators	A responsibility
Satisfaction indicators
Shareholders	Return on total assets, return on equity, return on sale or rate of return, return on cash flow	General manager
	Sales market share, number of defects in products, number of customer-buyer claims, turnover of active customer-buyers, duration of the functional order execution cycle, availability of stock for buyers
Staff	Depending on the specifics, as well as on the information needs of managers, management reporting can be formed in a wide variety of analytics (by brands, product groups, personnel categories, types of assets, distribution channels, etc.). Conclusion In the process of creating a KPI system, you will have to face various problems: resistance from employees, the need to adjust accounting policies for the purposes of accounting and management accounting; ensure the collection of the necessary data to calculate the selected key performance indicators; etc. However, organizations that have implemented KPIs, as a rule, achieve good results, since the company creates a system of performance indicators that is understandable to management, and responsibility for management is delegated to a wide range of managers. After the implementation of the KPI system, it is important to constantly analyze its relevance, since business processes, strategic goals, and the external environment may change in the company, so some indicators may lose their relevance, while others may lead to unplanned results.

KPI-based personnel are gaining popularity in Russia. The main advantages of such mechanisms are in the rational reflection of the activities of companies.

KPI: what is it

KPI (KPIs) is an English abbreviation for “key performance indicators”, in Russian it is referred to as KPI - key indicators (sometimes - parameters) of efficiency. But in the original foreign sound it is used as a norm. KPI is a system that allows you to evaluate the performance of the company's employees in terms of achieving goals (strategic and tactical).

“Key indicators” allow a company to analyze the quality of its structure, its potential in solving problems. On the basis of KPIs, a system is also formed, the most important factor: if there are no targeting signs, then there is nothing to apply "key indicators" to. and KPIs are thus two interrelated phenomena. The first implies, first of all, forecasting the results of work, as well as planning how these results will be achieved.

Who came up with the KPIs?

History does not give an unambiguous answer to this question, however, one can trace how the world management went to understand KPIs, what it is and how it is useful. In the late 19th and early 20th centuries, sociologist Max Weber determined that there are two ways to assess the work of employees: the so-called "sultan" and meritocratic. According to the first, the boss ("sultan"), at his discretion, assessed how well a person copes with his duties. The rational beginning here plays a secondary role, the main thing is a purely emotional perception of the work of a subordinate.

The meritocratic method is when the results of labor are assessed by real achievements, with the use of objective measurement mechanisms. This approach was adapted by management theorists in Western countries and gradually crystallized into what we know as the KPI system. An important role in the systematization of rational assessment of personnel performance was played by the works of Peter Drucker, who is believed to have turned management into a scientific discipline. In the concepts of the scientist, it is directly stated that there are goals, and there is an assessment of the degree of their achievement through key performance indicators.

Pros of KPIs

The main positive side of the KPI system is the availability of a mechanism for assessing labor and the work of the enterprise as a whole, transparent for all employees of the company. This allows the bosses to evaluate the performance of all subordinate structures in real time, to predict how tasks will be solved and goals achieved. The next plus of the KPI is that the management has a tool for adjusting the work of subordinates if the current results lag behind the planned ones.

If, for example, the results of the performance measurement in the first half of the year reveal that the effectiveness is not high enough, then workshops are held to identify the reasons and motivate employees to do better work after the next six months. Another positive side of KPIs is the feedback between the specialist and the manager. The first will receive not just instructions and sometimes seemingly biased nagging, but well-grounded remarks, the second will improve performance by specifying errors and shortcomings in the work performed by subordinates.

Cons of KPIs

The results of assessments within the framework of KPIs (performance indicators as such) may not be interpreted quite correctly, and this is the main drawback of this system. As a rule, the likelihood of such a problem arising is the lower, the higher the attention is at the stage of forming criteria for how to evaluate the performance parameters. Another disadvantage of KPI is that a company, in order to implement this system, will have to spend a lot of resources (calculated, as a rule, in time, labor and finances). This, of course, is about working on the key parameters of the effectiveness of the proper level of elaboration. There is a chance that it will be necessary to carry out a large-scale retraining of employees: specialists - for changing tasks, and therefore working conditions, while management will have to master new methods of assessing the work of subordinates. The firm may not be ready to give the team extra time to master the innovations.

Subtleties of KPI implementation

The main task in the implementation of the KPI system ("from scratch") is to prevent negative attitudes towards it on the part of employees. Therefore, the management of the company must clearly convey the meaning and practical benefits of innovations to each of the subordinates, whose work is subject to subsequent evaluation for efficiency. The best technique here, according to some HR experts, is an individual presentation, explaining to specialists in specific positions: KPIs - what it is and why implement this system in a company.

An unconditional imposition of efficiency parameters in an orderly manner will be a mistake, but a necessary step is an appeal from the top officials of the company. If, for example, a line manager informs subordinates in his department about the imminent implementation of KPIs, then this information must also be confirmed by the CEO. The specialist must understand that the system of key performance parameters is not an invention of the boss, but an element of the strategic policy of the entire company.

Optimal timing of KPI implementation

Among experts, there is an opinion that KPI indicators, if we are talking about a system, should be implemented at the same time at all levels of company management - from ordinary specialists to top managers. According to this point of view, the timing of the implementation of key performance parameters cannot be extended over time: the system starts working immediately. The only question is how to optimally choose the moment of its launch. There is a point of view that it is enough to notify employees about the fact of the KPI start approximately three months in advance. This turns out to be enough for the firm's staff to study the specifics of the future assessment of the effectiveness of their work.

There is also a thesis that for some time the KPI can work in parallel with the previous payment system. Depending on the degree of liberalism of the bosses, the employee will be able to choose himself in accordance with which scheme he will be paid his salary. You can completely motivate a person to work according to the new KPI through bonuses and bonuses, the conditions for obtaining which will be clearly spelled out in the key parameters.

Stages of creating a KPI system

Actually, as such, the introduction of KPI mechanisms is preceded by several stages of preparatory work. Firstly, this is the period associated with the formulation of strategic goals that are set for the company. Within the framework of the same stage of work, the general concept is divided into tactical areas, the effectiveness of which is to be measured. Secondly, it is the development of key performance indicators, the definition of their essence. Thirdly, this is the work on the distribution of official powers associated with the implementation of the system, so that each responsible person asks a question like "KPIs - what are these?"

Thus, all indicators will be assigned to specific individuals (departments) in the firm. Fourth, it may be necessary to adjust the current business processes (if required by the updated strategy). Fifthly, this is the development of a new system for the creation of formulas for calculating salaries according to new criteria. After completing all the above procedures, you can start the KPI system.

KPI requirements

As mentioned above, KPIs are key performance indicators that are inextricably linked to the goals of the company. The quality of targeting development is the main requirement for the KPI system. Goals can be formed according to different principles, but one of the most popular in the HR environment is the SMART concept. Stands for “specific”, “measurable”, “achievable”, “relevant”, “time-bound”, and, as a result, resulting in worked out and quality KPIs.

Examples of goals that meet these criteria: “open measurable outlets (specific) in a city (relevant) in the first quarter (time-bound)”, or “sell so many air tickets to a certain country for three weeks". Each goal should be divided into tasks, which, in turn, are reduced to the level of personal KPIs (for employees or departments). The optimal number, according to some experts, is 6-8.

KPI automation

One of the factors for the successful implementation of KPIs is the technological infrastructure. Since KPIs are a set of rational metrics, a computer will do very well with them. There are many software solutions for managing KPIs. The possibilities available in such distributions are quite extensive. First, it is a convenient presentation of information (in the form of graphs, analytics, documentation) about the processes associated with KPIs. What does it do? Mainly, the consistency of data perception, reducing the likelihood of misinterpretation of numbers. Second, the collection and calculation of performance indicators. Thirdly, this is a multidimensional (with very large volumes of figures) analysis, which will be difficult for a person without a program. Fourth (in the presence of a network infrastructure), this is the exchange of information between individual employees and the establishment of feedback channels "boss-subordinate".

The ultimate and often the only purpose of the commercial activity of an individual entrepreneur or organization is to make a profit. The more it is and the less effort you have to spend to get the result, the better; but how to achieve acceptable performance? Emotional motivation of staff and viewing are not bad, but not universal and not always working methods: both a novice entrepreneur and an already experienced businessman should not only plan for future achievements, but also evaluate current ones.

One of the ways to assess the profitability of an enterprise and the “usefulness” of employees is by introducing KPIs, or key performance indicators. How to implement and calculate KiPiAi and how the remuneration of subordinates may depend on it - in the following paragraphs.

What are KPIs?

Like most modern marketing theories and systems, KPI is not a strange English word, but an abbreviation derived from the phrase key performance indicators. The word key in this case can be unambiguously translated using the adjective "key"; performance is, depending on the desire of the translator, "productivity", "efficiency" or "efficiency"; indicators - actually, "indicators" or "indicators". Each of the translation options has the right to exist, however, in the Russian-speaking environment, “ key performance indicators", Or simply KPIs.

What are KPIs for?

As follows from the decoding of the abbreviation, KPIs will be useful to an entrepreneur, director or head of a department to assess the effectiveness of work: his own, employees of a particular department or the entire organization as a whole. The indicators most often have a quantitative expression (how to calculate the KPI will be discussed below), but they can also be qualitative: it all depends on the working conditions and the goals set.

The results of the calculation or assessment of the achieved KPIs can (at the decision of the businessman) affect the remuneration of staff, the payment of incentive benefits and the conduct of motivating events. At the same time, of course, one should not forget about the current legislation: no matter how horrific the KPIs of a particular specialist, this cannot cause non-payment or untimely payment of the salary due to him in accordance with the terms of the employment contract.

To understand what KPIs can be useful for in a particular situation, consider a simple example. Let it be a small retail outlet that sells elite processed cheese and shoe polish. The staff includes a store owner and seven account managers.

Key performance indicators (and, as you might guess, there may be several) for each of the managers can be elected:

the percentage of successful transactions (the ratio of real and potential buyers, expressed in shares or percentages);
the average purchase price (average bill) of the client;
fulfillment of an individual or a single sales plan (as a percentage or a fixed amount, up or down from a given one);
the share of satisfied visitors with the service (by several indicators, based on a completed questionnaire or assessment in points).

Regularly (usually once a calendar month) receiving and processing the relevant information, the outlet owner will be able to assess the effectiveness of the team as a whole and regulate it by increasing the salary and assigning bonuses to the most successful employees and dismissing or motivating negligent managers with the right words.

Index classification

There is no single classification of KPIs: everything, as usual, depends on standard and attendant circumstances and the interest of the entrepreneur. KPIs, like most other marketing tools, are flexible and can be easily customized for specific needs.

By time

One of the most common classifications of KPIs is temporary. As you know, key indicators do not have predictive use, and therefore can only be:

Prompt, or advanced. They are calculated in real time and help to understand whether production or creative processes are going in the right direction, whether there is a demand for manufactured products (especially if they are new) and whether buyers (visitors, clients) are satisfied with the service and quality of the goods. Final conclusions based on operational KPIs alone cannot be made, but it is possible and even necessary to slightly adjust the situation in the right direction.
Final, or lagging. They can be calculated only ex post facto, based on the data received. Based on the results of the calculations, the head of the enterprise or department can choose ways to further increase productivity and profitability: increasing the pay of distinguished employees or the entire department, if the collective indicator is taken into account, moving individual workers to other areas, increasing or decreasing the planned load, and so on.

By mass

The second classification is by mass. Key performance indicators can be:

Individual, that is, referring to only one employee;
Collective- for example, for one department, workshop or subdivision;
Common- for the entire enterprise.

Each of these types can be, depending on the circumstances and the method of application, useful, not of particular importance, and sometimes even inhibiting the work of the company, therefore, when working with KPIs, a manager should not be limited to only one tool, and also completely succumb to the influence of modern systems of determination. efficiency.

According to the selected feature

The third, most extensive classification is based on a selected feature, around which key indicators are built. You can name as many such signs as you like; the most common are:

Performance. In general, this is the ratio (in quantitative terms) of the effort expended and the results achieved. For example, if to obtain the output of products sold by a plant for 1000 rubles, you need to invest in the amount of 1500 rubles, including man-hours, depreciation of equipment and electricity costs, the enterprise, even without making calculations, can be called inefficient. If the total costs are kept at the level of 500 rubles and can be further reduced, the efficiency of the plant is obvious.
Expenses. A narrower indicator that allows you to assess the growth or decrease in the organization's expenses for the reporting period (usually a calendar month). After receiving the reporting information, it should be processed and the KPI calculated - only then it makes sense to talk about the growing unprofitability or profitability of the company.
Result. It is not always the profit received by the company or other material benefits. The result can be considered the release of a certain number of units of products, an increase in the number of regular customers and even a decrease in the level of theft of fountain pens in the office. Performance KPIs are calculated fundamentally in the same way as other KPIs, and in exactly the same way can influence the production score.
Environment. The profitability of the company, as much as the leader wants it, depends not only on the efforts of the employees. External factors will inevitably interfere in the matter: rising prices for raw materials, falling interest of the target audience, new surprises from the legislator, and so on. It is difficult to predict them with sufficient accuracy, so all that remains is to analyze and, based on the obtained values, make management decisions - for example, start looking.
Process. KPIs of the process can be (for the reasons described above) only operational, otherwise they turn into key performance indicators of the result. Research is carried out directly during work, KPIs are also calculated immediately; on their basis, the leader decides whether it is worth adhering to the initially chosen line or whether it is necessary to adjust the course.

Important: KPIs can also be classified based on the components included in the calculation. In this case, it is not so much about the final factors as about the methodology of research and computation.

The components used in determining the values of key performance indicators include:

income;
net profit;
the cost of goods produced or services rendered;
the ratio of products of proper quality and the total amount of products;
volume of current assets;
amortization rate;
the cost of funds;
average material consumption per day, week or month;
amount of work in progress;
amount of unspent materials;
labor productivity of employees;
the cost of repairing production equipment;
the number of finished products in the warehouse;
sales of products.

All these components can be combined, used separately or completely abandoned by switching to other methods of calculating and assessing KPIs.

Pros and cons of KPIs

Like every marketing research tool, the KPI has its own advantages and disadvantages. They manifest themselves in different situations in their own way: sometimes the introduction of KPIs in production does not bring anything but advantages; sometimes - leads to an increase in losses. Most often, there are "medium" options; then the entrepreneur must, independently or with the involvement of specialists, weighing all the pros and cons, make a decision to continue using key performance indicators or to switch to other technologies for assessing productivity and profitability.

The undoubted advantages of KPIs are:

The ability to motivate employees. Usually, when implementing KPIs, the remuneration of specialists is directly dependent on the success achieved, which encourages staff to work more efficiently than before. A distinguished person not only gets b O the largest amounts, but also serves as a positive example for the rest of the employees, who, also wanting to increase their level of material well-being, are guided by a successful colleague.
Fair, unbiased and transparent assessment of work. No subjective factors affect the values of key performance indicators of an individual employee, department or the entire enterprise as a whole. For calculations, one general formula is used, and any employee can, if desired, check his result by performing simple mathematical operations, as well as compare his KPIs with the indicators of colleagues and understand what exactly he is doing wrong.
Possibility of adjusting the behavior of the research object. Actually, key performance indicators are needed in order to draw conclusions based on the research conducted and take measures to correct the unfavorable situation of the enterprise, maintain the current level or increase productivity and profitability.
Unbiased control of certain aspects of the organization's work and the involvement of employees in the overall production or creative process. Everything is obvious here: if the remuneration of each of the employees, the entire shop or department directly depends on the calculated KPIs, they will by default be interested in jointly achieving the result, and it will become much easier to control their efforts than if they were divided by interests without the possibility ( and desires) to interact effectively.

Cons of KPIs:

Lack of a one-size-fits-all approach. The KPI system is flexible and diverse enough, but it is not suitable for all cases. And if the rejection of quantitative assessments in favor of qualitative ones is envisaged and quite acceptable, although it inevitably leads to an increase in the subjective component, then for some departments of the enterprise, for which the speed of response to the current situation is more important than achieving specific results (for example, on IT), the introduction of key indicators efficiency can be extremely negative - and therefore slow down the growth of profitability of the entire organization.
The need for scaling. You can't just implement a KPI system based on advice from the Internet. It is extremely important to think over all aspects - from the "massiveness" of KPIs (they will be calculated for each employee or for the department as a whole) to the regions of application: as mentioned above, the transition to key performance indicators does not always increase labor productivity.
Lack of positive motivation. This is more a flaw in the management policy than in the KPI system, but the connection is obvious: if an employee knows that for all achievements he will simply receive the salary he is entitled to, and for the slightest lagging behind the established norms he will lose a monthly bonus and earn a reprimand, he (if possible ) will prefer to work for a more adequate employer, and in her absence, will begin to sabotage the activities of the company. Thus, without properly thinking through the system of rewards and punishments, the manager runs the risk of losing competent specialists or facing previously unseen and initially unexplained losses.
Complete demotivation of the staff. If the owner of a plant or company sets deliberately impracticable goals for employees (for example, to increase the number of manufactured products from 100 to 10,000 pieces per month), he should be ready for a response. Some employees will simply quit, realizing that it is impossible to solve the task at hand; others, as in the previous example, will refuse to comply with the inadequate requirements of management, at best maintaining production profitability indicators at the same level.
Difficulties in implementation. Not all employees, especially those who have been with the company for a long time, will be enthusiastic about innovations; some of them, without understanding and not seeing the advantages of KPIs, will quit; someone will continue to work "on the knurled", not particularly caring about the achievement of the set goals; there are also understanding people who will become the core of the transformation, but since their number is usually minimal, you should not pin all your hopes on such leaders.
Possible distortions in assessing the quality of workers' labor. KPI is a composite system that, as a rule, includes at least three components. Consequently, if mistakes are made in the development of the technology for assessing labor, a specialist who has not coped with the most insignificant task runs the risk of either being left without a bonus at all, or getting it in the minimum amount, which, as usual, will affect both the productivity of the enterprise and its profitability. ...

Advice: it is difficult for an unprepared person to understand the principles of operation of key performance indicators, and even more so to prepare an enterprise for their implementation. Therefore, if the result is urgently needed, and the realization has not yet come, it is recommended to contact a specialist (marketer or economist) who will develop a rating system and draw up an action plan or tell the entrepreneur in which direction to move, and, if necessary, will help.

How to calculate KPIs?

As already mentioned, each of the key performance indicators is usually divided into several components, which are expressed in shares and can be conventionally called indices. The sum of the shares must be equal to one or, if percentages are used, 100%. You can calculate each of the current indices using a simple formula:

KPIт = KPIи × (Рф / Рз), where

KPIт- current, or current, KPI index;

KPIs- original index;

Rf- results in quantitative terms, achieved during the reporting period;

Rz- the planned results in quantitative terms.

Let's look at an example. Let three components be selected for one of the KPIs, the first of which is 0.30, the second is 0.55, and the third is 0.15. Over the past month, the following results were achieved for each of the indices (in arbitrary units):

for the first: actual - 185, expected - 180;
for the second: actual - 65, expected - 70;
for the third: actual - 500, expected - 350.

As a result, we get the following:

The first KPI will be: KPItp = 0.30 × (185/180), that is, 0.31, or 31%.
The second KPI will be: KPItv = 0.55 × (65/70), that is, 0.51, or 51%.
The third KPI will be: KPItt = 0.15 × (500/350), that is, 0.21, or 21%.

Thus, based on the calculations of the current KPI indices, it can be concluded that over the reporting period, an employee (department or company) began to perform better on the first and third points (0.31 versus 0.30 and 0.21 versus 0.15) , but in the second, his success clearly decreased (0.51 versus 0.55)

At the same time, the overall value of the efficiency indicator for the past month was: 0.31 + 0.51 + 0.21, that is, 1.03, or 103% percent, which indicates at least a small, but still an increase in productivity and profitability.

Important: the total value of the KPI indices for the reporting period, in contrast to the initial one, can be more than one or 100% - this is a sign of increased labor efficiency. If the amount is less than or equal to 100%, one should speak, respectively, of short-term stagnation or gradual decline. Both are not critical, but require corrective measures - and the sooner they are taken, the better for both the businessman and employees.

Depending on the type of activity of the employee or department, it makes sense to calculate the KPI based on the following indicators:

For specialists in the sales department (marketers, managers) - the volume of successfully concluded and completed transactions.
For employees of the accounting department - the number of payment transactions, actual and planned.
For specialists of the legal department - the number of concluded contracts, real and approximate.

Advice: you should not try to build your KPI system only based on the experience of other companies. What came up in one case (and in due time) may turn out to be unacceptable in another. Therefore, instead of adjusting the mechanisms to the standards taken from nowhere, it is better to spend a little effort on fine-tuning them: this way it will be possible not only to keep the nerves and good mood of employees, but also to increase their productivity, which is the ultimate goal of introducing key performance indicators.

Features of KPI implementation

Each enterprise, even one operating in a long-established niche, is unique in terms of the quantitative and qualitative composition of personnel, the management methods used, the main mission and additional goals and other parameters, and therefore it is impossible, without giving specific examples, to describe the features of embedding the system of key performance indicators into the business.

As an example, we will consider a medium-sized company engaged in distance selling using its own online store.

The first stage of KPI implementation is the definition of assessment criteria and the selection of "experimental". These can be both individual employees (but then in the future, KPIs should be applied individually), and entire departments. Since the company in question is narrowly oriented, it would be more logical to choose several managers for the experiment (of course, with their consent).

The second stage is the development of new documentation. Depending on the size of the organization and the characteristics of management, these can be memos, job descriptions, employment contracts, or orders from management. The employees participating in the experiment must be familiarized with all these papers: under the signature, if it comes to documents, or in fact, if these are simple instructions and reference books.

The third stage is preparation and education. Despite the fact that the documents have already been read and signed, employees will not be able to immediately start working in a new way. They need to undergo appropriate trainings, get additional explanations, and also clearly understand that now their remuneration will directly depend on key performance indicators, and not on other incidental factors or conditions of a previously concluded contract. You should not rush to the next stage: the more time the employer agrees to spend on instructions and consultations, so, as practice shows, his subordinates achieve the best result in the future.

The fourth stage is the receipt and processing of the first results. Typically, a month is selected as the reporting period; less often - a quarter. Let the indicators of one of the managers for the past month be equal:

the first index (the number of sales) - 0.36 versus 0.30 of the original;
the second index (repeated calls) - 0.41 versus 0.45 of the original;
the third index (attracting new buyers) - 0.29 versus 0.15 of the original;
the fourth index (positive reviews about the online store) - 0.12 versus 0.10 of the original ones.

Then, in total for the reporting period, the employee showed efficiency (0.36 + 0.41 + 0.29 + 0.12), or 1.18 (118%), which clearly indicates the high productivity of his labor. Based on the data obtained, you can write out material incentives to the distinguished employee. There are many models for calculating motivating payments at the end of the month; below are two of the simplest and most popular.

First model presupposes the allocation of fixed (unchanged) and variable parts in wages. The first, as you might guess, does not depend on KPI; the second - it depends on the percentage. So, if the fixed part of the manager's salary is 20,000 rubles, and the variable is 15,000 rubles, then, having fulfilled the plan 100%, he would receive 35,000 rubles. Since the indicator of its effectiveness was 118%, for the month the employee is entitled to: 20,000 + 15,000 × 1.18, that is, 37,700 rubles, which is 2,700 rubles more than planned. On the other hand, if the manager fulfilled the plan by only 96%, he would receive according to the same scheme: 20,000 + 15,000 × 0.96, that is, 34,400, which is 600 rubles less than planned.
Second model involves recalculation of bonus payments based on the table of coefficients, for example, the following:
- if the KPI is less than 70%, the multiplier is 0;
- if the KPI is from 70% to 80% - 0.65;
- from 80% to 90% - 0.75;
- from 90% to 94% - 0.85;
- from 95% to 97% - 0.95;
- from 98% to 100% - 1.00;
- from 101% to 104% - 1.25;
- from 105% to 108% - 1.35;
- from 109% to 110% - 1.45;
- above 110% - 1.50.

Finally, the final stage of KPI implementation is processing the results, identifying errors (for example, neglecting external and biased factors) and scaling the system to the entire enterprise as a whole or to selected departments. In the future, it will be necessary to collect statistical data from time to time and adjust the program, but if the key performance indicators "take root", most likely they will not have to be canceled.

Summing up

KPIs, or Key Performance Indicators, are used to measure the productivity and profitability of an enterprise or the performance of individual employees. Indicators can be leading and total, mass and individual, and also refer to costs, results and other parameters.

You can calculate KPIs using a simple formula using real and planned values for the reporting period. Based on the results of the calculations, the employee or the entire department is assigned an increased bonus or the stipulated one is reduced. KPIs should be introduced gradually, not by integrating the system into all production processes at once, but by choosing several objects of research and observing the ongoing changes.

To stay afloat and generate profits, a business must operate at maximum efficiency. Just two decades ago, no one thought about how effectively a particular company, manager, manager or locksmith works. The main thing is that it is profitable. But now the approach has changed. You've probably heard about key performance indicators KPI. What it is and what is such a system for? Let's take a look at this in this article.

KPI - what is it?

The efficiency assessment system appeared in Russia literally five years ago and is still used in few places. It is mainly used in IT and other modern industries. Let's consider, what is KPI and what is this rating system for.

KPI - a key indicator of the effectiveness of personnel or an enterprise

KPI stands for Key Performance Indicator, which translated into Russian means a key performance indicator. This system is a set of several indicators that assess the performance of each employee in the enterprise. Knowing the KPIs for different groups, you can develop average performance indicators and introduce a system of active motivation for productive employees.

Note:efficiency is a relative measure. It can be calculated both for a specific employee and for a department, workshop, enterprise. Effectiveness can be quantified.

It is believed that the optimal KPI for an employee should be no higher than 5. The KPI can be divided into several types:

By cost item (how much resources were spent in monetary terms).
By productivity item (by what percentage the capacities were loaded).
By the item of efficiency or the ratio of indicators (for example, the ratio of the amount of revenue to the amount of costs).
According to the final article (general quantitative indicator of productivity).

KPIs must be expressed as a specific number. They shouldn't take up a lot of time or resources. It is best to tie the metrics to the overall performance of the company.

In practice, it often happens that most of the indicators are intertwined with each other. This allows for teamwork and assessment of a group of specialists or departments, motivating them and constantly achieving better results. Managers and bosses of all levels should monitor the result, coordinating their actions for maximum efficiency.

KPI is divided into strategic and current

KPI types

Indicators of the efficiency of the enterprise are of two types:

Strategic. Thanks to this data, you can find out how efficiently the company operated for a certain period (the longer the time period, the more accurate the result). Thanks to strategic indicators, you can build action plans for the next period of time. Basically, the strategic KPI shows the flow of cash flows, on the basis of which the profitability of production and sales can be calculated.
Operational. These data show the real current situation in the company, division, department. Thanks to these values, it is possible to adjust the tasks or goals of the enterprise to dynamic conditions. According to this KPI indicator, you can evaluate the efficiency of logistics, organization of production, sales of manufactured goods, etc.

Why is all this needed?

With the help of the KPI system, it is possible to realistically assess and measure the rate of achievement of goals and tasks assigned to a specialist. By calculating all the values and indicators, you can evaluate the performance based on the results achieved and compare them with the planned ones. You can also calculate whether the target figures for the specialist / department / company have been correctly calculated and drawn up. Numerical values help to correctly build a strategy and tactics for the future, assessing the real result, and not the imaginary one.

Note:the key indicator is tied solely to the result. If some parameters do not affect it in any way, then they can be freely thrown back.

The KPI was developed based on two ideologies:

Target management of an organization or department (movement from goal to goal).
Full control over the set goals and their revision under certain conditions.

By calculating KPIs, you can competently motivate staff

The very idea of KPI allows not so much to assess personnel, but to draw up realistic plans and foresee the results of the enterprise's activities. It is beneficial for everyone: ordinary employees are engaged in turnover, while striving to complete the tasks assigned to them, and not be diffused and delayed the result. Criteria for evaluating the performance of other personnel allow him to motivate: the more tasks are completed, the higher the salary or bonus. It is beneficial for managers when tasks are solved on time, and not scattered among employees. the enterprise is profitable because it makes a profit and can make realistic plans for the future based on numerical values, not empirical ones.

At the moment, the KPI system is considered the most accurate and profitable. It allows you to motivate and stimulate personnel and evaluate the performance of managers at any level.

KPI in production

Consumption of raw materials per day.
The volume of raw materials in warehouses and in work in progress.
Real labor productivity.
Storage costs of finished products.
The amount of other expenses.
The required amounts for the repair and maintenance of equipment.

KPI in trade

To calculate KPIs in sales, you need to know:

Revenue volume.
The real cost of production.
Total sales profit.
Possible percentage of rejects.
The total cost of the products in stock.
The total amount of the current asset.

Be sure to use a KPI for planning and strategy development

Examples of KPIs

In order to understand, we give examples of key performance indicators KPI for various categories of employees.

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