Key Performance Indicators

This paper discusses the importance of applying key performance indicators (KPIs) for performance evaluation and how this affects teamwork in an organization. KPIs are techniques that used for evaluate employees’ performance based on their characters, deeds, and results that they achieve. KPIs are applicable in sales and marketing, supply chain management, public administration, customer relationship management and many more. The major purposes of using KPIs in performance evaluations are to reduce cost, to increase customer satisfaction, and to enhance process as well as company revenue. KPIs differ between commerce and business structures. Likewise, KPIs criteria also vary between industries. For instance, shipping and logistics industries

Effective performance results from good operational management. KPIs determine that how good the companies are in managing its’ operations. This includes developing business objectives and identifying specific internal processes that add value for clients and companies’ shareholders. By using KPIs, companies able to detect the results of employees’ performance closely. KPIs assist managers to focus whether there is development in staff’s productivity and division proficiency and to leverage product development, manufacturing, productions as well as

In order to obtain better results KPIs should be linked with measurable organizational process improvement instead of linking with companies’ financial performance. The human resource managers need to ensure that KPIs reflect the executive team, business unit team, and the support service team in organizations. Setting up benchmarks in companies is essential in order to implement right KPIs system as it plays crucial role in informing the teams’ improvement goals to the other team members as well as focusing on companies’ products, business practices and processes. Selecting both predictive and lagging indicators and using deliberate structures from well-designed balanced scorecards are best approach for applying KPIs in order to determine and develop team’s strategy. Implementation of pilot testing for KPI is necessary to ensure that companies apply appropriate KPIs system that user-friendly and convenience as well as to deliver high value for effective performance