Are You Making These Common KPI Mistakes?

September 24, 2015

What do you think of when you hear “KPI”? Do you think of a magic goal or number created by someone who has never held your job, that is meant to improve performance but what it really does is make you want to pull an Office Space on the closest piece of office equipment? Yeah, that’s how most people feel about KPIs.

Don’t get us wrong, businesses have to have a system in place to measure and improve performance, but we see a lot of them making the same mistakes with their key performance indicators. Are you guilty of these super common KPI mistakes?

Are You Setting Too Many KPIs?

As organizations grow, the departments within them create their own KPIs, those are blended with manager imposed KPIs and then of course you have seasonal KPIs, industry standard KPIs and then there are the KPIs that you’re still tracking because, well, that’s how it’s always been. Before you know it, an individual worker will have 57 KPIs.

Please remember, it stands for Key Performance Indicator. There is simply no chance even half of those can be categorized as “key”. Take a step back, figure out what ideal performance looks like in a given position, figure out what factors drive that success, and measure those drivers. Experts say that more than 10 KPIs will result in lack of engagement and unintended consequences because of the mutual exclusivity inherent with too many KPIs.

Are Your Setting KPIs That Can Be Accurately and Objectively Measured?

Nothing will tick off a staff quite like a KPI metric they don’t trust. What can we mean by that if we’re sticking with numbers? Numbers don’t lie. Well, here’s a “for instance” that we came across.

A restaurant implemented a customer satisfaction survey and used the results as a KPI for the staff. When the dismal results came in, the staff was genuinely surprised. So, a handful of workers took the survey to find that there were very confusing rating instructions, not to mention the survey was so lengthy, it was clear that customers were simply pressing a number button to get through to the free dessert code at the end.

Be sure that the standards you’re holding your staff up to can be accurately and objectively measured. This goes beyond the measurement of performance, and into retention, engagement and employer branding.

Does Anyone Care?

Team A hit every KPI! Good for them, keep up the good work. Team B missed every one of those suckers. We’ll get ‘em next time. We’re not saying throw a parade for every hit KPI and fire anyone who falls short, but we are saying that there have to be drivers and consequences behind KPIs. Another reason to keep it simple with less than 10 KPIs and transparent prioritization.

If you expect these people to continue to improve performance and drive the success of the organization, a paycheck alone just isn’t going to do that; that’s been proven. Discretionary effort and engagement at work come from good leadership and workplace satisfaction.

You cannot improve upon what is not measured, and that’s a big part of what we do at Volano Solutions. We help businesses track, measure and improve upon…whatever it is they need help tracking, measuring and improving upon! Let’s talk about the metrics that matter most to your organization today.