What Are Key Performance Indicators?

Businesses need to have some way to know if they’re reaching their goals – a way to note whether or not they are thriving. While there are a lot of subjective assessments of performance (for example, claiming that revenue appears to be increasing or that employees seem to be more satisfied), the only way to say with confidence that your business is thriving is to have a way of measuring its performance. These are known as “key performance indicators.” Companies use these indicators to make sure that they can claim, to themselves and to those interested in the business, that their business is succeeding. It gives them something to strive for – a way to make sure that they are realistically evaluating their success in today’s tough economy.

Key performance indicators can and should include nearly anything that can be measured quantitatively. This includes things like revenue in dollars to the number of paycheck errors to the number of pens currently on each desk. As long as it can be measured, allowing you to know whether or not you have actually hit your goal, it can be a key performance indicator.

It is with that in mind that all businesses need to integrate employee and customer loyalty and satisfaction into their list of key performance indicators. It’s well known that satisfaction is an important part of a good business, but to truly know if you are succeeding at keeping those numbers high, you need to have pre-planned KPIs that help determine you’re effectively targeting them. You can do this with customer satisfaction and employee satisfaction surveys, by trying to reach specific satisfaction scores.

You can also look at other measures of success, such as: Percentage of repeat customers over the course of a year. Number of turnovers over the course of a year. Average length of tenure by all employees.

Surveys are an excellent way to gather information on your employees and should easily be integrated into several of your key performance indicators, but the above list represents a few additional examples of information that can be quantitatively measured and should also be included within your company’s KPI. Key performance indicators are an important part of any business. The only way to know that you are really succeeding as a company is if you create these specific, measurable goals that indicate your achievements.

Adding aspects of customer and employee satisfaction and loyalty should be an important part of your KPIs.