Building Reliable KPIs through KPI Process Research

KPI or Key Performance Indicators is valuable management tool for tracking and measuring performance of the organization in four key perspectives: internal process, finance, customer and learning and growth. Companies, especially the big ones, generate a lot of data everyday. It could be confusing for managers to pick out from that mountain of data what represent a KPI. But with the use of KPI process research, establishing what constitute a KPI is a lot easier.

Building and choice of KPIs greatly depend on the size of the company and the number of operating areas. A company engaged in a wide array of activities will have more operating departments, like production, sales, marketing, plus the usual human resources and administration, and more employees. Employees’ productivity indicators will be crucial in these types of companies, as the sheer number of employees and interactions between departments can create an environment not conducive to desirable performance.

The process of formulating the relevant HR KPIs will entail in-depth research since the KPIs must deal with methodologies in tracking employee productivity, quality of work, and things that affect them, like problem solving skills levels, initiative, and attitude towards work or towards teamwork. The product of research should be able to identify weak areas in employee performance so they can be addressed accordingly and utilized in the formulation of applicable KPIs. It is also the primary source of a HR development program intended to develop the correct attitudes and skills among employees that are imperative to boost and maintain healthy productivity levels.

Other than those already involved above, more factors can affect employee performance. Such things as work and home-related stress, workplace conflicts, and employee-job mismatching must be included in the HR KPI.

Like metrics and other measurement tools, in order for KPIs to make sense and serve their intended purpose, pre-determined and accurate criteria for judging productivity or performance levels must be established beforehand. And research will be needed for these. An incorrect basis for judging performance can lead managers into implementing corrective actions that may lead to more problems.

Establishing applicable KPIs will be easier to accomplish through the conduct of continuous research participated in by employees themselves. It is a simple matter of asking them some basic questions about their jobs, about their relationships with co-workers, and about what affects their work. Simple tests in collaboration with supervisors can gauge initiative and problem solving abilities.

Results of research can be rated with the use of mathematical formulas. This should not be too difficult, as researchers are equipped with programs where all one has to do is feed the gathered data into computer and an interpretation is immediately available. With this rating, HR personnel can easily tell which factors should be a permanent component of the HR KPI. With the factors affecting productivity narrowed to the most likely causes, monitoring performance or productivity is made simpler. More importantly, regular assessments or analysis of the KPIs can lead to more responsive HR programs and inputs.

KPI process research is not only helpful in developing HR KPI. The development of KPIs for all key business areas needs concrete, valid, and reliable data. This is the reason why research is increasingly becoming an essential management tool.

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