While developing key performance indicators for employees, it’s important to keep certain things in mind. You want to create KPIs that you and your team can both communicate, track, and execute. Discover how my first interaction with KPIs helped me figure out the characteristics all KPIs need.

My Introduction to KPIs

The first time I experienced key performance indicators (KPI), I was in my early twenties. I was working for a non-profit organization while attending graduate school. To be honest, even with a minor in Business from Penn State, I had never actually heard the term KPI, but looking back I can distinctly recall how a simple number motivated me to achieve a goal.

I was asked to lead the annual food drive for a small midwestern town. After receiving this responsibility, my first question was, “How much did we collect the prior year?” Knowing the answer, I set my sights on a bigger and better goal. Then, I proceeded to build a fundraising campaign towards that number.

Innocently, I talked about the goal on radio spots, local television, and newspaper interviews. We publicized our progress, and as the campaign was drawing to a close and we saw our goal in sight, we scheduled a community event to celebrate the win. After all, it had taken the efforts of a whole community to achieve our success.

Years later, after becoming thoroughly familiar with the KPI concept, I can now identify that the food drive goal was my first recognizable KPI. Developing key performance indicators for employees can be a simple process, as I learned from this first experience with them.

5 Characteristics of Good Performance Measures

Just like my successful fundraising campaign, your team’s KPIs should have the following characteristics to be effective.

developing key performance indicators for employees

KPIs have a clear goal

First, I chose the goal. It wasn’t imposed upon me. I was inherently motivated to achieve it because I was personally invested in the number. Had our Director set the goal for me, I might not have been as driven.

Often, we make the mistake of setting key performance indicators for our staff. Instead, we should allow them to be a part of the goal-setting process.

The KPI goal is achievable

Second, I felt the goal was achievable. Sure, it might have been a stretch goal, but I didn’t perceive it as an impossible target. If an employee on your team perceives the number as unachievable, the KPI could prove to have the opposite effect and actually become a demotivator.

Also, your goal should be measurable. You and your team should understand exactly how to track and record the progress of each goal.

The KPI should be easily communicated

The third aspect was always communicating the KPI. We spoke of the goal at every media event. We posted progress throughout the campaign. Our team made sure the community knew we were counting every dollar and weighing every pound of food that was donated.

After you spend time developing key performance indicators for employees, they should be able to talk about them. They should understand the details and remind themselves and each other of the end goal.

Effective KPIs utilize community involvement

The fourth component of our process was community involvement. Every member of the community knew that their one food item or dollar donation had an impact. All contributions—no matter how big or small—were a valuable part of hitting our goal.

The message to the community was “Your Involvement Matters.” When you’re going through the steps to identify KPIs for your team, ask yourself if every employee in your organization understands their unique contribution towards the company goal. If not, find a way to motivate them and involve them in every step of the process.

Good KPIs deserve a celebration

Lastly, we celebrated the win. By hosting a celebratory event at the culmination of the campaign, we were able to come together and acknowledge the contributions and efforts of the community. Thus, we set the stage for the next year’s campaign.

Building a Better Strategy for Your Business

When you’re trying to figure out how to develop KPI for your department or your company as a whole, it can sometimes seem daunting. However, remembering my early years in business, before I even knew what a KPI was, I recall that it can be a natural process.

Understanding an employee’s behavior profile can be a first step. DISC is a great behavior profile tool that allows you to improve communication and your effectiveness at work.