The Best Examples of Key Performance Indicators


Choice of key performance indicators is perhaps one of the most important stages in implementation of Balanced Scorecard. It does not matter in what company or industry Balanced Scorecard is being implemented, it is imperative to choose the right measures to evaluate other company top management and business owners will get distorted or incorrect information on current co performance which will inevitably lead to wrong decision making. In other words the company management and owners will think that everything is going OK while in fact there will be a huge dedication from the selected strategy. Key performance indicators are not just figures. These are measures that cover critical success factors in various environments. As known, Balanced Scorecard consists of four categories (in some cases five or more): financial, customer, internal processes, learning and growth. Their names speak for themselves. The four categories are the most important areas to succeed in if company really wants to reach strategic goals, increase capital value, bring profits to shareholders, motivate employees, attract new customers, retain existing customers, educate personnel etc.

It should be noted that all key performance indicators are interrelated which means that improvement in one indicator will result in improvement of the other, and vice versa. Key performance indicators are purely individual for every company. One should not forget that when it comes to choice of KPIs no universal set of measures can be used. Every company and every business is individual. It often happens that even if the two companies are operating in the same business environment and industry they may require completely different sets of key performance indicators. The choice depends on company goals, current situation, problems, challenges, strengths and opportunities, strengnthes witnesses etc. However, there are certain key performance indicators which are used in various industries and that are quite popular and representative. Less name a few of them.

In these days of technological progress research and innovation strategies are all important. In order to measure efficiency of R. & D. techniques the following indicators might be used.

Total amount spent on R. & D. vs revenue obtained from research and innovation. This indicator shows efficiency and profitability of introduction of new technologies. For example, if profits from R. & D. are intense, even more money should be invested in this field, while if this indicator shows negative figure's than research and development methods and techniques have to be revised.

And other common indicator used in human resource management is organization climate and employees satisfaction. Many business owners think that these measures even can not be evaluated, but this is not so. Statistics show that good organization climate positively affects individual and group performance of company personnel, while most satisfied employees as a rule have the most satisfied customers. What does this mean in monetary terms? It means that satisfied customers are more likely to buy from the company again which means additional profits end and enlarged customer database.

Sure thing, financial indicators are perhaps the most important and interesting for business owners and shareholders, and they cover all financial aspects of running a business.

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