How to build a KPI system and how to formulate KPIs?

KPI (Key Performance Index) is an important indicator to measure the performance of an enterprise, and the establishment of a KPI system is one of the keys to the performance appraisal system. Here are the steps to set up a KPI system:

1.Determine the goals of the enterprise: First of all, you need to clarify the goals of the enterprise, including financial goals, market goals, customer goals, employee goals, etc., which should be specific, measurable and achievable. Kai cavity.

2.Analyze business processes: Analyze the business processes of the enterprise, find out the key links and key performance indicators, and determine the indicators that need to be measured.

3.Preliminary screening KPIs: According to the goals and business processes of the enterprise, preliminary screening of possible key performance indicators, these indicators should be closely related to the goals and business processes of the enterprise, measurable and operational.

4.Determine KPIs: Through evaluation and screening, determine the final KPI indicators, which should be able to objectively measure the performance of the enterprise and be an important basis for the performance appraisal of the enterprise.

5.Set KPI standards: For each KPI indicator, develop achievement criteria and scoring criteria to facilitate evaluation and comparison of the performance of different departments and employees.

6.Establish a KPI appraisal system: incorporate KPI indicators into the performance appraisal system, establish an appraisal process and appraisal methods, and set up reward and punishment mechanisms and incentives to promote the enthusiasm and creativity of employees and improve the overall performance of the enterprise.

7.Regular evaluation and adjustment: Regularly evaluate and adjust the KPI indicator system, optimize and improve it according to the actual situation, and ensure the continuous effectiveness and feasibility of the KPI indicator system.

The method commonly used to establish the KPI system is the "fishbone diagram" analysis method, and its main steps include:

1. Determine individual or departmental business priorities and determine which individual or organizational factors interact with the company;

2. Define the business criteria for each position and define the key success factors, i.e., the strategic means needed to meet the business priorities;

3 Identify key performance indicators and determine the actual factors that determine whether a performance standard is being met.

4. Decomposition and implementation of key performance indicators.

to marketers.

For example, in order to determine its key performance, it is first necessary to determine the responsibilities and key success factors of the marketing department to achieve the company's strategic goals according to the company's strategic objectives, and then determine the key performance indicators and standards of various functional departments and business departments and related processes within the marketing department through layer by layer decomposition, and then decompose them into performance appraisal indicators for marketing personnel.

For example, if the company's strategic goal is to be a world leader, then the key performance objectives of the marketing department must be positioned as a market leader, and to achieve this goal, it must be a world leader in the following aspects: market image, marketing network and market share. And the role of a marketer dictates that their KPIs should revolve around "market share".

From this, we can determine that the key performance appraisal index system of a certain appraisal cycle of marketing personnel is:

1 Customer satisfaction (e.g., customer satisfaction improvement rate or number of customer complaints).

2 Sales order value (e.g., sales order value or sales order value growth rate).

3 Payment** (such as the amount of payment** or the target completion rate of payment**).

4 Selling Fees.

such as the direct selling expense rate or the direct selling expense reduction rate).

5 Contract error rate reduction rate.

In addition, qualitative KPIs such as teamwork, market analysis, and customer relationships can also be added based on the current business status of the marketer.

It should be added that on the basis of the above key performance indicator system of marketing personnel, adding the "per capita gross profit of marketing system" indicator can expand the individual key performance indicator system to the organization's key performance indicator system, that is, the key performance indicator system for the organizational performance appraisal of the marketing department can be formed.

The process of establishing a KPI system includes the following steps:

Clarify business goals and strategic directions: Enterprises or organizations should clarify business goals and strategic directions in order to establish a corresponding KPI system to measure the degree to which business goals are achieved.

Identify key business processes: An enterprise or organization should identify key business processes in order to establish a corresponding KPI system in order to measure the performance level of business processes.

Set key performance indicators: Enterprises or organizations should set key performance indicators that are in line with the actual situation and needs based on business goals and strategic directions, as well as key business processes, so as to measure the performance level of employees or business processes.

Establish performance evaluation criteria: Enterprises or organizations should develop performance evaluation criteria that are in line with the actual situation and needs, so that employees or business processes can be evaluated and managed according to performance indicators.

Design a performance evaluation method: An enterprise or organization should design a performance evaluation method that meets the actual situation and needs according to the performance evaluation criteria, so as to measure the performance level of employees or business processes, including a combination of quantitative and qualitative methods.

Establish a performance appraisal system: An enterprise or organization should establish a performance appraisal system that meets the actual situation and needs, including performance indicators, evaluation criteria, evaluation methods, weights and appraisal cycles.

Implement performance appraisal and management: Enterprises or organizations should implement performance appraisal and management according to the performance appraisal system, collect data and information, conduct performance evaluation and analysis, and formulate corresponding improvement plans and measures.

Continuous improvement and adjustment: Enterprises or organizations should continuously improve and adjust the KPI system and performance appraisal system according to the results and feedback of performance appraisal, so as to achieve continuous performance improvement and goal achievement.

The reason why human resources books are the most diverse in the progress of human management is because human resources are so diverse and need to be completely aligned and embedded in order to have the best talents and teams.

Key Performance Index.

For all positions in society, it provides the most advanced examples and specific quantitative indicators of global consistent and unified standards.

There are generally two ways to establish a KPI system: one is to decompose according to the organizational structure, from the goal to the means and methods; The second is to break down by main process, i.e., from goal to responsibility approach. Based on these two main lines of establishing a KPI system, we usually have three ways to establish an enterprise's KPI system:

Establish a KPI system according to the different responsibilities of departments; Establish a KPI system according to the different types of work in different categories; Establish a KPI system based on the Balanced Scorecard.

KPI selection is a three-step process:

1) Through fishbone diagram analysis, find the key elements of enterprise success, that is, determine the enterprise KPI dimension, that is, to clarify the necessary conditions and goals to achieve excellent performance.

2) Finding the key to the success of the enterprise basically involves three aspects: first, why the enterprise is successful, what is the success of the past, and what are the elements of the past success; Second, analyze which of the factors that have made the company successful in the past and which have become obstacles to the continued success of an enterprise. Third, it is necessary to study that as an enterprise, it is necessary to face the future, according to the strategic planning of the enterprise, what are the goals to pursue in the future, and what is the key to future success.

3) Further decomposition. Analyze and refine the module, that is, determine the KPI elements. The KPI elements provide us with a "descriptive" job requirement that is a refinement of the dimension objectives.

4) Determine KPIs. For an element, there may be many indicators that reflect its characteristics, but according to the requirements of the KPI assessment method and the actual operation of the evaluators, we need to filter the many indicators to finally determine the KPI.

Establishment of KPI performance appraisal system:

1. Clarify the goal of KPIs.

2. Establish the main points:

The key points in establishing KPI indicators are process, planning, and systematic. First of all, clarify the strategic goals of the enterprise, and use the brainstorming method and fishbone analysis method to find out the business focus of the enterprise, that is, the focus of enterprise value evaluation. Then, brainstorm key performance indicators (KPIs) for these key business areas, i.e., enterprise-level KPIs.

Next, the head of each department needs to establish department-level KPIs according to enterprise-level KPIs, decompose the KPIs of the corresponding departments, determine the relevant element objectives, analyze the performance drivers (technology, organization, people), determine the workflow to achieve the goals, and decompose the KPIs of each department in order to determine the evaluation index system.

Then, the heads of each department and the department's KPIs work together to break down the KPIs into more granular KPIs and performance metrics for each position. These performance indicators are the elements and basis for employee appraisal. The establishment and evaluation process of the KPI system itself is a process of unifying all employees to work towards the strategic goals of the enterprise, and it will also play a great role in promoting the performance management of managers in various departments.

After the indicator system is established, it is necessary to set evaluation criteria.

Finally, a review of key performance indicators is mandatory.

Enterprise key performance indicator (KPI: key performance indicator) is a kind of objective quantitative management index to measure process performance by setting, sampling, calculating and analyzing the key parameters of the input and output of the organization's internal processes.

KPIs allow department heads to identify the main responsibilities of the department and, on this basis, define the performance metrics of the department's personnel. Establishing a clear and feasible KPI system is the key to good performance management. Key performance indicators (KPIs) are quantitative indicators used to measure staff performance at work and are an important part of performance plans.