WHAT IS KPI? STRATEGY TO BUILD EFFECTIVE KPI FOR ENTERPRISES

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What is KPI?
KPI stands for Key Performance Indicators, which is understood to be a set of important indicators to help measure, or evaluate the performance and performance of the organization in the most accurate way. . KPI's reflecting object is the business operation, of each department, or of each individual in a certain stage or business cycle that the organization has set out.
Normally, KPI is measured and evaluated based on 3 basic indicators that each individual or organization needs to understand when building KPI:
KRP: index represents the critical outcome, reflects the results from the combination of many different actions. Through the KRP index, we can determine whether the business is really on the right track or not. This metric is often used to measure long-term, monthly, and quarterly value without being as detailed and specific as a KPI.
PI: It is an indicator of performance that makes it easier for businesses to comply with a set business strategy. Through PI index helps to supplement KPI effectively. This metric usually covers some of the issues covered: the percentage of sales growth compared to the top 10% of clients, or the number of recommendations by each employee in the past 30 days, or complaints. from key customers, ...
RI: Performance index helps to summarize activities, as well as financial performance. From these combined results to help businesses determine which factors need to be improved, management should consider which factors affect the final results. For this index includes 3 main factors: net profit from the main product, the number of sales from the previous day and complaints from key customers.
To build a successful KPI, you need to know that it always needs to ensure compliance and fully meet the SMART criteria. Detail:
The specific: when constructing metrics, they need to be explained through three aspects: the significance, the reason to be selected and the method of measurement used. For this indicator, the more clear, specific and detailed, the more advantage each employee has in determining what he should do and how to get the best results.


Meadurrable: KPI, if not measurable, the performance of the job, or the assessment, will lack the necessary objectivity, thereby becoming emotional. .
Achievable: any given KPI is required to be measurable, but another important issue is its visibility. If you give a KPI that is not feasible, it can easily lead to disappointment, frustration, and stress at work. That makes the goal more difficult to achieve in the best way.
Realistic (Reakistics): with this factor ensures a better measure of the balance between performance capacity, with the company's own resources in terms of time, financial capacity, human resources, ...
Timebound: KPI when given, if there is an exact timeline, will create a driving force for efficiency. At this point, the employees will have a target to strive, the motivation to complete the job on time. This is a way to help reduce the inertia of employees effectively, enhancing work efficiency better.

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