What the key performance indicators characterize. Key performance indicators KPIs - what they are and how to use them. Management of strategic goals of the company

KPI key performance indicators: what is it, examples of such systems as one of the tools to increase business profitability are becoming more and more in demand in the information sphere dedicated to entrepreneurship.

KPI solves the problem of transferring the assessment of the company's performance from the sphere of subjective assessments to the world of reality and objectivity, allows to identify weaknesses and bottlenecks of the business, to optimize activities aimed at obtaining the highest possible profitability.

KPI is used as part of a strategic balanced scorecard, which performs the task of establishing causal relationships between indicators and goals, identifies factors of mutual influence and business patterns through the dependence of some performance results on others (BSC system)

What does KPI mean

This abbreviation came into the Russian language from English (Key Performance Indicators), most often it has a translation as "key performance indicators" "Efficiency" in the definition does not correspond a little to the full meaning of the word "Performance" in English management science, where this concept came to us. The full meaning is described in ISO standard 9000: 2008. 2 values are accepted:

effectiveness, according to the standard, this corresponds to the degree of achievement of the planned results;
efficiency, this concept defines the relationship between the resources expended and the results that have been achieved through their use.

Thus, the term KPI is better understood more broadly - as a "key (main) indicator of a performance result".

Understanding the term KPI in this interpretation makes it clear that it can be used to assess the company's activities only in conjunction with the content of the goal, its content. Therefore, it was KPI that formed the basis of the modern management concept "Management by goals". And the KPI itself should be used to control the business activity of employees, divisions of the company, the success of its activities in general.

Benefits of the KPI system

Since the time of Peter Drucker, the KPI system has undergone many changes and, in an effort to meet the constantly changing realities of the business world, has incorporated many management concepts that creatively develop the main one - "Management by goals".

The advantage of the KPI system in comparison with others aimed at solving the same problems, first of all, is that the KPI provides an inextricable link between such components of the business as plan, execution, result, motivation. Today KPI allows using the data generated by it not only to appreciate the efficiency of employees, departments and the company as a whole, but also to build a perfect motivational mechanism for stimulating employees.

Not every indicator can be considered key. This includes only those indicators that are related to the purpose of the business and for which targets and norms for employees are established. For example, in the KPI indicators it is illiterate to attribute the accounting reports submitted on time, since it has nothing to do directly with the specifics of the department's activities.

KPI types

KPIs are divided into several types:

Result KPI - what results have been achieved and their quantitative expression;
Cost KPI - how many required resources were used;
Functioning KPI - determines the execution of current business processes, assesses their compliance with the required execution algorithm;
Performance KPIs are derived indicators that characterize the ratio of time spent on achieving a planned result in the value of the result itself;
Performance KPIs are derived indicators that are used to assess the ratio of resource costs to the results achieved with their help.

In turn, performance KPIs are subdivided into:

Lagging, that is, those that will reflect the results of work in the field of passage of some time;
Leading(another name - operational) - these are those that allow management to manage work during the selected reporting period, set aside to obtain the specified results after its end.

Lagging- these are primarily financial indicators. They are aimed at demonstrating the relationship between the desire of management and the ability of the firm to generate cash flows. Their disadvantage is that due to the delay in the manifestation of efficiency, there is no way to describe the efficiency of the company as a whole and its divisions at the current time.

Leading indicators engage, if necessary, to analyze the work of the enterprise at the current time, to give an objective assessment of the quality of current activities, the degree of satisfaction of customers' needs, how satisfied they are with cooperation, to identify the possibility of increasing cash flows for the future, to assess the quality of products.

What to follow when developing KPIs

When indicators are developed, the following rules should be followed:

strive to minimize the set of indicators that are needed to manage the business process;
each indicator must be such that it can be expressed in a measurable numerical indicator;
the cost of funds that need to be spent in order to measure the indicator should not exceed the monetary expression of the profit as a result of its use.

KPI development algorithm

This work is carried out in several stages.

Pre-design work. This stage consists of:

obtaining the approval of a superior leader and finding out how to interact with him;
project initiation and planning;
creation of a project team;
work on conducting a pre-project study.

Development of KPI methodology. At this stage, perform:

optimization of the organizational structure;
develop a methodological model;
develop a process for managing a company using KPIs;
develop regulations (a system of regulatory and methodological documents).

The stage of development of the KPI information system. It includes:

development of technical specifications for setting up an information system and setting it up;
user training;
trial operation.

When developing a KPI methodology, attention should be focused on:

development of KPIs as a holistic development strategy;
the availability of an explanation of the benefits of KPIs for staff;
identification and clear recording of corporate key success factors;
creation of generally understandable reporting for all levels;
ways to refine KPIs to maintain their relevance when changing existing conditions business;
development of coordination and application of decisive KPIs.

Project completion stage. Putting into practical operation the methodology of the KPI system.

Characteristics of effective KPIs

Key performance indicators will be effective if they meet the following characteristics:

Address affiliation. This means that each KPI must be associated with a direct executor (this can be either an individual employee or a structural unit) who are responsible for the results of activities in their area of responsibility;
Correct orientation- KPIs must answer key projects development, strategic goals of the company, key business processes;
Reachability- KPI implementation must maintain a balance between the necessary efforts to achieve them and the likelihood of their implementation, it must be in the range from 70% to 80%;
Openness to action- KPIs should be set so that there is an opportunity to intervene in the processes to improve them;
Providing forecasting- it should be possible to assess the factors that directly determine the planned results and have a direct impact on the value of the business itself;
Limitation- KPIs should be oriented in such a way that the performers focus on the implementation of priority tasks and do not scatter efforts on the implementation of unimportant ones;
Ease of perception- KPIs must be accessible for their understanding by performers;
Balance and interconnectedness- key performance indicators should not be included in the zone of mutual conflict, they should complement each other;
Initiating changes- KPI measurements should cause positive changes in the company in the form of a chain reaction, that is, the implementation of some causes a natural process of improving others;
Easy to measure- KPIs should be left in such a way that users can independently quantify progress;
Reinforcement- KPIs should motivate employees, that is, be supported by individual material stimulation;
Relevance- since over time, the influence and effectiveness of even professionally created KPIs can significantly weaken, they need to be periodically updated;
Comparability- KPIs should provide the possibility of comparison in such situations, for example, it would be incorrect to apply the ratio of the average revenue per day for single-format retail outlets, but having such a different location as a regional center and a small district town;
Rationality- each indicator should provide the possibility of conducting analysis on its basis and carry a semantic load. As a negative example of the lack of meaning, such a key performance indicator can be cited, which is calculated as all the costs of maintaining the administrative apparatus to the mass of profit (total). Such an indicator will meet the above characteristics, but in reality it will be meaningless.

General principles and rules for implementing KPIs

To successfully complete the tasks that the system is aimed at, you should adhere to certain rules.

Rule "10/80/10" this rule sets the number of key indicators in the system. It states that a company must have ten key performance indicators, no more than eighty key performance indicators, ten key performance indicators. This ratio helps to avoid overloading managers, as well as significantly reduce the time that management spends on discussing the implementation of the program.
The rule of observance of the principle of controllability and controllability. It states that each department that is responsible for a certain indicator must be provided with the necessary resources for implementation and management, and the result must be monitored.
The rule of the principle of partnership. When developing, as well as implementing, the moment of the obligatory use of establishing effective partnerships between all elements of the system, employees, and a clear understanding of the need for changes must be taken into account.
Principle of focusing efforts on the main direction. This principle establishes the need to analyze the activities of employees in order to identify the possibility of expanding their powers, identifying those who require advanced training, determining what training employees need, making them responsible for developing their own KPIs, establishing effective communication links (both vertically and horizontally).
The principle of integrating productivity improvement processes, reporting evaluation and performance evaluation. It is important to think over and implement such systems of reporting and evaluation of indicators, which would be aimed at stimulating concrete actions and understanding of their responsibility. A strict schedule of reporting meetings should also be established.
Principle of consistency overall strategy and production indicators. This principle requires linking key performance indicators to current critical success factors and inclusion in the overall balanced scorecard and strategy of the company.

Variability of KPI Choice Options

KPI- these are indicators that form the focus of employees' actions, are the main indicators on the basis of which it is possible to assess the effectiveness of their work

For example, suppose you want the sales manager to bring some kind of profit to the firm. How can he do this?

Make a very big deal with one very wealthy client. But such clients are few, and there is an active struggle for them.
Therefore, he has to work through a large array of smaller clients. To get this pool potential clients the manager will have to make a large number of phone calls, send commercial offers to do a great job to create communicative connections with potential clients.

For a manager, when building a KPI scorecard, this is right choice indicators that will most effectively influence the achievement of the goal, for example, the company's profit.

How the KPI system is built

We write out those indicators that, in your opinion, will lead to the required results. For example:

volume of sales;
percentage of customer service;
quantity of goods sold x and y;
extra charge.

Errors when creating KPIs

As an example, you can analyze the creation of a KPI system for a company that produces and sells products itself.

Structurally, such a company can be represented as consisting of:

a division that purchases the necessary materials;
division engaged in production;
department providing sales;
financial department.

The purchasing department is focused on reducing the cost of purchasing materials. Naturally, in order to fulfill your planned KPI, you need to create a system for receiving sustainable discounts, bonuses, and so on.

For the production unit, the main KPI is equipment utilization (it must be above 80%). For example, if it produces two types of products, you need to have an effective scheme for redirecting the operation of the equipment so that it does not stand idle.

Now let's analyze the mistakes that will inevitably occur if we implement KPI mechanically, without taking into account strategic action firms.

Meeting the goal for the purchasing department in the form of reducing the cost of purchased materials includes the possibility of reducing their cost by:

purchases in large quantities, and this, in case of excess materials for the production unit, will entail additional costs for storing and freezing money in stocks;
purchases of lower quality materials - this can cause equipment breakdown;
prepaid purchases - this entails a freeze of funds.

The second mistake is the introduction of KPIs without taking into account employee motivation. For effective work, it is necessary to provide a link between KPI and the system of bonuses and fines, that is, to the system of material incentives.

The third mistake is the substitution of KPI indicators with performance indicators, for example, revenue, profit, margin profit. KPI indicators correlate with the employee's activities to achieve such a result, which must be specifically performed today, tomorrow, the day after tomorrow, that is, the leading indicators described above. If we consider a sales manager, this would be:

the number of clients to meet;
how many contracts to conclude;
how many calls to make;
how many potential customers to find.

The fourth mistake is the lack of a KPI planning and accounting system. These indicators can be taken from the operational accounting system, the management personnel control system. Planning means setting targets for a certain period.

The use of the KPI system with a motivational purpose as an indicator influencing the increase in basic wages should be very careful and legally competent. If this variable part is introduced in labor contract, then the court will consider those payments that were made prior to the consideration of the case in court as wages. In the event of a labor dispute, an employee, even a poorly performing job, will be able to receive additional money from the company. Therefore, it is better to draw up to the main employment contract an additional manufacturing contract or an efficiency contract. in which the variable part of wages is displayed.

In order for KPI to become not just a fashionable innovation, a kind of marker of the company's management as trying to keep up with the times, but really effective instruments increase the profitability of the company, you need to observe three points:

introduction of a norm- this is the KPI that is achievable by an employee during normal work, it is not a dynamically changing indicator, but a static one, for example, in order to receive a regular salary, a manager must conclude at least 10 and maximum fifteen contracts. The norm excludes the factor of chance, as well as the factor of luck;
introduction of the concept of purpose- this is the money that an employee can receive if he achieves outstanding results, for example, based on the above, the employee will conclude from 15 to twenty contracts;
introduction of the concept of "Call"- this is the money that can be obtained when achieving results that are significantly higher than the average for the company, for example, not thirteen contracts concluded per month, but forty.

How to evaluate employee performance

The first indicator is the result, that is, something measurable (square meters of tiles laid, the number of contracts concluded, and so on).

The second factor by which it is possible to evaluate the activities of employees is the time factor, that is, how quickly the business process is carried out. For example, the time it took to fix an error in a call center by IT services. This time, regardless of the type of business, can be fixed and entered into the KPI.

The third factor is the quality factor, that is, no returns, complaints, complaints, and so on. Also, when introducing such a performance indicator, it is required to take into account that if the employee has achieved a satisfactory planned result within the planned time period, the quality can be considered satisfactory.

You can also measure efficiency by estimating the amount of resources that must be spent on the execution of a business process.

How to develop KPIs for a specific department, examples

Although the competent development of efficiency ratios is an individual process, carried out taking into account all the specific features of a company or production, you can still give examples of typical developments. This is especially applicable for services with typical functionality, for example, accounting. Here are some examples. It should be borne in mind that correctly created KPI systems also take into account the utilization rate, if it is more than 100% - the employee is awarded, if it falls below 70% - the manager is fined, since he could not provide employees with work.

You can learn more about the KPI, its development, implementation and use by watching the recording of the webinar.

In the article, we will consider examples of KPIs, the features of calculating the key identifier for various specialists, as well as best examples its implementation by domestic enterprises.

You will learn:

How KPIs are calculated for different employees.
How to develop a KPI statement.
How to calculate KPI step by step.
How to calculate the KPI of a marketer.
What can be the KPI of the chief accountant.
What KPIs can be applied in relation to senior managers.
How KPI can be calculated in Excel.
Which companies have successfully implemented KPIs.

KPI calculation instructions for different employees

The methodology for developing a KPI identifier includes several sequential steps:

Preparatory activities: creation of a working group, analysis.
Formation of methods and methods of assessment: development of a model of a system of performance indicators, the sequence of its construction, creation and testing of KPI identifiers, preparation of modernized management methods.
Implementation: combining the KPI accounting system with existing software, familiarizing employees with the methodology for calculating performance indicators.
The stage of using the KPI calculation system: monitoring performance, adjusting indicators.

To develop KPIs, two main methods are used: process and functional. You will learn how to calculate the premium for each of them from the table below.

The process method is based on building identifiers taking into account the main business processes of the enterprise. The functional method is based on the analysis of the structure of the company and the service goals of its divisions.

An example of a KPI for managers that will make them go all out

If sales are reluctant to fulfill their KPIs, then these performance indicators need to be abandoned. The editorial board of the Commercial Director proposes to establish KPIs that motivate managers to sell and make a profit.

Table. KPI - examples of calculation using process and functional methods

Process

Functional

Sales process. Goals:

increase in the number of buyers (KPI - the number of attracted buyers);

increase in repeat purchases among existing buyers (KPI - the number of repeat purchases).

Enterprise level - plan, strategic development model. Examples of KPIs:

income, profitability;
increase in net assets.

The "Stocks" process.

Goal: growth of inventory turnover (KPI - an increase in the turnover of raw materials and finished goods in comparison with the previous period).

Department level - provisions on the structural unit, regulations. Examples of KPIs:

customer satisfaction level;
sales volumes.

Customer Satisfaction Process. Goals:

decrease in the number of returns (KPI - the percentage of reduction in the number of purchase returns);

reduction of the time interval for customer service (KPI - time spent on service).

Professionalism of specialists - job descriptions. Examples of KPIs:

the number of newly attracted buyers;
time to complete a transaction with one customer.

The "Personnel" process. Goal: increasing the quality level of recruiting (KPI - percentage of closed vacancies).

Table. Sales Professional KPIs: Examples (KPI Matrix)

Index	Base	Norm	Target	Fact	Execution level	KPI Index
Sales volume (c.u.)
Average income per customer (c.u.)
The number of marks "I liked the service" (pcs.)
Share of overdue receivables (%)
Final KPI

Based on the data presented in the table, it can be concluded that the sales person has exceeded the target indicators by 6.1%, and therefore, he should receive a premium.

The table shows an example of the methodology for calculating the "Average revenue from one customer". In the summary from the previous example, this metric is also included in the sales KPI calculation form.

Table. Average revenue per customer for a salesperson

Calculating performance metrics for supporting departments is a complex process. Consider below examples for some of the supporting positions.

Table. Examples of KPIs for other positions

How to calculate KPI: step by step instructions

Stage 1. Defining three KPIs for an employee:

the number of users attracted to the Internet portal;
the number of repeat purchases from existing customers;
the number of recommendations and positive reviews that were published after the transaction on the site or on the pages social networks companies.

Stage 2. Calculation of the weight of each identifier (the total weight is 1, the calculation of the shares of indicators is carried out depending on their priority). In this example, we get:

the number of new buyers - 0.5;
the number of repeat purchases - 0.25;
consumer reviews - 0.25.

Stage 3. Analysis of statistics for each key indicator for the past six months and the formation of a plan:

	Baseline (monthly average)	Planned indicator
Increase in new buyers	160 new clients	Increase by 20%, i.e. 192 new customers
Percentage of buyers who made a repeat purchase	30 repeat purchases	Increase by 20%, i.e. 42 repeat purchases
Percentage of buyers who left a positive review or recommendation on the site		An increase of 20%, or 42 positive reviews

Stage 4. An example of KPI calculation is presented in the table:

The formula for calculating key indicators:

KPI Index = Weight KPI * Actual / Goal

The target is the KPI value planned by the marketer. Fact is actually obtained data.

In the given example, it can be seen that the employee did not achieve the set goals. At the same time, based on the overall KPI value (113.7%), we can speak of a high achieved result.

Stage 5. Payroll calculation.

The salary fund of the marketer in this example is $ 800. In this amount, $ 560 is a fixed part, and $ 240 is a variable. Full salary is paid in case of achievement of a result with an index of 1 or 100%. Since in our example, a KPI of 113.7% is scored, which is an overfulfillment of the plan, a marketing specialist will receive a salary with a bonus.

Result:

560 $ + 240 $ + 32,88 $ = 832,88 $.

At the same time, if the KPI value is less than 1 or 99%, then the size of the bonus is reduced.

A table with an example KPI demonstrates the problematic points in the work of a marketing specialist. Insufficiently high performance can be the result of an incorrectly selected strategy to increase customer loyalty to the company. Such data allows you to monitor the work of a specialist. If the state of affairs does not change in the following periods, then it is necessary to revise the system of requirements for KPIs.

By consistently following this policy, you can get a complete picture of the KPI for sales, production process etc. This will allow you to understand the procedure for calculating and implementing key performance indicators.

The calculation of KPIs can vary depending on the planned indicators. It is permissible to supplement the regulations with new identifiers: data on the number of solved / unsolved problems, a system of penalties for low indicators on key points in the plan.

For example, if the plan is fulfilled by less than 70%, the employee may be deprived of the bonus.

Here is an example of calculating the bonus component of the salary for an employee who has fulfilled the sales plan:

KPI calculation for a marketer: an example

Before you start calculating the KPI for an Internet marketer, you need to clearly define the scope of his responsibilities, and then establish the employee's KPI. The KPI formula can only be used in cases where it is permissible to express numerically the performance indicators for which the marketer is specifically responsible.

As an example, let's present 5 KPI indicators of a specialist:

increasing the target consumer group;
attracting new customers, increasing the number of customers;
an increase in the level of customer loyalty (the number of reviews, recommendations, etc. is taken into account);
an increase in the number of repeat purchases;
increasing company awareness and increasing customer loyalty.

To achieve the target indicators, the marketer uses material and labor resources companies (interacts with software and design developers, analysts and copywriters). A mandatory procedure in this process is budget control. Accurate cost accounting will help to establish the ratio of the results obtained by the specialist and the material resources used by him.

Actions required to implement a system of key performance indicators:

determine the main goal of the company and the indicators that need to be obtained over a given period of time;
set tasks for marketing specialists;
divide the salary of a marketer into fixed and variable components (for example, 75% is a fixed component, and 25% is bonuses for achieving certain targets in the KPI card);
identify key performance identifiers for assessing the work of a specialist;
form a plan and determine the optimal KPI indicators (we will analyze how to do this with examples in the next part of the article).

If necessary, you can use the functionality of the Excel office program or implement a CMS, which will provide a competent organization of the procedure for determining goals, fast data entry and effective control over the implementation of KPIs.

Practitioner tells

Examples of KPIs that made line staff look for the best way to get the job done

Maria Ponomarenko,

director of the Moscow firm Smart Personal

For some time I worked in a team that managed an enterprise in the field of ferrous metal products. The clients of our company were construction and manufacturing companies that needed timely delivery of goods. To meet the needs of buyers, we formed a fleet of cars that could provide transportation of rental up to 12 meters long. If we received a large number of applications and our cars were not enough, we attracted the cars of third-party contractors. We had to solve two problems: to ensure fast delivery of products at a convenient time for the customer and to achieve the maximum load of each vehicle.

What was done. To motivate dispatchers, we have developed a bonus system that depends on two KPIs (for each of the specified logistics tasks).

Indicator of postponement of delivery to other days. If our capabilities did not allow the delivery to be completed on time, with the customer's consent, it was postponed to another time approved by the customer. The limiting number of transfers of deliveries per dispatcher should not have exceeded 3%. With an increase in this indicator, the size of the employee's bonus decreased. Conversely, if the dispatcher could avoid transfers, the amount of his bonuses increased (see data in Table 1).
Average number of deliveries per vehicle(the total number of deliveries that were made in 1 day was divided by the number of machines used). On average, one car made 1.8 trips per day. It was decided to increase this figure to 2 flights. It also provided for an increase and decrease in the indicator (see table 2).

Bonuses were calculated using the formula: S x K1 x K2, where S is a fixed amount (for example, 10,000 rubles), K1 is the delivery transfer rate, K2 is an indicator of the efficiency of using vehicles. Depending on the achieved figures, the dispatcher could earn from 12 to 180% of the bonus, which ranged from 1,200 to 18,000 rubles.

The KPIs turned out to be mutually exclusive. For example, it was possible to increase the number of deliveries by one car, but as a result, the buyer would be inconvenient to accept the product. In order to achieve an increase in both indicators, the dispatcher had to take into account a number of factors (customer requests for delivery time, region of delivery, carrying capacity of vehicles, compatibility of delivery of various types of rental on one vehicle).

In parallel with the introduction of the KPI system for dispatchers, it was necessary to provide more effective work related departments (for example, a warehouse complex).

Result. The KPI system was launched in March, and in October the average daily delivery efficiency identifier rose from 1.8 to 2.3. Thus, in just 7 months of work with the use of the KPI system, the efficiency of the transport fleet operation increased by 28%. At the same time, we managed to reduce the permissible number of delivery transfers by 6 (!) Times - from 3% to 0.5%.

In the general part of the KPI regulation it follows:

clarify the target orientation of the regulation (example of the wording: "the KPI regulation determines the procedure for the formation of performance indicators, their monitoring in the course of activities and control based on the results of reporting periods");
identify employees for whom the KPI regulation is mandatory;
set the goals of the KPI matrix (example: bringing the long-term plans of the enterprise and the annual tasks of its specialists to the same denominator);
provide a list of basic terms with their definitions;
present the principles on which the KPI system is based (example: decomposition, balance, compliance with SMART rules).

In the main part of the KPI statement, it is also necessary to describe the procedure for the formation and approval of performance indicators. It is necessary to disclose the criteria that they must meet (example: measurability, attainability, concreteness, etc.). Our example, available for download below, will help you compose such a document for your company.

It is better to draw up KPIs of individual specialists with a special document called a scorecard. It is coordinated with the general director, senior managers of personnel and finance department and is signed by a specific employee.

In the KPI regulation, it is also necessary to determine the validity period of the card (example: a calendar year) and attach an agreed form to it.

Table. KPI Map for Finance Professionals

№ p / p	KPI type	KPI run levels			KPI weight,%	KPI performance level
№ p / p	KPI type	Lower level	Target level	Top level	KPI weight,%	KPI performance level
	The rate of turnover of receivables and payables	Growth of the turnover ratio from 0 to 1% in comparison with the base year	Growth of the turnover ratio from 1 to 3% compared to the base year	Growth of the turnover ratio over 3% compared to the base year
	Percentage deviation of real indicators from planned ones, which were not warned using the data monitoring system,%
	Decrease in operating expenses for a function in the industry relative to the previous year,%
	Free financial flow, RUB mln

The KPI statement should contain requirements for the development and approval of key identifier maps. It is necessary to indicate those responsible for the formation of KPI maps, their approval and acceptance. It is necessary to describe the unified requirements for the coefficients and the format of such a map. For example, it should include identifiers for calculating the performance of indicators (continuous, discrete, cut-off) and recommendations on the measurement methodology (quantitative and qualitative). It is important in the position for each KPI to indicate its target value, weight, type, as well as the top and bottom level. In addition, you need to take into account that the total weight of all indicators in the KPI map should be 100%.

A cut-off KPI is indicated only as a last resort, as it resets the rest of the data. For example, any industrial accident that occurred during the reporting period could be used as a cut-off indicator for a chief engineer.

The KPI regulations should describe the procedure for monitoring the performance of indicators, which will help to quickly identify and eliminate the causes of significant deviations of KPI identifiers from the target values.

In the regulation on key performance indicators, it should also be noted the frequency of implementation of control activities (for example, once a quarter) and the employees responsible for their implementation.

For possible (internal or external) changes in the conditions for the implementation of economic and economic activities, the KPI adjustment procedure should be described. The reason for their use, for example, may be changes in official duties employee. Here you need to write down a list of persons who can initiate the use of adjustments, as well as the parameters by which such corrections can be carried out (for example, changing the number and composition of identifiers, target indicators, the level of their achievement, etc.).

The KPI regulations also include the stages by which the achievement of key indicators will be assessed (for example, self-assessment by the owner of the KPI card, the data of which must be agreed with the management, HR department and financial service).

The regulation on key indicators should also describe the methodology for their calculation. The level of the premium specialist and his motivation to achieve target standards depends on her choice. For example, in the KPI regulations, you can specify that the weighted map execution identifier is obtained by multiplying the indicator value by its weight.

KPI of the chief accountant: an example of assessing the workload of a department

The management of an enterprise often considers accounting as a costly division. Chief accountants regularly complain about the too high level of the department's workload and ask to increase its staff. How can a manager find out if the accountants are really overloaded with the current work or the problem is the low efficiency of the work organization? How to determine KPIs for accounting employees?

A qualified chief accountant must have the tools for an objective assessment of the level of workload of specialists in his department. Situations are possible when some employees need to increase the range of responsibilities, while others, on the contrary, narrow the scope of tasks. Such measures will help to ensure a more even distribution of the workload on specialists and increase labor productivity. Despite the fact that the accounting department is considered as auxiliary, its specialists often contribute not only to preservation, but also to increase the volume of financial resources.

To evaluate the work of one accountant or an entire department, KPIs are used. They include a number of indicators:

timely submission of reports to regulatory authorities and error-free filling of declarations;
timely payment of company bills by clients;
no errors in accounting;
the amount saved financial resources(for example, on contracts with suppliers or contractors, etc.);
the total amount of fines paid to the tax authorities (due to the fault of accountants);
accounting salary costs;
presence / absence of complaints from external and internal clients of the enterprise about the work of accountants.

If we consider KPIs for an accountant, examples can be cited various, but it must be borne in mind that it is this department that is able to influence the efficiency of all main business processes of the enterprise by increasing profits and optimizing costs.

In economic and economic processes, the key performance indicators of the accounting department are:

interchangeability of employees;
number of accounting specialists;
the minimum amount of overdue documents in the process of work;
the number of company employees per accountant.

In addition, the level of qualifications of accountants and their motivation to work to obtain the desired result should be taken into account. The manager must control the workload of employees, the comfort of work in the field and, if necessary, provide accountants with timely advanced training in specialized courses.

Depending on the tasks set and the timing of their implementation, the manager evaluates the work of one or another employee. Depending on the results obtained, a decision is made to expand / reduce the staff.

The most effective tool for determining the optimal number of company employees is rationing. Let's give an example of such for the accounting department, where the work includes such components as:

primary documentation (incoming);
accounting standards and the Tax Code;
results of work (reporting).

To calculate the required number of employees in the accounting department, you need to know the approximate amount of primary documentation received for a certain period of time (day, month), and have an understanding of how many employees and in what time will be able to process such a volume of materials.

To, for example, determine the KPI of an accounting officer in charge of payroll, the following criteria are used:

the number of employees of the enterprise served by him;
accrual wages by the number of employees (payroll);
withholding tax and other mandatory payments based on the number of employees;
the number of inter-settlements.

On the basis of such criteria, the rate for the accounting employee is determined, on the basis of which the number of accountants required by the enterprise is calculated. For example, if you take 1,600 payroll sheets per month for the KPI rate of a payroll specialist, then an organization with more than 5,000 employees will need 3 payroll accountants.

Each company has unique KPIs. They are formed on the basis of the goals and objectives of the enterprise.

KPIs are set by management (chief accountant or company director) and may contain more or fewer indicators than the examples presented in this review. The main motivation of employees lies in the accurate and objective calculation of bonuses for achieving KPI indicators. As a result, conscientious and responsible employees receive higher wages. Such incentives motivate employees to increase productivity.

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Key Performance Indicators: Examples for a Senior Manager

In the process of building a KPI system, heads of structural units of an enterprise need to observe the following principles presented in the table.

The main guidelines of the company are always determined based on the strategic goal. For example: "What results does the management want to achieve in a given time period?" A leading position in the market or a prospective sale of a company can be considered a key indicator. In the first option, attention is paid to increasing sales volumes and increasing the customer base, in the second - increasing the capital of the enterprise in order to obtain the highest value on sale.

To do this, first determine the main goal and substantiate it in detail in writing. Then they break it down into several small goals, which are specific tasks, with the help of which it will turn out to achieve the main idea. Visually, this can be displayed in the form of a "tree of goals" drawn on paper with reference to organizational structure enterprises.

Human psychology is such that many, for fear of showing their incompetence on some issues, agree to carry out the task at random, without even understanding its essence. As a result of observing the setting of tasks in a well-known holding company, it turned out that at a meeting with the main management, many employees agreed with what was said, but, leaving the office, they asked their colleagues what the boss had in mind.

Each point of the KPI system must be clearly spelled out. For this purpose, the company's management (general director, board of directors and management) draw up and approve the regulation on KPI. It will be nice if the document contains examples and calculations with formulas, and all terminology is tied to accounting. If the regulation takes into account the accounting rules of the Russian Federation, then in the future you need to rely on them. When using several systems of reporting documentation, it is necessary to indicate by what methodology each indicator should be calculated.

For a better understanding of the provisions on the KPI, several general meetings are held. Each manager must independently calculate his bonus, referring to the indicators of the previous reporting period. A certain number of working days are allocated for the task, after which everyone is gathered to identify errors. At such meetings, the need to make adjustments to the KPI regulations is often revealed.

The final approval of the document is carried out with the maximum number of indicators established for all managers. Each manager is able to simultaneously monitor no more than five to seven indicators.

You should not be guided by the principle of achieving maximum results, since many top managers, having received a task of high complexity, simply stop making great efforts to complete it.

The KPI is calculated once a year. This is the most optimal period for assessing the achievements of a specialist. What if the lead manager was hired during the current year? As an example, consider the capital group of companies Insol. Here the bonus part of the salary is calculated as follows:

the work plan contains data compiled on the basis of an analysis of the previous achievements of the head according to similar indicators with an increase of 20%. This is the target interest rate set by the head of the company;
if the leading manager was hired recently, the indicators of his predecessors are considered (20% should be added to the average indicators).

The amount of the bonus depends on the fulfilled level of targets. Let's consider this situation with an example:

50% bonus, if the real figure exceeded the planned one;
30% if the plan is fulfilled;
10% if the result is lower than planned;
the variable component of the salary is not paid in the event of an unacceptably low result.

When calculating KPI, it is better to take into account general and personal indicators. The first includes the results of the department, which is managed by the top manager of the company. Overall results motivate employees to work as a team and serve as a manifestation of the specialist's interest in the end. The specifics of the enterprise and the position of the head are the main factors that determine the ratio of general and personal results for the formation of KPI. A high position implies a reduction in the weight of personal results. For the lead manager, the percentage of personal metrics can range from 10% to 20% (or they may not be counted at all). For the head of the company, a personal KPI means obtaining qualification certificates of a specialist in the financial sector, which is mandatory for some companies, as well as training a successor.

KPIs are expressed in specific numerical values. For example, for a personnel manager such a criterion as “attracting highly qualified personnel” is unacceptable. In this case, there are no indicators such as terms, composition and number of personnel. In addition, the assessment category “highly qualified personnel” cannot be used. The CEO of the company and the head of the HR department may not agree on such evaluation criteria as “qualified” and “highly qualified specialist”.

It is important to establish how the indicator will be determined. It is inappropriate to use expensive data for this, spend a lot of personal time and attract other companies. For example, if the head of the marketing department needs to determine the level of awareness brand, then for the assessment of KPI you will have to use rather expensive methods.

For each indicator, it is necessary to form the levels of achievement:

threshold (indicators below which bonuses are not charged);
target (for this indicator, a specially provided remuneration is paid);
maximum (increased bonuses are paid).

On some general indicators, the influence may be indirect, but in personal, the connection between work efficiency and the result obtained should be direct. For example, for the director of the financial department, it is impossible to apply the KPI “presence of cash gaps” if all decisions regarding the timing of payments to counterparties and the provision of commodity loans are made only by the general director.

If the percentage of the bonus is negligible compared to the employee's total income, then he will not spend his time on setting strategic goals, but instead will focus on more important current issues. The share of the bonus for a senior manager must be at least 100% of his flat rate, and for an ordinary employee - up to 20%.

For an employee of a company, indicators are considered fair if they differ by no more than 30% from the average statistics in the industry. In this case, the experience of colleagues will be useful in developing KPIs.

A very important aspect is the fair procedure for calculating the KPI. If a certain amount of profit was established for a top manager in relation to KPI, but at the end of the reporting period the indicators barely reach 50%, then according to the KPI regulation, the manager is not rewarded. At first glance, everything seems to be fair, but if we take into account the crisis situation of the past year and the bankruptcy of more than 50% of companies in the industry, where everyone else went to zero, then it turns out that this company received 50% of the main indicator. In this case, the manager deserves a bonus. This suggests that it is possible to avoid such a situation if the main indicators are linked to industry-wide ones.

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Practitioner tells

Leader's KPI by example

Tatiana Kostenkova,

Legal and Business Development Advisor, Finstar Financial Group, Moscow

Case study 1. KPI for a store manager

Let's consider an example from the practice of TD "Narodny" (Bishkek, Kyrgyzstan). The following KPIs have been developed for store managers of this trading house:

KPI 1. Fulfillment of the sales plan. It is calculated based on the ratio of the actual volume of sales to the planned one. The store revenue plan for a certain period is approved by the general director in agreement with the financial and commercial directors. This KPI is evaluated by an analyst (Table 2).

KPI 2. Compliance with reporting and performance discipline. This indicator demonstrates the timeliness of preparation of reporting documentation, transfer of utility bills for payment, sending documents to the archive, execution of orders of the General Director, implementation of inventory regulations, as well as the accuracy of following corporate standards and compliance with reporting and performance discipline. Evaluates KPI Commercial Director firms. Each violation counts 1 point.

KPI 3. Work of subordinate employees. The assessment of employees in accordance with the approved parameters is carried out by the curator. Violations are converted into points. For example, the parking lot near the store and its entrance lobby must comply with engineering and sanitary standards. Violation of these requirements is estimated at two points.

Case study 2. KPI for the head of the Russian branch of a large holding company

Initially, KPIs at the enterprise were tied to analytical indicator EBITDA. When the business moved to a new level, it became difficult to comply with corporate standards.

The heads of departments were assigned 4 tasks:

minimization of costs;
preservation of indicators achieved in previous periods;
adherence to the methodology for making decisions according to the standards of the parent holding company;
decrease in unprofitableness.

To stimulate the director to solve the assigned tasks, 4 key performance indicators were developed. If the plan was fulfilled, the remuneration was 150% of the annual salary.

KPI 1. At least one of the stores opened more than a year ago has been operating at a loss for more than three months. Performance is assessed by the board of directors based on the audit compiled from the operating income statement. The weight of the indicator in the bonus is 0.3.

KPI 2. Failure to meet EBITDA. The identifier is assessed by the board of directors or audit committee based on the income statement. The weight of the key indicator 2 is 0.3.

KPI 3. Violation of internal regulations on decision-making regulations. The presence / absence of failures is determined by the board of directors. Key indicator 3 weight is 0.2.

KPI 4. Failure to comply with decisions of the board of directors. The presence of such facts is determined by the board of directors. The weight of indicator 4 in the bonus is 0.2.

How to calculate KPIs in Excel: examples and formulas

Financial bonuses in the KPI motivational system are stimulating. The amount of payments depends on the personal results of the specialist's work in the reporting period. The amount can be fixed or calculated as a percentage of the salary.

Any company determines the KPI and the weight of each indicator individually (depending on the tasks of the enterprise). For instance:

The goal is to fulfill the implementation plan in the amount of 500 thousand rubles. monthly. The key identifier is the sales plan. Measurement system: actual sales / target sales.
The goal is to increase the shipping amount by 20%. KPI - average shipment volume. Measurement system: Actual Average Shipment / Plan for Average Shipment.
The goal is to increase the number of buyers by 15%. KPI - the number of buyers in the company's database. Measurement system: actual number of buyers / planned number of buyers.

The company determines the spread of KPIs (scales) independently. For instance:

Implementation of the plan by less than 80% is an unacceptable result.
Implementation of the plan 100% - coefficient 0.45.
Implementation of the plan in the range of 100-115% - coefficient 0.005 for every 5%.
No errors - coefficient 0.15.
There were no comments in the reporting period - the coefficient was 0.15.

This is just one of possible examples determination of motivational KPI indicators.

The main point in determining key indicators is the calculation of the ratio of the actual result to the planned one. Almost always, an employee's salary includes salary (fixed part) and bonuses (variable part). The motivational KPI influences the calculation of the variable part of the salary.

Let's take the ratio of constant / variable parts in wages 50: 50. According to KPIs, examples of indicators and weights of the variable and constant parts are as follows:

Let's take the following values of the coefficients (the same for indicator 1 and indicator 2):

KPI table in Excel:

Explanations:

Salary - (constant component of salary) is calculated based on the number of hours worked. In our example, the constant and variable parts have the same weight.
The percentage of the implementation plan and work plan is calculated as the ratio of the indicators obtained to the targets.
Odds are applied to calculate the bonus payments. In our example, the influence of indicator 1 and indicator 2 on the amount of the premium is equal. The magnitude of the coefficients is also the same. Therefore, to calculate indicators 1 and 2, they are applied and the same formulas (only cell references change).

4. Formula for calculating bonuses: = C3 * (F3 + G3). We multiply the planned bonus by the sum of indicators 1 and 2 for each employee.

5. Salary: salary + bonuses.

This is a rough summary (KPI example Excel). Each company forms its own table, taking into account the peculiarities of its activities and the used bonus system.

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KPI matrix example in Excel

In order to assess employees on key indicators, it is necessary to form a matrix or agreement on goals. In the general form with which the calculation of KPIs in Excel is performed, the examples are as follows:

Key identifiers are the criteria by which the assessment of the company's employees is carried out. Different criteria are used for different positions.
The weight of the indicator is indicated in numbers from 0 to 1 so that the sum of all indicators is equal to 1. The weight number indicates the priority of this KPI, taking into account the tasks of the enterprise in the reporting period.
The base value of the KPI is an acceptable minimum. The level, the value of which is less than the "base", is the absence of a result.
The norm (planned figure of the indicator) is a mandatory level. If the “norm” is not implemented, it means that the employee is not coping with his job duties.
The goal (an excess of the norm, which makes it possible to improve the results) is the value to which it is necessary to strive.
Fact is actually achieved performance indicators.
The KPI index demonstrates the level of the result in relation to the norm.

KPI calculation formula:

KPI Index = ((Actual - Base) / (Rate - Base)) * 100%.

An example of filling out a matrix for an office manager:

The performance ratio is calculated by summing the products of indices and weights. An employee's performance assessment is clearly demonstrated using conditional formatting.

Where was the successful implementation KPI: examples of companies

The KPI system is being actively implemented at domestic enterprises.

1. Sberbank: motivating employees through KPIs.

An example of a company that has successfully implemented a KPI system is Sberbank. A few years ago, the branches of this bank were filled with long lines and were remembered for not very polite service. After the KPI system was introduced for Sberbank employees in 2010, noticeable changes took place in the work of the enterprise. For ordinary personnel, group indicators were developed, called "5+":

personal effectiveness;
improving their knowledge;
customer focus;
optimization of working time;
teamwork.

The motivation system developed for Sberbank employees is not exclusively limited to financial incentives. As intangible motivating factors, such moments as the provision of benefits, free schedules, discounts, tours, etc. are used.

2. "Tycoon" - a new management system.

The system of key indicators of the company "Magnat" was named KPI-Drive. Its creators set goals for solving the following tasks:

Improve Tier 1 KPIs by the second year after implementation.
Improve the movement of variable costs by increasing the dynamics of the wage bill.
Increase the transparency and manageability of the business.
Strengthen team interactions.
Pay back the costs of implementing the system.

The results of the implementation of the KPI methodology can be an example of how quickly the intended goals were achieved. Of course, as a result, the system of key performance indicators has become an integral part of the company's business processes.

Implementation results:

The management model has become more technological and understandable.
The motivation system has become more technological and flexible.
Enterprise Level 1 KPIs are constantly improving.
GC "Magnat" is an example of successful implementation and use of targeted management technology.
Since the introduction of the KPI system, the Magnat group of companies has increased its business volume by more than 5 times.

Examples of how effective the implementation of the KPI system is can be found in many of the largest companies operating in the domestic market.

The system of key performance indicators has been used for many years for the management of large, small and medium-sized companies around the world. This is a large-scale and multi-level management system that allows you to make an accurate assessment of the efficiency and effectiveness of the enterprise. KPI implementation is not an easy task that requires time resources and serious efforts, but the effect of the implementation of the system is worth it.

Let's try to define what a KPI is in simple terms. In general, this is an indicator of the achievement of a result in a particular activity, digitized, measured and expressed in numerical form. The motivational KPI system for employees is an indicator of the effectiveness and success of the assigned tasks. The meaning of this system is to direct the actions of employees of all departments in a unified direction using specific parameters.

The indicator of each individual employee not only determines the efficiency of his specific work and is financially reflected in his salary, but is ultimately aimed at solving the business goals of the entire enterprise. KPI - it is also called KPI, Kipiai, but it is more correct to use the abbreviation KPI (Key Performance Indicators) in the Russian version - are divided into two types:

Operational, which fully reflect the current activities of the enterprise and allow solving problems in connection with changing conditions.
Strategic, which assess the work of the company for the entire period and allow you to make adjustments to the plan for the next working period.

The following types of key indicators are distinguished:

costs - illustrate the amount of costs;
efficiency - characterize the ratio of the result obtained to the costs;
functioning - assess the compliance of a process with a given algorithm;
productivity - show the ratio of the result to the time spent on achieving it;
result - demonstrate what effect is obtained in the end.

The last indicator is of greatest importance in personnel management, as it shows what results employees achieve as a result of their work. If the company has an appropriate remuneration system (salary + KPI), the key performance indicator is used when calculating the bonus part of the salary.

Performance indicators and labor compensation

When developing and implementing parameters of efficiency in wages, in order to understand what KPI in wages is, it is necessary to clearly formulate the goals that the company pursues. These goals should have specific features, and for their setting it is necessary to use verbs and numbers.

For example:

increase turnover by 20%;
take the 5th place in brand awareness among the manufacturers of this product;
reduce logistics costs by 15%;
increase the profitability of sales by 25%;
reduce the average application processing time to 5 minutes;
increase the number of site views by 1000;
process a larger number of addresses per unit of time, etc.

Any motivational system is aimed at increasing interest in work and the quality of implemented key indicators. It is also important to understand that not all departments are equally influential in the implementation of the company's business goals. For example, a secretary or an accountant. But even for such employees, it is realistic to establish criteria for the effectiveness of their work. It is more convenient to tie them not to general business goals, but to the implementation of the goals and objectives of the unit.

So, for the secretary, the key performance indicators will be: the quality of processing of incoming and outgoing documents, the speed of answering incoming phone calls; for an accountant - the time of processing documents or the quality of interaction in matters of document flow with accountants of counterparties.

The implementation of a system of performance indicators provides for:

clearly formulated goals for the business;
developing the lowest and highest performance indicators;
correct distribution of powers and responsibilities among employees;
determining how and on what indicators to achieve the goals each department influences;
finding out what within the department is influenced by an employee of the company;
search and formulation of specific indicators for each employee;
creation of a new payroll algorithm based on key performance indicators;
fixing changes in local regulations. The most convenient way is to develop a separate document. They compose it so that it covers all forthcoming changes in wages.

It is advisable to first implement the new system as a pilot or test project in one department, whose work has a direct impact on the financial performance of the company (for example, in the sales department). And then, after correcting possible errors, extend its effect to all other divisions. If the conditions of the external market environment change or the strategy and goals of the company change, the indicators are necessarily revised.

Development should be done not only by employees of one department. It's always teamwork heads of all departments, allowing you to clearly understand what is KPIs of employees, and not to be mistaken in their definition in relation to the specific conditions of a particular enterprise.

Within the framework of the department, it is necessary to develop a system from top to bottom, that is, first to the head, and then to his subordinates, so that the goals and objectives within the unit are uniform. But it would not work out that, for example, the head of a department has a goal to increase the sale of low-profit positions, and managers receive a percentage of the sale of positions with high profitability... With such indicators, managers are not interested in selling positions with low profitability, and the tasks of the leader will be difficult to fulfill.

In a properly constructed system, each KPI is clearly thought out and defined values.

For one employee, several (not many) indicators are introduced, for which he is responsible (3-5 is the most optimal number). For each key indicator, its financial value is determined, which is reflected in the salary. It is recommended to keep the employee's salary, and make the motivational component additional, and not part of the former salary.

Thus, the KPI salary is a variant of the remuneration of workers, in which the final amount is variable and directly depends on the quality of the tasks assigned.

KPI development, rules and principles of implementation:

a small number of indicators;
measurability of each indicator;
costs (time and financial) for measuring the parameter should not exceed its cost.

When introducing a new wage system, it is not harmful to prepare for resistance from workers. Often, employees assume that they want to be deprived of their salaries, and not increase their income, they are afraid of not meeting the new established standards and losing their jobs altogether. It is very important to explain to employees what this developed system is aimed at, what results management expects from them. And understand that the goals set by management sometimes turn out to be radically opposite for employees to what they did before. It is especially difficult to get used to such innovations for workers of the "Soviet temper" who are accustomed to other systems of motivation and remuneration.

In general, the development of a KPI system is a very controversial topic for any manager. This process is almost always quite costly and painful for employees, but with the right approach it is an excellent tool for motivating and stimulating employees to work.

How to measure performance

Assessment of the performance of the assigned tasks is an important element of the work of the motivational system. The standards of ordinary workers are selected transparently in the assessment, so that a person himself can understand during the accounting period whether he fulfills them or not, and not find out about it after the end of the period. Leaders have acceptable indicators that take time to determine their implementation, such as% of a company's ROI. But within a month, the employee must understand in which direction he is moving, and be able to evaluate his current work using other indicators.

In large companies, KPI metrics are usually automated and results are determined at the push of a button. In smaller companies, performance is evaluated either by managers or by HR representatives.

Based on the performance of the indicators, a bonus is calculated.

The following calculation formula is usually used:

weight - the weight of each indicator of the system in a total amount equal to one. The maximum weight is given to the most significant indicator. For example, the main achievement of a sales manager is to increase the amount of sales;
plan - a planned result that you would like to achieve;
fact - actually achieved result.

Having calculated the index for each indicator, we will immediately see which tasks the employee had problems with and how this affected the overall results of his labor activity for the reporting period.

To determine the feasibility of bonuses and the calculation of the bonus component of wages, the general performance ratio is used, which is the sum of all indices.

If it is more than one, then this indicates an overfulfillment of the set plan, which means that the employee deserves a bonus.

This approach makes it possible to make the process of distributing bonuses more transparent and understandable for both the employee and the management personnel of the company distributing bonuses.

In addition to paying a bonus, other incentives are also used. For example, provide an unscheduled day off, transfer a more promising project, include in personnel reserve to a higher position, etc.

It is optimal to combine material and non-material incentives. Such a motivation system will allow employees to work well and efficiently, and the company - to achieve high financial results.

Examples for different positions

It is necessary to very clearly understand what KPI is for remuneration. For different positions, even to achieve the same goal, it is necessary to use different indicators.

Consider examples of KPIs for representatives of various specialties, in order to achieve the goal of "increasing profitability (the delta between income and consumable parts) sales ”in a company that sells candy.

What is a KPI Matrix

There are different interpretations of this concept on the Internet. Sometimes the term “KPI Matrix - Goal Agreement” is used. But the most accurate interpretation is the efficiency matrix.

This table contains examples of employee KPIs (Key Performance Indicators), planned and actual values, and the KPI ratio for each item. The final average value in this matrix reflects the employee's efficiency in his activities within the framework of the tasks set and the indicators defined for his position.

An example of a matrix for the above employees of a company that sells sweets, within the framework of indicators defined for them.

Pros and cons of the KPI system

Pros (and, as a consequence, achieving goals):

the employee's ability to influence his salary;
employee responsibility for a separate area of work and transparency of tasks;
employee participation in achieving the overall goal of the company;
the ability to adjust goals by the head in the process of work;
interaction of the head with the subordinate in a more dense mode.

Cons (and, as a result, employee demotivation):

unattainability of the set parameters;
a small share of each indicator in the bonus amount due to their large number;
labor input of the system implementation;
uneven solution of problems due to incorrect determination of the cost of standards.

Special opinion

There are 2 main mistakes when developing a KPI system. The first is the confusion of the concepts of KPI and money. KPI is not a description of the bonus system. Yes, it is worth paying bonuses for the achievement of key indicators. But above all, KPI is a reflection of the effectiveness of an employee, department, direction, department.

For example, in manufacturing, there is a customer assessment of the quality of work. Majority large companies they do not put it in the bonus system, but record it only as a KPI: if an employee is in critical zones, he is brought up to the required level or is separated from him, but he is not paid a bonus if 90% of clients are satisfied with his work.

The second is KPI for the sake of KPI. Key performance indicators are always a decomposed goal of a company. For example, in the salon, the arrival of an administrator at 9 a.m. is cut into performance indicators (otherwise the shopping center will fine the company for a closed salon), but in production such an indicator is meaningless (an employee will come at 9 and leave at 6 p.m., but the amount of work will not change, but the amount of work affects the profit).

Boris Teklin

Head of the Department of Customs Activities in Russia DHL Worldwide Express

It is considered that KPIs are selected correctly if they meet the so-called SMART criteria (Simple, Measurable, Agreed, Relative, Timebound). This means the following.

Key performance indicators should:

become understandable to the employee and easy to calculate;
be measurable in certain units (in cubic meters of excavated soil, tons of cargo transported, the number of calls answered, the percentage of the plan achieved, etc.). Unmeasurable “analog” indicators, such as “quality”, “good”, “beautiful”, etc., cannot be used as an indicator;
be consistent with the objectives of the unit and between the employee and his manager;
be directly related to a specific employee and the work assigned to him;
be measured at specified time intervals (if there is a link to a premium, then it is logical to link the indicator to a month or quarter).

Performance indicators should be as clear as possible to those who set the task and those who carry it out. Their main task is to contribute to the achievement of planned indicators and motivate them to fulfill new ones. Based on our experience, we highlight several errors:

1. KPI is developed not for business management, but for motivating specific departments, employees, divisions, to assess the effectiveness of their work. If these KPIs are not linked into a common system and do not work to achieve business goals, the question arises: what effect do they bring to the business?

2. KPIs are not integrated into the motivation system. Performance indicators have been developed, but there is no incentive for employees to meet them.

3. KPI-indicators are financial only. In a properly designed system, there is a large number of not financial, but leading indicators, by which we control the activities of the business and the achievement of the necessary results.

4. There is no KPI planning and accounting system. Performance indicators are needed when we know how to calculate them, when we can get them from the accounting system and calculate objectively, and the employee trusts these indicators.

5. KPI indicators are compiled in such a way that the employee works not for the result, but for the indicators.

In our opinion, the KPI system does not work in creative professions and in unstable markets. Today we see the following alternatives to traditional KPIs:

The employee independently makes decisions (the principle of work according to the "Turquoise management model").
Planning by goals for results.

Olga Pavlenko

HR Manager Soyuzkhimtrans-Auto

The article presents in sufficient detail important aspects when developing a motivation system based on KPIs. I want to add an important, in my opinion, nuance, that many key indicators are not introduced. Of course, there are positions in which it is very important to take into account many different factors and components. But the more parameters for taking into account the employee's efficiency, the more difficult it is to keep them all in your head and the more difficult it is to concentrate. Developing a system is half the battle, the system should work. And for this it is important to remember the basics of psychology about the peculiarities of attention and memory. 3-5 performance indicators are optimal for a running system.

And the second important point that I would like to add concerns the basic salary paid to an employee. The salary part of the salary remains unchanged and indivisible. This state of affairs gives the employee a sense of stability and confidence. KPI payments that supplement the base salary should motivate and encourage the employee to develop professionally and perform more successfully on tasks. If the base salary also becomes a variable, there is a risk of demotivating the employee and provoking him to avoid difficult situations instead of solving them.

When developing a KPI, it is important to consider the following factors:

1. An employee necessarily has the ability to influence KPIs.

2. Achievability of KPIs. An ambitious goal is good, but it must be borne in mind that it is impossible to build a house in 2 days.

3. Relevance to functionality. KPI - an indicator for the achievement or improvement of which this position exists (marketing - attracting customers; seller - sales).

4. Weight depending on position. For example, a software manager sales KPI is up to 80% of the salary level. For a back office employee, it cannot be more than 50%, since the presence of his activities already creates value, and the KPI is additional motivation.

5. The optimal number of KPIs is from 1 to 3.

KPI is ineffective in the following cases:

High degree of uncertainty in the final result or product.
An employee's competencies are unique (in a company, in an industry).
We need a super result (build a house in 2 days).
The employee has no tools to influence the result. KPIs can be overwhelming and constricting, leading to regression.

The alternatives are: introduction of additional bonuses for super-results; description of the lower bar with a high degree of uncertainty in the result; checklist for a unique employee.

In this article you will find out

What are KPIs and what types of KPIs are
Why KPI systems often don't work
How much does it cost to implement a KPI system in a company?

This article is about developing KPI in the organization and understanding of the necessary criteria that must be taken into account to improve the efficiency of the implementation of the new system.

Any system of personnel motivation should be aimed at finding the relationship between the goals of the enterprise and the employees themselves. The effectiveness of such a linking of personal and corporate goals is possible in a situation where employees are clearly aware of the goals of the enterprise and understand the opportunity to influence their income (and not just receive a standard salary that does not depend on the employee's efficiency). Therefore, the remuneration of employees from the level of department heads should include a variable part - approximately 25% of the total income.

What are KPIs?

By itself, the KPI system cannot be considered a personnel motivation system. It is simply a tool for a control system. Today almost any indicator is called KPI. I can't understand why many businesses call KPIs the payment of percent on sales to managers. Or why KPI is usually called the labor force participation rate - probably just some fashion trends that are not entirely correct.

KPI - key performance indicators (performance indicators). Setting up a management system on KPI is based on the ability to achieve the main goal of the enterprise through the implementation of performance indicators of employees from various departments.

KPI types

Targets. These indicators reflect the degree of proximity to the set goal. We will pay special attention to these target indicators in the article.
Process indicators. Indicate the effectiveness of the process. They allow you to assess whether you can complete a particular process faster or reduce costs without compromising quality.
Design indicators. These indicators are related to the specific goals of the project - they indicate the effectiveness of the implementation of the entire project and its individual parts.
Indicators external environment... These indicators cannot be directly influenced. However, they should be taken into account, for example, when developing targets. Among the external KPIs, one can note the fluctuations in value, the prevailing price level in the market.

Is the KPI system effective for small businesses?

It makes no sense to introduce KPIs if the enterprise does not have a management system - when success depends solely on the efforts of the owner, who combines the functions of the chief financier, general director, chief personnel officer (these are mainly enterprises in the 1st phase of development).

The number of employees does not affect the success of the KPI integration. It is necessary to comply with another condition - the appropriate maturity of the business and an adequate accounting system. One of the classics of management emphasized that it is impossible to manage what cannot be counted. KPIs are countable key indicators. They can be qualitative (in the form of a rating, points, etc.) or quantitative (time, money, volume of goods, people, etc.). However, in any case, KPIs should be countable for objectivity and data comparison.

A mature accounting system does not necessarily include, for example, a trendy CRM module or other popular applications. It is possible to fix and process the corresponding parameters in Excel program... The main condition is to maintain not just formal accounting in the company, but also management. Consequently, there will be a clear understanding of the trajectory of movement of your money, the budget of income and expenses, there will always be an understanding of business trends, with the ability to calculate a balance.

When deciding on the relevance of KPIs in your company, you need to take into account - the implementation of the system will require expenses of at least a million rubles. Therefore, when investing in such a project, it is necessary to understand the expected return and the period of its receipt. With the normal operation of your system, with the achievement of the set goals and business development, but at the same time old, already proven management tools are used, you need to go to the settings for KPI only for a specific expressed reason, and not just to follow fashion trends. The KPI system will ensure the effectiveness of the result within the framework of product diversification projects, significant scaling of your business, increasing the market share by an order of magnitude, entering the regions, etc.

KPI development: how to implement key performance indicators

It is recommended to develop KPIs in a hierarchy from top to bottom - from the main goal of the enterprise to the goals of departments and functionalities. Sometimes the formation begins from the bottom - from the indicators and goals of a certain performer (as a rule, from a top manager to a middle manager), then the path begins upward towards the formation of a common goal. Indeed, at the level of everyday consciousness, it seems that it is much easier to set a goal for an employee than to achieve an understanding of the overall goal of the organization. But under this condition, there can be no guarantee of achieving the desired results on the scale of the entire enterprise, if the stake is placed on individual employees. Consequently, it will be necessary to verify the compliance of individual goals with the overall purpose of the enterprise. In fact, you will need to do the same work twice.

Determining the overall goals of the enterprise when implementing KPIs

First of all, when planning the creation of KPIs, a company needs to answer the question “why?”. Why does the company operate, what tasks did it come to the market for, why do consumers need it?

The chosen direction of activity on the market will depend on the answer to this question - from its current position to the chosen final goal.

You need to determine your goal, which is set for the long term - for example, after 3 years. When formulating your answer, it is not recommended to focus on the financial aspects. After all, finance is a fairly relative component, as evidenced by the recent crisis.

It is better to formulate the goal in such a way that the financial desire follows from it, but it is not clearly spelled out. This increases the stability of the system, despite changes in market parameters. The goal should not be associated with a specific unit, but with the market - therefore, actions will be initially tuned to market changes.

You can formulate your goals as follows - to be in the top three in the Russian yoghurt market, to break out of the TOP-10 companies in the furniture market, to enter the terminal communications market in Moscow and St. Petersburg, and to become a leader in certain regions.

All financial aspects will follow from the formulation of goals in the form of a desire to achieve high or leading positions in a certain market. Objectives for profit, turnover, share of costs and dynamics of enterprise growth will become clear.

After determining the overall goal of the company, it will be necessary to divide it into subgoals by asking the question "What needs to be done to achieve the main goal?" You should immediately pay attention - not what needs to be done, but what to "do". In the context of this formulation, “to do” means to move in a certain direction. And “to do” implies the implementation of a specific measure. If the main goal of the organization is presented as a specific action plan, then there is a risk of not achieving it, if one of the planned activities turns out to be impossible. If the direction of its movement to the target is correctly set, there will be an opportunity to maneuver - therefore, it is possible to choose plan A, plan B, etc.

KPI selection

In most cases, there is no problem in compiling a list of possible KPIs. Because managers are well aware of the parameters by which it is possible to assess the activities of departments. However, problems are accompanied by the selection of the key, most significant KPIs.

The presence of many key performance indicators, similar to the choice of only one indicator, leads to a deterioration in the ability to manage. Since too many indicators lead to a complication of the calculation procedure. When choosing only one key performance indicator KPI, 2 options arise - to confirm its achievement or not. But there is no room for maneuver to make changes in the work process in a situation where the results do not meet expectations.

Consequently, only a set of several top-level KPIs - preferably two or three - can provide room for maneuver. They can be selected based on the assessment of the importance of each of the KPIs by analyzing their weight.

Each indicator is expertly assigned its own weight so that the combined sum of the weights of all KPIs is one. You don't have to limit yourself in the number of KPIs. Weight must be determined taking into account the principle of necessity - what indicators need to be performed to achieve the goal (which are not just desirable, but necessary, without which it is simply impossible to achieve the goal). These indicators are characterized by the greatest weight. Then we remove the indicators with a weight below 0.1, and again distribute the weights between those KPIs that remain. The output will be no more than 3-5 indicators. Indicators with very low weight can then be taken into account for the motivation scheme as conditions for decreasing or increasing the size of the bonus.

The weighting is usually carried out by the CEO with a team of top managers, taking into account the priority of the company's tasks. By the weight of the indicator, one can understand what actions the company should make the main stake on in the foreseeable future (see. tab. 4).

Highlighting "leading" and "lagging" KPIs

Leading indicators - allowing, when deviations from the path to the goal are noticed, to intervene in a timely manner and make the necessary corrections to the situation. They support the management of the movement towards the set goal. An example of such an indicator is the level of stock in a warehouse. This parameter can be controlled in low or high seasons, making sure that there is a sufficient amount of raw materials in the warehouse to produce a certain amount of products, or you will need to purchase it additionally. Or there may be an excess of raw materials in the warehouse, it is old and must be sold to free up space for placing a new one. Taking into account the indicator "level of stock of raw materials", it is possible to make management decisions aimed at improving production efficiency.

There are not only leading but also lagging KPIs for key performance indicators. According to these indicators, the achievement or failure of their task can be stated, however, without the possibility of making adjustments while moving towards their goal. Therefore, if the goal is not achieved, lagging indicators simply indicate the damage to the enterprise. Consequently, lagging indicators play the role of stop factors in bonus schemes. In fact, if this indicator is not reached, the bonus will not be paid in full, or it will be significantly reduced. An example of such an indicator is staff turnover. After all, this indicator can be ascertained only by the fact - how many employees the company has lost over a certain period. The adoption of management influences can only relate to the next period. But it will not be possible to influence already on the current losses - they can only be fixed for the future.

Therefore, the bonus scheme, when calculating, includes in the formula not only the weight and percentage of a certain KPI, but also the number of leading and lagging indicators.

In addition to calculations, it should be recalled that the seller's remuneration should not be tied exclusively to one indicator (for example, to revenue or turnover), without taking into account the specifics of the market and seasonality. Since otherwise the business may face the trap of satiety, material factors lose their power of motivation. Consequently, the return for every ruble invested in employees gradually brings less and less return. And over time, the amount of investment in employees begins to exceed the return. A similar danger arises when an employee is provided with an income that exceeds the level he needs for his usual way of life (as a rule, it is achieved with 2 incomes of a specialist in his region in this specialty). The only thing to treat the "satiety trap" is by dismissing an employee who has ceased to bring returns - it will no longer be possible to achieve the desired effect by changing the payment scheme.

The formula for calculating the bonus based on KPI for the head of the commercial department

Bonus = (CF KPI 1 × A + CF KPI 2 × B + CF KPI 3 × C) × D, where:

BF KPI 1, 2, 3- max bonus fund, which is multiplied by the weight of KPI 1, 2, 3.

A- a correction factor to KPI 1 with a threshold value of 70% (if the plan is less than 70%, the bonus for this indicator will not be credited (A = 0); if the sales plan is fulfilled by more than 70%, the corresponding bonus will be accrued in proportion to the fulfillment).

B- correction factor to KPI 2, the threshold value of which is 85%. When this indicator is less than 85%, it is B = 0. When the level of 85% is reached or exceeded, the bonus will be accrued in proportion to the fulfillment. The coefficient is blocking - if the threshold value of KPI 2 is not met, the bonus will not be paid, regardless of the results for KPI 1 and KPI 3.

C- correction factor to KPI 3 (threshold value 60%). If the indicator is less than 60%, then C will be equal to 0, if it is performed at 61-100%, the charge is proportional to the performance.

D- stop factor, which is a general blocking correction factor, with the bonus payment being reset to zero if the minimum threshold values for any KPI have not been reached.

According to the proposed scheme, the seller's attention is focused on the amount of accounts receivable, along with the cost of the sales process and the level of sales, and not limited to achieving growth in turnover at any cost. Thanks to this, the company manages to achieve timely receipt of money, abandoning interest-free loans to staff or customers.

When will a KPI work and when not?

The KPI system will be effective under the following conditions:

with correct weighing and placement of all KPI indicators;
correct creation of the company's goals tree;
the accounting system will allow you to calculate all the KPI calculation formulas;
correct distribution of responsibility for goals (and processes) among the performers;
entering data into the accounting system by trained, uninterested people - not by those who performed the KPI data. In this case, it is necessary to enter reliable information;
linking KPIs to the personnel motivation system. The motivation system should be built with the priority of the goals of the enterprise over the goals of the employees, but with their obligatory consideration.

When the KPI system isn't working:

The management of the company was not involved in the creation of the goal tree.
It is impossible to calculate the KPI due to the lack of data in the accounting system, subjectivity or unreliability of their assessment.
Incorrect development of KPIs - without taking into account the corresponding indicators of achieving the set goals.
There is no link between KPIs and the motivation system.
Implementation of KPIs is not for all departments. In this case, the control system will be skewed.
KPIs are tied to the current motivation system, but without taking into account the personal motivation of employees for whom KPIs have been introduced.
Divided the achievement of KPIs and the payment of the bonus for them for a period of more than 3 months. In this case, employees simply get tired of waiting, ceasing to associate the right actions and reward. With long projects in a company, you need to tie KPIs and a bonus for achieving goals not only to the final results of the project, but also to intermediate stages.

How to overcome staff resistance when implementing a KPI system

1. You need to explain to employees that what is being implemented is related to what they have already done the day before. Thanks to this, there will be no expectation and fear of radical changes every Monday with the cancellation of past results.

2. KPI is a rather complex tool. Therefore, it is necessary to explain this methodology to all users in advance - to receive feedback in test mode, discussion, discussion of arisen questions, etc.

3. Participation in the project of setting motivation for KPI of the General Director and the team of top managers becomes a critical success factor. When the management doubts the overall success of this project- such undertakings do not make much sense at all.

4. Top managers should also involve middle managers in the KPI development workflow - that is, employees who will be forced to evaluate and plan their own actions according to the new approved system. They must work together to create a phased plan for the implementation of a new project - usually the commercial departments are engaged in the first testing of the system, and at the very end - the back office.

5. It is necessary to encourage the activity of employees when introducing changes - you need to celebrate any, even the smallest, victories.

6. Ensure that your workflow is consistent with the changes you make. Therefore, it is necessary to separately plan the transition from the current system of regulations to the new one - this will not happen instantly, therefore, it is necessary to separately take into account and control the time of this transition.

7. It is necessary to adhere to continuous changes in the company. However, in order to ensure continuity and consistency, the optimal situation is when all changes follow from the main goal of the organization.

Motivation, Incentives and Labor Remuneration

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