ESTABLISH KEY PERFORMANCE INDICATORS
Performance indicators give everyone involved in the plan clear guidelines on what is expected of
them, specific milestones, timelines and deadlines, and are a method of monitoring progress towards
desired targets and outcomes. One of the most common methods used to track progress towards
individual targets and departmental goals is to establish key performance indicators (KPIs).
A KPI is a quantifiable measurement used to compare or gauge performance towards achievement of
pre-defined operational or strategic goals.
They monitor efficiency and evaluate effectiveness of a system. The results from monitoring KPIs can
be used to monitor progress towards objectives, identify successful completion of tasks and areas for
improvement, and to demonstrate accountability. They may also be called key success indicators or
KSIs.
Set SMART KPIs or objectives
When writing objectives and KPIs, you need to think about the outcomes you want to achieve and
their timeframes. The more specific your objectives are, the easier they are to measure and
demonstrate success. A useful tool for writing clear KPIs and objectives is the SMART technique.
S KPIs and objectives should be written in terms of outcomes. What exactly is to
Specific be accomplished? Who is involved? Where will it be accomplished and under
what conditions?
M What measures will be used to evaluate their success? Progress points and
Measurable milestones can also be written into goals to help motivate staff.
A Goals should be a challenge yet attainable within the given resources and
Achievable timeframe. If staff perceive goals as unachievable, they can be overwhelmed
and demotivated.
R Make the KPIs and objectives clearly relevant to the individual or team. Do
Relevant employees understand how they link in with the ‘bigger’ picture? Goals should also
be recorded. Writing goals down ensures they are thought through properly.
T Time- based Achieved by when? Timelines apply pressure and give an end point to aim
towards; however, they should be achievable.
What are some common features of well-designed KPIs?
KPIs generally share three common features: an indicator, a target and a timeframe.
An indicator defines what is being measured, the target is what you are aiming for, and the
timeframe is the time it is to be achieved by. The target is usually a number and is the measurable
component of a SMART KPI.
Well designed KPIs have the following characteristics.
• Written in terms of outcomes
• Measurable and quantifiable
• Challenging
• Clearly communicate goals
Examples:
Operational area Key Performance Indicator
Performance measure Target Timeframe
Workplace health and Lost time due to accidents is maintained at zero this calendar year.
safety again
Customer Complaints Reduce customer by 5% every month for the next 12 months.
complaints
Average customer Increase average customer by $3.00 over the two-week
spend (total sales per spend January sale period.
head)
Environmental Reduce average utility (gas by a minimum of 10% over the next three
sustainability & electricity) consumption per year years.
Carlton Bistro operational plan Example
KPI Data Monitor
Strategy
Action/ Activity source
Dining area Remove all All furniture, décor and free- Physical Site inspection by
renovation furniture, fixtures standing fixtures removed from worksite project manager
and fittings bistro dining area prior to and building
commencement of Stage contractor
st
2 on May 21
Examples of Different types of KPI
Operational area KPI target/goal example Data used for How monitored
measurement
Workplace Lost time due to accidents Accident reports Statistical analysis of accident
health and maintained at zero again this reporting
WorkCover claims
safety calendar year. Monthly report to WHS
committee
Customer Reduce customer complaints Complaint logs, Recording and analysis of logs and
complaints by 5% every month for the feedback forms or forms
next 12 months. databases Monthly report to relevant
department
Average customer Increase average POS system sales POS report analysing daily sales
spend customer spend by $3.00 data: total dollar data
(total sales per over the two- week value of sales,
head) January sale period. number of sales
transactions,
customers, items
sold
