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Recently, the scope of application for the procedure for assessing the productivity of employees has been expanded - it has become used not only for top managers. Evaluation of key performance indicators (KPI of employees) has ceased to be a hallmark of foreign companies; case studies can be found in different industries and for various categories of employees from marketers and business analysts to financiers and economists.

Managers are assessed by competencies by Aleksey Shirokopoyas, Expert in the development and assessment of managerial competencies. Developer of educational and game programs. Project founder. 8-926-210-84-19. [email protected]

Typically, KPI-based motivation systems measure key performance indicators (KPIs of employees) because they are based on SMART criteria. Therefore, such motivation systems are convenient for applying to employees employed in profit centers, where there are objective, and most importantly, measurable criteria: sales volumes, financial key performance indicators (KPI employees), deadlines, etc., and work based on SMART -goals and objectives, has a specific result. However, not all types of work can have such goals and objectives. For example, how to evaluate process activities (not implying the achievement of a specific result), where there are no SMART tasks and those who are "remote" from the economic and operational processes of the company - "clerks": a secretary, a call center operator, a system administrator of a support service, HR inspector, accountant, personnel officer, etc.? These workers (back office) perform routine functions, and, unlike the work of managers, the work of "clerks" is difficult to evaluate. How to assess the quality side of the work of this category of personnel?

Key performance indicators (KPI employees) - what should I pay attention to?

In this case, it is necessary to evaluate the performance of functions. To a large extent, this is only a qualitative assessment, and, as you know, a qualitative assessment is an expert assessment. The method proposed in the article helps to evaluate the work from this side.

Each leader appreciates in his employees the ability to perform work quickly and efficiently. And laments when these requirements are not met. Often he has to put up with this and hope that he will someday find a better employee, but everything repeats with a new employee. Why is this happening? To answer this question, let's delve into the nature of the parameters under consideration and their relationship.

What is "working speed"? From physics, we know that speed is the ratio of the amount of work to the time it takes to complete it. This means that the manager evaluates his employee according to three parameters: the amount of work, the time it takes to complete it, and the quality of the work.

Thus, any activity can be evaluated by three key performance indicators (KPI employees), let's call them the "efficiency triad" (see Appendix):

1. Number of work- production rate, share of excess production, additional assignments in excess of the job description, etc.
2. Quality of work– technology compliance, error-free, no customer complaints, defects, etc.
3. Work completion time- compliance with the set deadline, early implementation, exceeding deadlines, etc.

Moreover, each leader can decide for himself what kind of work he evaluates:

• the number of operations per job function (for example, the function of a lawyer is the preparation of contracts, and the number of contracts is the number of operations in this function);
• the scope of functions in excess of the standard, which is determined by the job description (for example, a lawyer according to the standard must process at least 100 contracts monthly);
• solution of additional tasks, instructions of the head beyond official functions (projects, one-time tasks, etc.).

However, it is not so easy to "reconcile" the speed of work and quality. Indeed, one can be convinced that it is easy to implement only any two parameters of the "triad" and it is difficult to make sure that all tasks are completed on time, efficiently and in the right amount. It is difficult to balance such a system - and this is the responsibility of the leader.

Most often, the work is done efficiently and on time, but perhaps this will not be the entire amount of work. Often an employee manages to complete all tasks, but either with a decrease in the quality of some of them, or with violation of deadlines.

And you can completely forget about the expectations of early completion of all tasks while maintaining excellent quality to the authorities. Not only that, managers are accustomed to seeing an employee's ability to complete an increased volume of tasks ahead of schedule and with superior quality as signs of underutilization rather than talent. Isn't this the reason for the modern personnel trend of "talent search"? The employers' dream of so-called talent is the dream of employees who are able to sustainably fulfill these three criteria to the fullest. Agree, there are not so many of them.

In itself, accounting for tasks and functions is a creative matter. They have different significance, which means they should be with different weights. In addition, all key performance indicators (KPIs of employees) can have their own weight in the system (see Table 1), which is determined by the manager based on current tasks, work characteristics, etc., thereby highlighting what is most important. For example, timing is important for the recruitment department, and quality is important for the accounting department.

The final grade is calculated as a weighted average of grades. This is the sum of the products of the assessment for each of the key performance indicators (KPI employees) and its weight:

35% x 3 + 40% x 4 + 25% x 1 = 1.05 +1.6 + 0.25 = 2.9 (with a maximum of 4 points)
or
35% x 75% + 40% x 100% + 25% x 25% = 26.25% + 40% + 6.25% = 72.5%

The second option for calculating the final score of this technique is given in the Appendix.

It is worth repeating: naturally, such assessments are subjective. If the scope of work can be determined and the time frame is measurable, then the quality (in the absence of specialized measurements, for example, the number of customer complaints or the results of a mystery shopping assessment) is assessed subjectively.

Key performance indicators (KPI employees) - what increases the objectivity of the methodology?

Firstly, evaluation criteria are formulated in a special way. This was not done by chance: after a month, the manager cannot always remember in detail which deadlines were violated and how many cases the employee completed with proper quality. However, he developed a general, holistic picture of the work of a subordinate, written in “large strokes”. With the same "large strokes" he is invited to draw a "portrait of efficiency" of the employee.

Secondly, the objectivity of the methodology increases the practice of its application. More than ten years of experience in using the methodology shows that the effectiveness is high when it is filled out by both the manager and the employee himself. They then discuss their results, and this makes a lot of sense:

• the employee remembers his tasks better, and the manager can forget something, confuse, because he has several subordinates;
• the manager has his own view on quality issues, while the employee tends to forgive himself for minor “sins”;
• the manager is often inclined to consider the violation of deadlines as low quality of work, confusing these concepts, and the employee may be proud of the quality of the work, while neglecting the value of meeting deadlines or volume.

Thirdly, by virtue of these effects, both sides strive to reach an agreement, which, as the satirists have formulated, is "the product of non-resistance of the parties." Since the main practical application of this method is the ability to regulate the monthly or quarterly premium (see Table 2), it is this circumstance that makes the technique valuable, because agreement leads to justice, and this is more important than the accuracy of measurements, and motivates more than mathematically accurate and sometimes impersonal scores.

Fourth, the objectivity of the methodology increases due to the “scale effect” if it is applied in all divisions of the company. This effect makes it possible to compare the result with objective data, and this is another powerful verification criterion and a source for correcting results. So, a senior manager, having received a complete picture of the assessments for the company (a set of performance assessments of managers employed in profit centers, and assessments of the effectiveness of employees of the company's cost centers), can compare it with financial and other objective key performance indicators of an employee (KPI of employees) of the organization's efficiency in in general. It may turn out that the overall assessment of all employees according to the Efficiency Triad methodology will be overestimated compared to the objective key performance indicators (KPIs of employees) of the organization. Then the employer has the right to introduce a correction in the payment of bonuses by his authority.

Table 2 shows that employee Danilin had a vacation in February, and in accordance with the company's policy, no bonus was accrued during this time. Shirokova has a tendency to increase efficiency. For other workers, efficiency has declined.

Please note: the implementation of even 50% of the plan can be rewarded, especially since at the same time three key performance indicators (KPIs of employees) of the “triad” are difficult to achieve, and two out of three can be high due to the resource of the third. In this regard, any number less than 50% is also a definite achievement.

Key performance indicators (KPI employees) - systematic application of the method

The method can be applied in a cascade (when higher-ranking employees evaluate downstream ones), across the entire organization and regardless of whether employees have “objective key performance indicators (KPIs))” or not. The cascading application of the method gives the assessment a systematic and additional objectivity, especially when it comes to awarding bonuses.

And if, moreover, the method is applied for a long time, then it acquires a number of useful properties. Let's consider them.

1. The higher manager, evaluating the lower one, at the same time evaluates the activities of his unit: after all, the results of the work of the manager are made up of both his personal efforts and the efforts of his subordinates. The advantage of this method is that the superior gets the opportunity to compare data and draw conclusions about the effectiveness of the manager and his subordinates, the unit as a whole, and even about the management style.

So, the figure shows that the subordinates of the head of department 1 have different skills (this is clearly shown by the "mini-diagrams"): the engineer works slowly, but with high quality, the specialist works quickly, but not with high quality. The superior manager evaluates the work of the chief, and hence the entire department 1 as follows: the department solves a large amount of tasks with average quality and with some violation of deadlines. And a general analysis of the work of the entire department shows that the manager has an additional amount of tasks - in addition to those that his subordinates solve, and this may indicate problems with delegation. In addition, the activities of the boss somehow "worsen" the quality of the engineer's work and "slow down" the work of the specialist. As a result, the terms and quality of the work of the department are not above average. The head of the head of department 1, perhaps, should think about his effectiveness as a manager.

The head of department 2 works quickly, but gives out fewer cases than his subordinate. Leading specialist slowly performs a large amount of work. This means that this boss takes on those tasks that can be solved quickly, while the quality of his work cannot be called low. Obviously, everything is in order here with delegation, quality of work and meeting deadlines, and hence with responsibility.

1. Analysis of performance dynamics over time. It can be seen whether the performance of an employee increases during the probationary period or decreases over the years. The most illustrative picture is created by comparing the dynamics of efficiency assessments with other factors. So, in addition to the comparison of the level of efficiency with the vacation period shown in Table 2, one can see signs of an upcoming “burnout”, which are especially noticeable against the background of unchanged motivation, a drop or increase in efficiency associated with a change in leadership, the impact of corporate news on the productivity of employees or departments, and etc.
2. Analysis of the work style of an individual employee: a comparison of different parameters of the "triad" will show the zones of its effectiveness and inefficiency. For example, one always works quickly, but not with sufficient quality, while the other solves only part of the tasks quickly and efficiently. From this, recommendations are born on the use of workers: the first one should be put in the area where speed is needed, and in relation to the second, one should also understand his motivation and interests in solving specific problems.
3. Comparison of the ratings of employees allows you to judge their usefulness for the organization, and comparing the ratings of the heads of departments - to make a rating of departments and managers. So, at the end of the year, you can calculate the average or total annual estimates and determine who is more efficient and who is less and due to what factors: who is the “fastest” worker, who is the most “thorough”, who at the same time performs more tasks. At the same time, the content of labor and the employee's belonging to one or another unit do not play a role.

So, despite the obvious subjectivity of the Efficiency Triad method, its useful properties are obvious:

• the method is applicable to all positions, regardless of whether they are managerial or executive;
• employee performance evaluations can be accumulated and compared;
• accumulating estimates, you can track the dynamics of the work of individual employees and even departments, monitor the onset of "burnout", draw conclusions about their strengths and weaknesses;
• comparing the assessments of subordinates with the assessments of the manager, one can draw conclusions about the management style, identify areas of inefficiency in departments;
• due to the standard approach, the methodology is easily implemented in document management systems (Lotus Notes, MS Outlook, etc.) and ERP (based on Oracle, SAP, Microsoft, etc.), which are widely used in the corporate world;
• the method can become an addition or a common format for existing systems for evaluating the effectiveness and efficiency of MVO, key performance indicators (KPI employees), bring their data to a single view.

And most importantly, this is not just another “precise tool”, but a way to mediate a dialogue between a manager and a subordinate on the issue of remuneration. After all, nothing reduces employee motivation as much as the lack of recognition and understanding of development paths. In such a dialogue, the employee can understand what his boss is dissatisfied with and what he pays attention to. In other words, the method gives motivation a very important managerial effect - feedback to the subordinate about his work.

should be calculated to diagnose corporate problems. Key performance indicators of an employee allow you to take timely measures to improve the efficiency of his work.

We are opening a new cycle dedicated to the topic of KPI, launched last year1. This time we will consider the main steps for implementing a personnel motivation system tuned to KPI. Let's focus not on the method as such and general approaches to functionalities, but on key indicators that usually fall into the company's top management scheme. Assimilation of this material will require a certain amount of patience from the reader, because the presentation of general principles is always perceived easier than the analysis of particulars.

Sustainability is progress without impatience.
Nassim Taleb

For top managers, as for all other employees of the company, there are general rules, and there are rules that apply only to a specific position.

How to send an employee to

Usually, the general rules for motivating all managers (including "tops") include the following:

• objective analysis and assessment of the position held - the complexity, area and degree of responsibility of the work performed;
• the key functions and goals of the employee and the share of their participation in achieving the goals of other employees are taken into account;
• at least three and no more than five KPIs of employees are taken into account for the main goals of the employee 2 ;
• business processes in which employees participate, the degree of personnel involvement in the main business process are taken into account.

However, along with the general rules, there are also specific rules for each position, taking into account the individual responsibility of the top manager for the area of ​​activity (process, project) he leads and goals.

The specific rules for the CEO are usually set by the company's shareholders, as the CEO is the spokesman for their interests, the "translator" of strategic desires and intuitive expectations from the business into the language of operational management. Sometimes shareholders define these specific rules for key top positions, for example, for a commercial director, financial director, production director.

Usually, shareholders indicate what they would like to see as the final result of the company's activities, and it is in connection with this that certain KPI parameters of top managers are called. Often this sounds very general, for example: “All top managers should participate not only in profits, but also in the risks of the company” - translated into KPI language, this is likely to be at least two indicators: by total profit and by profitability across departments. The remaining indicators relate directly to the goal or functionality for which each top manager is responsible.

The CEO is "easiest" because he is responsible for everything. The duty of the State Duma is to ensure the effective functioning of the economic object entrusted to it. And this means that the projections of all goals and processes are reflected in the area of ​​his responsibility. Figuratively speaking, the CEO is responsible for everything he does and for what his top managers do.

If this is taken literally, the KPI diagram of the State Duma will be voluminous and confusing, because it will have to reflect the KPI of all his deputies, as well as his own indicators, since, despite the popular saying “do nothing yourself if there is a good deputy”, The active CEO has a lot to do on his own.

To build a target 2 KPI chart for the CEO, you can go one of two ways.

Method 1 (more correct, but also more complex) - building a Strategic Map of the CEO.

The strategy map includes all the goals of the GC (and usually these are all the goals of the top-level company), divided into four main perspectives: development, processes, customers and finances 3 . At the same time, the goals are not arranged in an arbitrary order, but in a hierarchy, reflecting the connectedness (which goal must be achieved earlier in order to move to the next one) and the strength of the connection (to what extent the achievement of the previous goal is a necessary and sufficient condition for the fulfillment of the next one). An example of a Strategy Map is shown in figure.

The numbers next to the targets indicate their weight. The goal that includes the maximum number of connections from other goals has a weight of 1, and the rest of the goals - proportionally. In the presented figure, the most important, weighty financial goal for the State Duma is to “increase the capitalization of the company”. It includes with an equal weight of 0.5 (equal weight is an assumption to simplify the example) two more goals: the client one “to have at least 70% of the market share in the regions of presence” and the process one “to provide the necessary resources for development”. The client goal includes three more goals from a process perspective. Their weight is divided proportionally already in relation to the weight of 0.5. The KPIs developed for each goal with SC are reweighted according to the weight of the goal, and only those KPIs that receive a weight of at least 0.1 are left for the final calculation.

The result will be a kind of KPI table that fully takes into account all the nuances, but requires a really advanced enterprise accounting system in order to be able to calculate everything correctly. We will not give all table, since this is quite a voluminous material for an example, we will limit ourselves to two goals with SC and KPI for them.

The KPI sum is not equal to one, because for the example we did not use all the goals from the CEO's Strategy Map.

Premium / bonus \u003d (BFKRP x A + BF KPI2 x B + ....) x D,

where BF is the maximum bonus fund according to the indicator. The share of each KPI in the total BF is proportional to its weight;

A, B, ... etc. - coefficients for the performance of indicators;

D is a stop factor blocking the payment of the bonus if the minimum threshold values ​​for each indicator are not reached (these can be different “thresholds” for different indicators or a single rate for the company, for example, 80% of the plan). Failure to reach the minimum threshold accepted by the company for any of the indicators included in the calculation formula blocks (or significantly reduces) the bonus payment. That is, the value of the coefficient D changes from 0 to 1.

This method is correct, because it allows you to take into account the significance of both goals and KPIs, but it is usually difficult to implement, so it is used when the company does not have a clear understanding of the specific significance of goals, i.e. it is difficult to prioritize their achievement "on the forehead", directly, and it is required to carefully trace the connection, the conditionality of some goals by others, so as not to miss anything in the final KPI scheme.

If the company clearly understands exactly what goals it sets for the foreseeable period and in what sequence, then you can use an easier way to create a KPI chart for the CEO.

Method 2. Development of a KPI map "on the forehead".

When implementing this method, all the goals of the CEO are written out, which are indicated to him by the shareholders (most often it is all the same profit and profitability), KPIs are determined for them, their weight is assigned by an expert (which should be equal to 1 in total) and the conditions under which the bonus is paid in full or reduced amount. The strategic map is not built.

Let's assume that the goals of the CEO, as outlined to him by the shareholders, are measured by the following KPIs:

• Receipt of funds (PDS).
• Profit.
• Repeated contracts with clients for the period (in kind or in monetary terms).
• Percentage of timely completion of tasks (upper management level).

Revenue per one employee of the company (it can be broken down by departments or separately for production staff and office staff). For each KPI, two threshold values ​​are set: the first - if it is not reached, the bonus is not paid for this particular KPI, and the second - if it is not reached, the bonus is not paid at all, regardless of the percentage of other KPIs. The CEO bonus/bonus formula thus includes five indicators, each with its own threshold value. Then the CEO bonus calculation table might look like the one shown in table 2.

The calculation is made on the basis of those planned and actual values ​​that are entered into the table from the company's accounting system.

The main rules that should be taken into account when linking KPIs to the system of motivation for top managers are as follows:

1. Indicators must be supported by the accounting system.

2. The performance of the CEO should include the performance of other top managers (in fact, the performance of the CEO is the performance of the company).

Indicators should not be more than five or less than three.

3. The weight of the indicator correlates with the share of the bonus fund allocated to the total premium.

4. Each indicator has threshold values ​​at which no bonus is paid for this particular indicator.

Often, a general stop factor 4 is introduced - the minimum value of performance of indicators, failure to achieve which at least one of the indicators cancels or significantly reduces the total bonus, regardless of the percentage of performance of other indicators.

Approval of the scheme of indicators and bonuses to the CEO is usually carried out by shareholders. The general director's bonus scheme serves as the basis for further development of bonus schemes for the rest of the company's top managers.

Hello! In this article, we will talk about the KPI system.

Today you will learn:

1. What is KPI.
2. How to calculate this indicator.
3. How to implement a KPI system in an enterprise.
4. About the pros and cons of this system.

What is KPI in simple words

KPI - this is a coefficient that determines the effectiveness of a particular enterprise: how well it functions, whether it achieves its goals.

The decoding of this abbreviation is as follows - Key Performance Indicators, which is usually translated into Russian as "key performance indicators".

If translated literally, the word “key” means “key”, “essential”, “indicators” - “indicators”, “indicators”, but with the word “performance” there are difficulties in translating, since it is difficult to interpret it unambiguously here. There is a standard that gives the most correct translation of this word, dividing it into two terms: efficiency and effectiveness. Efficiency shows how the funds spent and the results achieved are related, and performance - to what extent the company managed to achieve the result that was planned.

Therefore, it is more correct to translate KPI as “a key performance indicator”. In simple terms, so to speak, for dummies, you can see that this system helps to understand what measures need to be taken to improve efficiency. Efficiency covers all the actions performed for a set time period, as well as the benefits received by the enterprise from each individual employee.

KPI indicators are as follows:

• Performance KPIs- shows the ratio of the spent money and time resources with the achieved result;
• Cost KPIs- shows how many resources are involved;
• KPI result- illustrates the result obtained during the execution of tasks.

Because this system is not easy to implement, you should adhere to certain rules and principles that can become indispensable assistants when switching to KPI:

1. The 10/80/10 rule. It states that a company must define 10 key performance indicators, 80 performance indicators, and 10 performance indicators. It is not recommended to use many more KPIs, because this is fraught with overloading managers with unnecessary unnecessary work, and managers will certainly attend to finding out the reasons for not meeting indicators that have little effect on performance at all.
2. Coordination of production indicators and strategic plan. Performance indicators are of no value if they are not correlated with the current Critical Success Factors (CSF) combined in a balanced scorecard (BSC), and .
3. Manageability and controllability. Each division of the company responsible for its indicator must be provided with resources to manage it. The result must be controlled.
4. Integrate performance measurement, reporting, and performance improvement processes. It is necessary to introduce a procedure for evaluating indicators and reporting that will push employees to the required specific actions. For this purpose, reporting meetings should be held to consider the issue being resolved.
5. Partnership. In order to increase productivity successfully, it is worth building partnerships between all involved employees. Therefore, the way to implement a new system needs to be developed together. This will allow everyone to understand what the advantages of innovation are, as well as to be convinced of the need for change.
6. Transferring efforts to the main directions. In order to increase productivity, it is necessary to expand the powers of specialists: help in, offer to develop their own KPIs, provide training.

How to calculate KPI

Paragraph 1. To calculate KPI, you need to select from three to five performance indicators, which will be the criteria for evaluating a specialist. For example, for an Internet marketer, they might be as follows:

1. The number of visitors to the site attracted by the specialist.
2. A figure that shows how many purchases were made by customers who have previously contacted the company.
3. The number of commendable recommendations, customer responses in social networks or on the organization's website after purchasing a product or service.

1. new customers - 0.5;
2. buyers who made a second order - 0.25;
3. positive recommendations - 0.25.

Point 3. Now you need to analyze the data for all selected indicators for the last six months and draw up a plan:

Item 4. The next step is to calculate KPI indicators in Excell. It is necessary to use the KPI calculation formula: KPI index = KPI Weight * Fact / Goal.

Here, the goal is the indicator that the employee must achieve according to the plan, and the fact is what he has worked out in reality. The final indicator is 113.70%, this is a good result, however, if we look at the table in more detail, we can see that the marketer did not fully comply with the planned standards.

Item 5. We calculate wages. We will be based on the fact that the total earnings of a marketer are $800, of which the fixed part (salary) is $560, and the variable (bonus) is $240. For a 100% index, the employee is entitled to a salary and a full bonus, but due to the fact that the plan is overfulfilled, the marketer will receive additional bonuses in the amount of 13.7% of the bonus part, that is, $ 32.88. As a result, the employee's salary will be $560 + $240 + $32.88 = $832.88.

But when an employee does not fulfill the plan, and his performance indicator is below 99%, then the size of the bonus is proportionally reduced.

With the help of such calculations and drawing up a table, you can see the problems and difficulties that an Internet marketer faces.

Poor performance may be due to the fact that the plan is drawn up incorrectly or the loyalty strategy itself is incorrect. The problem area needs to be controlled, and if things do not improve over time, then the right way out of the situation is to change the performance indicators.

Thanks to this approach, an understanding of the principle of operation of KPI is formed. Focusing on the goals, the calculation can be supplemented with new values. This can be a system of penalties, the number of solved and unsolved problems, and much more. For example, if the work according to the plan is less than 70% done, the employee will not receive a bonus at all.

There is also an alternative way to calculate salaries in relation to the percentage of the plan completed:

KPI in practice

KPI-performance indicator is used by almost all companies that are engaged in direct sales. Consider some examples for a sales manager. Having adopted the approved key indicators, he will see a clear picture of his activities: it will become clear to him how much goods need to be sold in order to reach a certain income, which ones.

For an insurance consultant who is new to his profession, the optimal performance indicator would be 1/10: to sell one insurance policy, you need to meet with 10 potential buyers.

There is also a result KPI, for example, “the number of new customers is not less than n”, “sales volume is not less than n”, etc. These indicators are personal, and it is better when their number is less than 5, and most importantly, they should be easily measurable and clearly articulated.

In addition to motivating employees, company leaders use KPI as a tool to analyze the work of their subordinates.

This system allows you to clearly see the gaps in activities and at what stage they arose. For example, the boss keeps track of the manager's client base, how many calls and meetings the employee makes. If these indicators are met in sufficient volume, but there are few sales, it can be concluded that the employee lacks certain knowledge, skills or personal qualities for successful work.

KPI and enterprise planning

KPI indicators can be used in planning and monitoring activities. After the work has been done, the actual indicators are measured, and if they seriously deviate from the planned ones for the worse, then further activities are analyzed and adjusted. Since all indicators are "dictated" by the real process, and not invented independently, such planning will contribute to the achievement of the necessary goals of the organization.

How to motivate staff to achieve KPIs

Thanks to the use of the KPI system, planned and actual indicators are fixed during remuneration. This gives the manager a clear understanding of how to motivate an employee and for what. At the same time, the employee also clearly sees the pros and cons of his work and is aware of what actions can bring him a reward, and for what a penalty is due.

For example, an insurance consultant sold more insurance policies than planned and expanded the client base with many new clients. Thus, he exceeded the plan and, in addition to his salary, he will receive a bonus in the form of a bonus. On the other hand, if the same manager sold much less policies than planned, he may lose the bonus altogether and receive a "bare" salary, because his personal performance will be low.

However, you can motivate employees not only with money.

For the achievement of indicators, you can be rewarded with interesting trainings paid for by the company, unscheduled days off, gifts and other "carrots" that will inspire the employee no worse than money. But in this case, the employee's salary is always fixed, and according to the KPI system, points are calculated that the employee can exchange for the desired bonuses.

To create a KPI for employees, you need to focus on a common goal for all employees and strong motivation. Working in a team of interested specialists, like clockwork, can lead the company to achieve all its goals in a short time.

When is KPI not needed?

In a young company that has just begun its existence, it is not advisable to introduce a KPI system. The management system has not yet been formed here, and successful development is due to the work of the General Director. Most often, he also performs the functions of specialists in finance and personnel.

And also, you should not implement KPIs in those departments that, because of this, may adversely affect other departments of the company. For example, an IT service, whose representatives must solve the problems posed to them (repair of office equipment) as soon as possible. After all, it happens that one of the employees' computer failed, and the work stopped, and the entire department depends on the work of this employee.

If the salary of an IT specialist is calculated according to the KPI system, then he will not immediately go to work. First you need to make a request for the elimination of damage. This application must be approved by a senior specialist of the IT department, after which the task is queued for implementation and awaits consideration.

As a result, a task that takes 5 minutes to complete takes much longer, during which the work of the entire department, where one computer has broken, does not move at all.

That is why it is useful to implement a KPI system wisely, otherwise it can do much harm.

Mistakes when implementing KPIs

The most common mistake is introducing KPIs for statistics alone.

Ultimately, it turns out that the indicators of one division have no connection with the indicators of another.

For example, the supply service of one enterprise needed to cut costs. Therefore, in order to receive raw materials at a discount, employees purchased them in large volumes, and also purchased defective goods. This led to the overcrowding of warehouses, the freezing of finances in raw materials, which blocked all the advantages.

Meanwhile, the production department had its own priority indicator - the utilization rate of the production equipment. To make efficient use of time, employees churned out certain products to save valuable minutes on machine tool conversions. But this inevitably affected the implementation of the sales plan by the commercial department, because there was no necessary assortment, and in a specific period of time the client could purchase only one type of product.

As a result, a situation has developed where everyone pulls the blanket over themselves, and no one reaches the goal. The result was reduced to zero, and all the work was done in vain.

Another common mistake is focusing solely on material indicators that are the result: sales, income, and so on. However, only when key indicators are not financial, but proactive in nature, it is possible to achieve goals much more effectively.

For example, how many calls should a sales manager make, how many meetings should be held, how many contracts should be concluded in order to achieve the same resulting KPI? It is on the basis of such non-financial factors that the system of employee motivation should be built, and the heads of departments should be guided directly by financial factors.

And also a serious mistake will be the situation when the persons responsible for this or that indicator are not indicated. For example, the order of incentives does not imply bonus payments or their reduction by the head for the performance or non-performance of the plan. In this case, the boss cannot be responsible for the actions of subordinates, because he has no way to influence them.

Pros and cons of implementing a KPI system

Working on a KPI system has many advantages:

• It has been established that in companies with such a system, employees work 20-30% more efficiently.
• Specialists will clearly understand what tasks are priorities and how to accomplish them.
• With a well-implemented system of indicators, the control of the company's activities is greatly facilitated, due to which problems are detected already at the stage of their occurrence and are solved without having time to cause harm.
• When calculating wages, the principle of justice applies: those who work diligently get more. This allows the organization to retain valuable staff.
• The wage fund becomes a means of motivating staff, and not the main source of expenses.

There is a KPI system and disadvantages. First of all, the disadvantage is that a lot of time and effort is spent on implementation, because all indicators need to be worked out in detail. Most likely, it will be necessary to retrain employees, explain to them information about changing working conditions and new tasks.

However, the main drawback is that the effectiveness in the end is not always evaluated correctly. This can be avoided if, at the stage of system development, the criteria by which the qipiai will be assessed are flawlessly formulated.