Scribd
Upload
18 views1 page

Performance Measurement Success

A KPI is a type of performance measurement that evaluates the success of an organization or activity. Choosing the right KPIs relies on understanding what is important to the organization. Performance indicators are associated with assessing business performance and identifying improvements. The proper use of performance indicators is vital for reliable decision making and risk minimization.

Uploaded by

Diego Milla
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
18 views1 page

Performance Measurement Success

A KPI is a type of performance measurement that evaluates the success of an organization or activity. Choosing the right KPIs relies on understanding what is important to the organization. Performance indicators are associated with assessing business performance and identifying improvements. The proper use of performance indicators is vital for reliable decision making and risk minimization.

Uploaded by

Diego Milla
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

KPI

A performance indicator or key performance indicator (KPI) is a type of performance


measurement.[1] KPIs evaluate the success of an organization or of a particular activity
(such as projects, programs, products and other initiatives) in which it engages.[2]
Often success is simply the repeated, periodic achievement of some levels of operational
goal (e.g. zero defects, 10/10 customer satisfaction), and sometimes success is defined in
terms of making progress toward strategic goals.[3] Accordingly, choosing the right KPIs
relies upon a good understanding of what is important to the organization.[4] What is
deemed important often depends on the department measuring the performance – e.g. the
KPIs useful to finance will differ from the KPIs assigned to sales.
Since there is a need to understand well what is important, various techniques to assess
the present state of the business, and its key activities, are associated with the selection of
performance indicators. These assessments often lead to the identification of potential
improvements, so performance indicators are routinely associated with 'performance
improvement' initiatives. A very common way to choose KPIs is to apply a management
framework such as the balanced scorecard.
The importance of such performance indicators is evident in the typical decision-making
process (e.g. in management of organisations). When a decision-maker considers several
options, they must be equipped to properly analyse the status quo to predict the
consequences of future actions. Should they make their analysis on the basis of faulty or
incomplete information, the predictions will not be reliable and consequently the decision
made might yield an unexpected result. Therefore, the proper usage of performance
indicators is vital to avoid such mistakes and minimise the risk.[5][6]

You might also like