East Asian Journal of Multidisciplinary Research (EAJMR)

Vol. 2, No. 8, 2023: 3261-3268

Key Performance Indicator: Concept, Implementation to

Performance Management

Harry Purwoko1*, Kamsariaty2, Rubadi3, Joned Ceilendra Saksana4, Josua

Panatap Soehaditama5
1Institut Transportasi dan Logistik Trisakti, Jakarta,
2Akademi Maritim Nusantara, Banjarmasin,
3Universitas Elpifour, Jakarta,
4STIE Ganesha, Tangerang Selatan,
5Institut Keuangan Perbankan dan Informatika Asia Perbanas, Jakarta

Corresponding Author: Harry Purwoko [email protected]

ARTICLEINFO ABSTRACT
Keywords: Key Performance This article contributes to Key Performance
Indicator, Performance Indicator (KPI) is an existing application of
Management
various studies derived from existing literature.
Received : 21, June This scientific article uses qualitative as a
Revised : 18, July method, which is illustrated from scientific
Accepted: 22, August articles from journals, books, and other sources
that make literature sources in supporting this
©2023 Purwoko, Kamsariaty, Rubadi,
Saksana, Soehaditama: This is an article so as to provide a result. This scientific
open-access article distributed under article provides a result and recommendation,
the terms of the Creative Commons namely providing application or
Atribusi 4.0 Internasional.
implementation, especially the field of human
resource science involved from various
industries in scientific articles as the literature
used. It is very necessary that with the gap in
performance management that has not been
thoroughly discussed related to the existing Key
Performance Indicators, other researchers in the
future can continue the results of this scientific
article.

DOI: https://doi.org/10.55927/eajmr.v2i8.5282 3261

( ISSN-E: 2828-1517
https://journal.formosapublisher.org/index.php/eajmr
Purwoko, Kamsariaty, Rubadi, Saksana, Soehaditama

INTRODUCTION
The concept of Key Performance Indicators (KPIs) has gained traction in
business, organizations are realizing the need to measure and monitor their
performance to make informed decisions and improve. Organizations can
assess their progress in achieving their strategic and operational objectives
using the framework provided by Performance Indicators (De Jesus &; Buenas,
2023), Key Performance Indicators are an important tool used to measure the
performance and success of organizations in achieving their goals and
objectives. These indicators provide valuable insights into various aspects of an
organization's operations, allowing managers and stakeholders to monitor
progress and make informed decisions. The selection of performance indicator
criteria is a crucial step in measuring system performance (Vosoughi et al.,
2020).
It is important to choose KPIs that accurately reflect the desired results
and can effectively track changes over time (Rabbani, M, et.al, 2016). This
selection process can be challenging as there may be many operational
indicators to consider. The most important thing is to determine which specific
KPIs to choose from this set of performance indicators. To choose KPIs
effectively, several questions need to be addressed (Parmenter, 2015). One of
the performance indicators is quality applied (Heckl & Moormann,
2010)budgeting (Parmenter, 2015) and others. Metrics are factors used to
determine organizational performance using performance indicators (Heckl &
Moormann, 2010).
KPIs play an important role in realizing organizational goals ((Popova &
Sharpanskykh, 2010), Help organizations understand how well they are doing
in the relationship of strategic goals (Del-Río-Ortega et al., 2013) In particular,
(1) KPIs can provide reliable information to organizations to provide a basis for
implementing their growth strategies, (2) performance indicators provide a way
to see if the plan is strategic which pursued work and served as a tool to
encourage desired behaviors, and (3) their performance indicators, In
particular, their use can improve and increase operational efficiency and
productivity and profitability. Given these potential benefits, it is not at all
surprising, therefore, KPI considerations are very important and continue to
increase. The increasing interest in this topic proves that it is used in various
areas in the business environment, for example in public transportation
systems, (Mnif et al., 2015);(Mourtzis et al., 2016).
Thus, the selection of effective and relevant Key Performance Indicators
(KPIs) is becoming important and increasingly important in today's competitive
business environment (Popova & Sharpanskykh, 2010) Describing KPIs is a
tedious task because it involves various aspects such as business strategy,
business objectives, KPI modeling, measurement, analysis and reporting
(Letrache et al., 2016) Because of this, organizations typically rely on managers
and employees to select and monitor KPIs accordingly. The lack of common
terminology and organized structure of data elements can be an obstacle to
communication and understanding of information related to the resulting
research, making it difficult to analyze and compare works or even to find

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Vol. 2, No. 8, 2023: 3261-3268

mutually beneficial works, the relationship of such works (Vegas et al., 2009). In
this scientific article, the contribution to be made about Key Performance
Indicator (KPI) is an application that already exists from various studies
derived from existing literature.

THEORETICAL REVIEW
Key Performance Indicator (KPI)
According to (Velimirović et al., 2011) KPIs are measurable goals that
have greater meaning when implemented. A comparison. KPIs are useful
indicators for organizations that can be both monetary and nonmonetary. To
show how successful your company is. One of the requirements. After all, the
creation of a performance measurement system requires standard procedures
from the organization of previous processes of an effective and efficient system.
According to (Parmenter, 2015) Metrics used in key performance
indicators. Use financial or other resources to support the organization in
decision making. Evaluate progress against company goals.
According to (J.Peral, A.Mate, and M.Marco, 2017) KPIs are
Improvements at the strategic and operational level that provide an analytical
framework for decision making and increase knowledge and interest in many
areas, KPIs play an important role as they provide timely and accurate
information comparing current performance with the targets required to meet
business needs and objectives. As a result, KPIs can play an important role in
ensuring that business needs and objectives are met.

Performance Management
According to (Schwartz, 1999)) performance management is open
communication between managers and employees regarding goal setting and
feedback from managers to employees is a basic principle of leadership,
According to (Amstrong & Baron, 2004) performance management is managing
performance against goals, standards, and attribute requirements,
organizations, teams, and individuals can achieve better results.
According (Nursam, 2017) Performance Management is creating a
shared vision and an integrated strategic approach to drive the achievement of
organizational goals is the core of performance management, a leadership style
in performance-based resource management.
In assessing the work of company employees using key performance
indicator assessments, in general superior employees can be seen from high
scores and for employees who are not superior have low scores, employee
performance is a barometer for the company to progress quickly, in line with
research from (Susanto, Hidayat, et al., 2023);(Susanto, Sawitri, Ali, et al.,
2023);(Setyawati et al., 2022); (Sawitri et al., 2023); (Susanto, Sawitri, & Susita,
2023).

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Purwoko, Kamsariaty, Rubadi, Saksana, Soehaditama

METHODOLOGY
This scientific article uses qualitative as a method, which is illustrated
from scientific articles from journals, books, and other sources that make
literature sources in supporting this article so as to provide a result.

RESULTS
Key performance indicators are something that has existed for a long
time and is carried out by all management in all fields of science, it's just that, in
this article the results are an existing implementation of research results as
literature to be presented, a study from (Del-Río-Ortega et al., 2013) with the
results of using the PPINOT meta-model as the core of a software called
PPINOT Tool Suite and applying it to several scenarios. Studies from (Anand &
Grover, 2015) stated that the results are key performance metrics and classifies
them into four main categories: Traffic Optimization, Information Technology
Optimization, Warehouse Optimization and Resource Optimization. These
metrics have been compiled specifically for the retail sector. A theoretical
framework is proposed to link the performance of this construction with the
financial performance of the enterprise.
Subsequent studies from (Maté et al., 2016) with the results of the First
study, there is a general lack of adequate concepts that describe subtle but
important differences between performance and performance indicators.
Second, there is no integration between modeling techniques and data analysis,
thus linking analysis with the modeling process. To address these
shortcomings, we propose an approach that clearly selects KPIs and Key
Outcome Indicators (KRI). Our approach consists of (i) a new modeling
language that uses essential elements of indicators that include KPIs, KRI, and
measurements, (ii) analytical techniques based on data mining that provide
data information about model elements and thus make it possible. experts in
this field to validate selected KPIs and (iii) iterative processes that guide the
discovery and definition of indicators. To validate our approach, we applied
our proposal to a real water supply case study.
Studies from (Mourtzis et al., 2016)) with research results According to
the evaluation phase, specific appropriate KPIs are selected and suggested to
PSS designers using tools for context sensitivity analysis (CSA) from 170 KPIs,
which were identified after intensive literature research and systematically
divided into four categories. Main categories: Design, Manufacturing, Customer
and Environment. From the collected and classified KPIs, KPIs that support the
continuity of planned PSS offerings are grouped sequentially. In the lean design
support phase, lean rules are selected using CSA and proposed to designers in
all design phases to minimize unnecessary activity. Contextual awareness is
made possible by the availability of feedback gathered from manufacturers,
store experts, and different types of customers (customers of commercial
products or end products), as well as the stages of the PSS lifecycle covered by
the designer. Ontological data models for KPIs and lean rules are proposed to
support CSA.
Study from (Letrache et al., 2016) with the results of KPI modeling
solutions and code generation based on MDA approach. To do so, we provide
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Vol. 2, No. 8, 2023: 3261-3268

an OIM meta model extension to design KPIs and then generate MDX code. The
offer can be integrated into end-user applications to enable decision makers to
define and share their KPIs in real time. Subsequent studies of (Domínguez et
al., 2019) the results show Since most of the literature focuses on the definition
of KPIs, we will mainly focus on this aspect of KPI management. Our work
aims to bring significant benefits, such as improving understanding of KPI
management or helping users choose solutions that best fit brand needs.
Studies from (Joppen et al., 2019) a structural framework are presented
where KPIs are related to production changes with respect to Industry 4.0. We
summarize how today's typical KPIs reflect these changes and demonstrate the
benefits of other IT-related KPIs. Subsequent studies from (Al Dakheel et al.,
2020) with research results in their articles The need to develop quantitative
guidelines to increase energy and technological innovation became the basis for
improving building intelligence. Nine groups of representative performance
indicators for smart buildings were developed. This work shows current gaps
in the literature and shows room for future research.
Subsequent studies from (Vosoughi et al., 2020) with research results
showed that out of 45 basic health indicators and 17 education indicators, 12
and 9 indicators were acceptable and a total of 21 indicators were proposed for
research by the expert committee. The priority results show that the most
important indicator in the form of a ratio of health corrective and preventive
actions with a weight of 0.146 is prioritized. Based on the results and objectives
of the study, several key indicators have been proposed that can help managers
and industry hygiene professionals evaluate the performance of the automotive
industry.
The next study from (Abdelhadi et al., 2022) the results of regression
model research were applied to student enrollment data to predict accurate
KPIs that could be used and adjusted for each higher education system.
Prediction engines determine KPIs based on linear regression techniques such
as lasso, elastic networks and non-linear regression such as Support Vector
Regression (SVR) and K-Nearest Neighbor (KNN). The Palestinian Ministry of
Higher Education (MoHE) has provided data on the registration and
graduation dates of various colleges. The regression algorithm was evaluated
using mean absolute error, mean square error (MSE), root mean square error
(RMSE) and R-squared. Experiments show that the separation is 40% training
and 60.
The next study from (De Jesus & Buenas, 2023) where it is stated that the
system developed is indeed feasible and fully functional and meets the quality
standards of the Certified Software Quality Specialist program. As the
developed system meets user expectations and demands, it will be a powerful
tool for institutions, advisory units and communities to make better strategic
decisions and continue to provide quality services to the community.

DISCUSSION
The implementation of Key Performance Indicators in supporting
performance management with various existing fields from various sciences

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Purwoko, Kamsariaty, Rubadi, Saksana, Soehaditama

already exists in research, it's just that this scientific article pays special attention
to the field of human resources in management that is assessed in the company.
Some of the articles above represent the answers of researchers with this study
seeing that performance management in particular has not been related to the
existing article literature.
So that makes a gap that will later be for other researchers to make further
research. The existing key performance indicators have been implemented.

CONCLUSIONS AND RECOMMENDATIONS

The results of the research and discussion above are concluded by
following the contribution of the results of this scientific article, namely
providing application or implementation, especially the field of human
resource science involved from various industries in scientific articles as the
literature used.
It is very necessary that with the gap in performance management that has
not been thoroughly discussed related to the existing Key Performance
Indicators, other researchers in the future can continue the results of this
scientific article.

FURTHER STUDY
The results of this article can make a real contribution to the company,
and management in various industries, although it is still not perfect for
researchers who are in producing this article.

ACKNOWLEDGMENT
Our pride to contribute to our institution that has continued to provide
assistance, and the enthusiasm for us researchers in collaborating and
completing this article hopefully can provide benefits for science and
knowledge, especially for our institutions.

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