Process KPI. Regulation on KPI

Kipiai, or key performance indicators, is a unique system that has recently come to Russian business. To date, there is no more reliable method by which to evaluate the efficiency of the enterprise, so the use of this system is practiced not only in Russia, but throughout the world.

The concept of KPI

To begin with, let's fully reveal the question of what it is - KPI, or key performance indicators.

Ki Pi Eye is a unique system with which you can calculate the performance of each individual employee of the organization. Thanks to such a system, one can not only understand how effective the activities of employees are, but also motivate them to improve their working skills. The most optimal performance indicators for everyone individual worker must not exceed 5.

To understand how to operate this system correctly, it is necessary to more carefully and deeply study the types of performance indicators, as well as consider examples of KPIs.

Varieties and groups of KPI

Kipiai indicators are usually divided into several subgroups, based on the results obtained in the calculation of the results of a certain area of ​​activity.

1. Financial expenses.
2. The performance of the company, implying the calculation of kpi as a percentage. This percentage shows how high the capacity utilization of an enterprise is.
3. The productivity of the firm. This subgroup of indicators KPI performance is based on a comparison of certain data (for example, cost items and revenue for a certain period of time).
4. Final calculations, which are based on the quantitative expression of the results related to the activities of the company's employees.

A key performance indicator is built on several principles. If you do not take them into account, then the data obtained will be unreliable. These are the principles:

1. All indicators must be measured in quantitative terms.
2. The data obtained should be directly related to the activities of the company.
3. Results should not be costly, both in terms of time and resources.

Earlier, we considered the question of what is KPI, dividing it into 3 small subgroups. However, the gradation does not end there, because this system also has its own varieties. There are two of them in total. These are operational and strategic KPIs. Let's first understand what kind of operational KPI system it is.

Operational KPIs are indicators that can be used to evaluate the effectiveness of a company's activities on this moment. Simply put, the data obtained when calculating kpi reflects how well the company's employees work in the current period of time.

In addition, kipiai operational systems help to compare the tasks performed by employees with the conditions that were created for this. Based on the results obtained, the management of the enterprise can evaluate the quality of the manufactured product, the conditions for its delivery and further distribution.

What is a strategic KPI? Such indicators reflect the performance of the company for a certain period of time. With their help, you can find shortcomings in the work of personnel and adjust its activities for the next period of time (for example, for the next month, quarter, six months, etc.).

In addition to the quality of work of employees, financial data can also be processed. Based on the calculation results, KPIs are characterized cash flows, which help to understand how profitable the organization itself is, and how much the products produced by it are in demand.

Scopes of KPI and its calculation

Since with what is kpi, or, speaking in simple terms, key performance indicators, we figured out, it is necessary to move on to the next, no less important, question: where and why are they used? And also consider the formula by which they are calculated.

A performance indicator is a numerical measurement of the set (and achieved) goals and objectives that play important role for successful business promotion. Thanks to the prepared report, where all the necessary indicators are taken as a basis (they were discussed above), the management of the organization has the opportunity to fully assess how the developed plan was carried out, as well as what was achieved over a certain period.

KPIs are used in various business areas. Each of them has its own list of indicators that are being processed, and on the basis of which an indicator is calculated that reflects the efficiency of the enterprise.

Sales area

To multiply your fortune, you need to understand what KPIs are in sales and what an important role they play. These indicators can be calculated based on:

• received for a certain period of financial profit;
• proceeds from sales carried out by the firm;
• the cost of manufactured goods;
• the percentage of low-quality goods;
• amounts of current assets;
• the total value of all the company's inventory.

KPI indicators in retail are based on 5 main principles:

• percentage of sales for 1 hour or day of the outlet;
• the average amount of money paid by the buyer for the goods (this amount is calculated at the expense of punched checks);
• the number of products sold for 1 time;
• the ratio of employees' salaries to the proceeds from the sale of goods;
• sales conversions.

Thus, having received all the necessary calculations, you can quickly adjust the work of the staff, significantly increasing the number of transactions, which, in turn, helps to increase the store's income.

Manufacturing industry

What is a key indicator in production, and on what basis is it calculated? First of all, when calculating the efficiency coefficient, they take as a basis:

• indicators of the average daily consumption of raw materials from which products are made;
• volumes of raw materials used and remaining in stock;
• volumes of work in progress;
• work efficiency of employees;
• various production costs;
• equipment repair costs;
• conditions, terms and cost of storage of finished products.

To get the right data, you need to know how to calculate KPIs. There is a special formula for this:

(qph/ qpl)×100%

Now let's decipher the indicators:

• qf - the actual volume of all sales carried out by the company;
• qpl - sales volume, which is only planned to be carried out.

The data obtained through this form is the so-called performance criterion.

Examples of KPIs

To fully understand what kipiai is, let's look at some examples of key performance indicators. For a better understanding of the essence, each of the professions that are taken into account in the calculation will be considered separately. The table below shows not only the type of activity, but also the indicator on the basis of which the efficiency criterion is calculated.

Number	Job title	Indicator for calculation	Formula for calculation
1	Head of Marketing Department	The total percentage of the previously developed plan.	The general calculation formula described above.
2	Marketer	Overall percentage of all brands on the market	Calculated based on data from all third-party marketing firms.
3	chief accountant	Timeliness of submission to the tax service of the declaration on the income of the enterprise.	Data obtained from the tax authority.
4	Accountant	Total percentage of completed financial transactions	This profession has its own formula for calculating kipiai: (qpsr/qtot) × 100%, where the first indicator in brackets means the number of financial transactions that were completed on time, and the second - the overall results regarding all payment transactions.
5	Boss legal department	The total number of lawsuits won is taken as a basis.	The ratio of the number of cases won to the total number of trials. The result is multiplied by 100%.
6	Lawyer	The amount of money that was collected from other enterprises in favor of the organization where the person works. The amount of money that was saved by the company is also taken into account.	All data from reports prepared by the legal department are taken into account.

If we again take the example of a sales manager's kpi as a basis, then with the help of the data obtained after the calculation, the head of the management department will be able to identify not only positive, but also negative aspects in the activities of his subordinates. So, he will know exactly how many calls and meetings the sales manager made, whether they were effective, how many people became regular customers, etc.

If the data obtained do not correspond to the developed plan, then this means that the person involved in this type of activity lacks either knowledge and skills, or perseverance and desire to work.

All the above examples of KPIs, or key performance indicators, fully reflect the essence of this concept. Of course, it is difficult to immediately understand all these subtleties (especially for a novice businessman). However, it is better to spend a little time studying this important topic in depth than to incur financial losses that can seriously harm the development and successful promotion of a business.

How, after all, to develop a really working KPI system in company? There are many techniques, there are separate examples, but to find a development algorithm real system KPI is practically impossible. I hope the reader will be interested in the proposed algorithm for developing a KPI system from scratch (when there is nothing yet), ending with the final result - a working system. About this in this article.

"God is not on the side of the big battalions, but on the side of the best shooters."

Voltaire

In this article I will try to give an algorithm for creating a KPI system in the company as a whole. On the example of a design company (IT company) implementing large and technically complex projects.

KPIs - Key Performance Indicators- key performance indicators of the unit, company or enterprise. The Russian abbreviation uses the abbreviation "KPI".

I'll start with the main one. The questions that usually come up are:

1. Where can I get these same KPIs, and what should they be? Will these KPIs be achievable, and how to determine this?
2. Which KPIs are important and which are not?
3. How to use KPIs to link the key areas of the company's activities, so that KPIs for marketing do not contradict KPIs for sales?
4. What project implementation methodology should be used? Let's say we chose the Balanced Scorecard (BSC) methodology - Balanced Scorecard. What should be done next?
5. How to start such a project, and how should it end? Etc.

Lots of questions. Answers, as usual, many times less.

If the company has a business development strategy, strategic goals are the basis for strategic KPIs, which are easy to decompose into separate divisions of the company. In this article, we will not consider this case.

Consider the algorithm for creating a KPI system when there is no business development strategy in the company. Step by step.

Step 1. We choose the methodology for implementing the project to create a KPI system. For example, the Balanced Scorecard (BSC) methodology. I wrote about this in the article "How to develop a" Manager's Wheel "", but I repeat. These are the classic 4 "walls". See Fig.1. The gist in short:

A. Finance. Finance in the company is provided, after all, by sales of goods and services.

b. Sales. In order for everything to be normal with sales, technologies / products are needed - those that are in demand by the market and those that can be offered (sold) to the market.

C. Technologies/Products. In order for everything to be normal with technologies / products, specialists are needed - people who create them.

D. People. In order for people (able to do this) to create competitive products, they need to be paid, they need to be trained and developed, and so on. Then they will create products, products will be sold, and the company will have everything in order with finances. Then the company will be able to invest in people again and again to create new technologies / products. Technical specialists ( production personnel) implement projects for which customers, in fact, pay money.

Rice. 1. Very simplified essence of the Balanced Scorecard (BSC) methodology - balanced system indicators.

Step 2. We form the structure of the main areas of the company's activities. For example, for a project company, this is:

"Wall" A

A set of more complex macro parameters. Somehow: liquidity indicators, capital structure, business profitability, business activity and others will not be considered in this article.

"Wall" B

2. Sales.

3. Marketing.

"Wall" C

4. Key areas of development(their condition). Let's say this is the modernization and expansion of the product line.

5. Presale.

"Wall" D

6. Production(implementation of projects).

7. HR(personnel Management).

Comment: it is worth noting that many companies add their own “walls” (5th, 6th) to the classic 4th “walls”, which are the most important in the company's activities. For example, the logistics block.

Step 3. Determine the areas that we want to strengthen. Or areas in which we have clear “points of failure”. "Points of failure" are not complete failures in business. This is something that doesn't work, or doesn't work very well. The task is clear - to eliminate the "points of failure". There are such “points of failure” in every company.

Task example. Suppose, in general, everything is more or less normal with us, except for the fact that Industry Segment 1 ceased to be profitable, but we see that it is promising Industry segment 2(or a new promising niche) with which you urgently need to start working.

An example of an action plan.

1. Prepare/adjust the product line for the new Industry Segment 2 (new industry for short - “NO”). This is the "wall"

2. Find a professional sales director for "BUT". This is the "wall" of B and D, since it is a task for the company's sales director and for HR.

a. Develop a customer profile "NO". This is the "wall" B.

b. Develop a profile for the NO director. This is the "wall" B.

c. To develop the main parameters of the motivation of the director of "NO". This is the "wall" B.

d. Develop a motivation sheet for the director of "NO" and agree on it. This is the “wall” D.

e. Carry out a search/hunting for the director of "NO". This is the “wall” D.

3. Form a new sectoral department - for short - "NOD" - (budget, responsibility centers, staffing etc.). This is the "wall" B.

a. Assign tasks to the director of "NOD". This is wall "B".

b. Develop the main parameters of the motivation of sellers of "NOD". This is the "wall" B.

c. Develop motivational lists for NOD sellers and coordinate them. This is wall "D".

d. Search/hunt sellers in "NOD".

e. Transfer part of the sellers, hire part of the "NOD", part, perhaps, dismiss. This is the "wall" of B and D.

4. Set presale tasks to promote the company's solutions in "NO". This is the “wall” D.

5. Set tasks for marketing to promote the company's solutions in the "BUT". This is the "wall" B.

An example of a goal tree and KPIs.

"Wall" C

KPI (Technical Director):

• Prepare/correct product line for NO.
• Set presale tasks to promote the company's solutions in NO.

"Wall" B

KPI (Company Sales Director):

• Develop a customer profile "NO".
• Develop a profile for the NO director.
• To develop the main parameters of the motivation of the director of "NO".
• Form a "GCD" (budget, responsibility centers, staffing, etc.).
• Assign tasks to the director of the "NOD" (after HR finds the director).
• Set tasks for marketing to promote the company's solutions in BUT.

KPI (Director of "NOD"):

• Develop the main parameters of the motivation of sellers of "NOD". Coordinate them with the company's sales director and transfer them to HR.
• Look at sellers (existing and new), make decisions.

"Wall" D

KPI (HR directors):

• Develop a motivation sheet for the director of "NO" and agree it with the Sales Director of the company.
• Search/hunt director "NO" (find a professional sales director).
• Develop motivational lists for NOD sellers and coordinate them with the director of NOD.
• Search/hunt sellers in "NOD".
• Transfer part of the sellers, hire part of the "NOD", part, perhaps, dismiss.

Comment: it is clear that there are tasks for "wall" A - to plan new expenses in the company's budget, etc.

So, we have formed a tree of goals and set goals and objectives that will ensure the creation of a new branch department (SOD).

1. The department will have to be headed by a professional sales director in this industry.

2. We have planned all the necessary actions related to closing or downsizing Industry direction 1 if it can't be closed yet.

3. The technical department, marketing, HR and presales have been assigned the appropriate tasks, which must do their part of the work according to their profile and support the new direction “on all fronts”.

Dear reader, for sure, will think: “Easy to say: to hire a professional sales director for a new industry segment!”. Difficult! How did the author do? I formed several lists for HR.

1. List number 1. Large and medium-sized companies where it makes sense to look for a director or deputy director of a similar direction. It doesn't work, then:

2. List number 2. Smaller companies where it makes sense to look for a director. A person will be a little out of step, but he will be inside a more rebuilt company. And for him it will career. It doesn't work, then:

3. List number 1. Look for a strong seller in large and medium-sized companies, not a manager. Also for growth. It doesn't work, then:

4. List number 1. Look for a director who is close in terms of industry, taking into account his ability to master a new industry.

5. Etc. There were other options as well.

By the way, the HR service, having received such lists, could quickly figure out where and whom to look for. As a result, candidates usually found.

"For a man who does not know which harbor he is heading for, no wind will be favorable."

Lucius Annaeus Seneca the Younger

KPI details can be generated using, for example, the well-known S.M.A.R.T. goal setting methodology. That's why,

Step 4. Study the goal setting methodology to be used in goal setting.

For example, the goal setting methodology S.M.A.R.T.

Move on. We have identified areas that we want to strengthen. Or areas in which we definitely have “failure points”. What's next? Next, we develop an action plan (see example above) that will allow us to strengthen these areas and/or eliminate “points of failure”. Without a holistic action plan, it is not realistic to build a KPI system that will unite the work of various company services. Anyway, it's pretty difficult.

Step 5. Develop an action plan.

In Step 3, I showed an example of an action plan, not the most trivial, but which is quite possible to implement, and such action plans are quite often implemented by companies. What's important? - a meaningful approach to problem solving!

Step 6. Check the action plan for feasibility.

Experience shows that most often, it is immediately clear which points of the plan are precisely feasible. The main thing - you need to carefully look at those points that are clearly in doubt. And either, think a little (for example, arrange a “brainstorming”), or involve experts, or, perhaps, go another, simpler, way. But, one should not set clearly impracticable (unattainable) goals and objectives!

Step 7. Building a tree of goals (and tasks).

So, there is a plan of action. There are goals and objectives. It remains to build a tree of goals (and tasks) and appoint those responsible. If new Responsibility Centers appeared - well, these functions did not exist before - then it is necessary to modify according to the new Responsibility Centers organizational structure companies. So, in general, companies grow.

Step 8. Formation of a list of KPIs with the appointment of responsible employees for specific KPIs.

An example of a tree of goals and the formation of a list of KPIs based on an action plan is shown in the example above.

Step 9. Formation of motivational sheets.

That is, until similar (given above) qualitative goals appear in the motivational sheets (and in the example above there is not a single financial goal!), the KPI system will not work! It will remain on paper. What is shown in the example above is what needs to be done urgently! Exactly in order not to "accumulate" a bunch of extra costs, and even worse - losses, and exactly in order to ensure as quickly as possible further growth companies. Of course, financial!

“It is impossible to solve the problem at the same level at which it arose.

You need to rise above this problem by rising to the next level.”

Albert Einstein

How to implement such a project?

I often hear "tried - it doesn't work!". There are quite a few reasons why such projects do not reach the stage of operation and the final result.

We often forget that man is not a machine. Therefore, based on my own experience, I would recommend the following:

1. Start with small pilot projects, limited by the scope of the company and the range of tasks. The goal is simple - to quickly develop a skill. It is not necessary to put developments into action immediately. You can simulate the situation (see item 3).

It is far from always effective to launch a large and complex project.

Example. Motivation systems in large companies, as a rule, are honed 2-3 years. In one of the companies in which I worked, we came to a balanced new motivation system only after 3 years. At the same time, a fairly good and correct system of motivation was developed already in the first year. In the second year we had to make it more aggressive. In the third year, the motivation system was already balanced, including by the market, and tested in practice for 2 years. Of course, subsequently the motivation system was adjusted every year.

2. Small pilot projects are best done in the simplest and most understandable means (for example, in Word or Excel). To start. The main thing is that this is the substantive part of such projects, “put on paper”. When implementing a very small task, the mistakes made (and they will be!) Can be quickly corrected.

3. Spend full cycle modeling - from solving some small problem, to the formation of KPI with the conditional "appointment" of those responsible and the formation of conditional motivational sheets.

Example. Suppose the company does not have motivational sheets (yet), there is no KPI system (yet), and the company has not implemented this project before. How to simulate a situation? Run steps 1-3. Do not assign KPIs (!), and “do not hand over” motivational sheets (!). Just entrust the responsible manager with what is written for him. And then compare what was planned and what really happened.

It is extremely important to try to avoid "classic" mistakes. To do this, do the following:

1. Be sure to form ultimate goals project to create a KPI system. The goal - "to set KPI" - is "understandable". But this is the same as “increasing the efficiency of the business”, “ensuring the further growth of the company”, etc.

I will give an example of a range of practical goals for creating a KPI system:

a. Goal 1.1: Competency testing of managers and key employees in order to identify “points of failure” (incompetent employees) and promising employees (able to grow). Still, key performance indicators should show (and show!) Efficiency and inefficiency.

b. Goal 1.2: checking the effectiveness of the company's business areas (sales, production, presale, marketing, etc.) with the same goal.

c. Goal 1.3: Checking the effectiveness of business processes and communications in the company. Most of the major goals and objectives are implemented by various departments. The growth of the company depends on the coherence of their work. No more and no less! This is the very efficiency that we often talk about.

2. The action plan must be checked for feasibility. So that it does not have unattainable goals (and tasks).

3. Be sure to appoint responsible for specific KPIs. At least simulate it (for starters). So that it does not turn out that no one is really responsible for specific KPIs.

"What is everyone's business is nobody's business» .

Isaac Walton

4. The project to create a KPI system must be completed with motivational sheets. So that the formed KPIs do not turn out to be “outlaws”. If this - pilot project, let it be several KPIs for a period of 2-3-4 months. This is also correct.

A practical example based on the Balanced Scorecard (BSC) methodology.

I will give an example based on the above, taking into account the mentioned methodology and in the form of a sequence practical action. Let's say you start at the top "Finance" and you are concerned about the "marginality" indicator. It is clear that there are a lot of ways to increase the marginality of projects, so it makes no sense to list all these methods. You need to choose the methods inherent in your company, as well as identify the reasons for insufficient margins.

So, a very conditional plan - just for example.

1.KPI-1. Increase the marginality of projects by at least 7% over a period of time not exceeding 6 months.

Suppose the key reasons for insufficient marginality of projects are the following (conditionally):

• High project costs due to failure to complete projects on time.
• Most projects by themselves do not have sufficient marginality. Further - we often “fly out” of the deadlines and budget, and the marginality becomes even less.
• No choice over profitable projects from a portfolio of projects. There are so few projects, and there is almost no portfolio of potential projects.
• The high cost of purchasing equipment for projects, which does not add marginality.
• There are no unique (almost unique or high-quality) services due to which the company can "charge" extra money for projects.
• Etc.

From here, KPIs of the next level “grow” for a number of company services. Namely (again - conditionally):

2. KPI-1-1(for the Technical Directorate and Project Managers (RP)): the implementation of projects on time and within the budget of the project. The KPI for the project was fulfilled - the RP received a bonus. No - you need to figure out why, and, possibly, change the RP.

3. KPI-1-2(for the Marketing Block): identify industries, segments, and niches that are more solvent than those that the company currently operates in. Prepare a presentation and justify your proposals. During<такого-то срока>.

4. KPI-1-3(for the Sales Block): to form a portfolio of projects with a volume of at least<такого-то>, for at least<такого-то срока>(in close interaction with marketing, so as not to waste time). To be able to select projects for implementation.

5. KPI-1-4(for the Procurement Block) not yet. Initially, you can set the task - to work out and give suggestions on how to reduce the cost of purchased equipment for projects.

The KPI indicator (Key Performance Indicator) came to us together with American and Western European companies, where it has been successfully used for several decades. KPI is a tool that helps to analyze the effectiveness of certain activities, as well as the level of achievement of goals.

Studies show that about 80% of Russian top managers are dissatisfied with the performance assessment systems that exist in their companies. Using existing algorithms, they don't see links between plans, execution, results and motivation. Implementing KPIs helps to completely change the picture. KPIs allow you to monitor the business activity of employees, departments and the company as a whole and take the enterprise to a new level.

In Russia, KPI is usually translated as a key performance indicator. Actually, this is not entirely true. It would be more correct to call it "key performance indicator", since the English word performance includes not only the concept of efficiency, but also the concept of effectiveness. Despite the apparent similarity of these terms, they have a significant difference:

• Efficiency expresses the ratio between the results achieved and the resources expended and determines the company's ability to implement its goals and plans with a given quality level, expressed by certain requirements: time, costs, degree of achievement of the goal.
• Efficiency is the ability of an enterprise focus on results(degree of achievement of planned results).

Thus, KPI in the meaning of “key performance indicator” is more voluminous and contains both the degree of achievement of the result and the costs of obtaining it.

You can use performance indicators in various areas of activity, for example, if you want, you can apply metrics such as the number of customers and the average check amount.
The same indicators are suitable for evaluating the activities of a hairdresser. You can read more about opening a barbershop.

Why do you need KPI

As for the practical application of KPI, this indicator is introduced at enterprises in order to make it convenient to measure the results of the work of the company as a whole, individual departments and employees directly, as well as to motivate staff to achieve the required results.

Using these indicators, you can create, if not perfect, then very effective motivation and incentive system company employees.

Of course, their use makes sense mainly for those employees whose work most affects the financial and economic performance of the enterprise. In insurance companies, these are primarily agents, in trading firms- sales managers, and in recruiting offices - recruitment consultants. KPIs are also used to determine the performance of administrative and managerial personnel.

Key performance indicators can be divided into:

• lagging- reflect the results of activities at the end of the period. These include financial indicators, which show the potential, but do not convey the current efficiency of departments and the company as a whole;
• operational (leading)- make it possible to manage the situation within the reporting period in order to achieve the desired results after its expiration. They talk about the current situation in the company, at the same time showing what cash flows can be in the future, and also demonstrate the quality of processes and products and the degree of customer satisfaction.

By type, key indicators can be as follows:

1. KPI result- show the quantity and quality of the result.
2. Cost KPIs- show spent resources.
3. KPI of functioning- relate to performance indicators of business processes and allow you to assess how the process corresponds to the required algorithm for its implementation.
4. Performance KPIs- derived indicators characterizing the ratio of the result obtained and the time spent to obtain it.
5. Efficiency KPIs(performance indicators) are also derived indicators that characterize the ratio of the result obtained to the cost of resources.

Key indicators are needed not only by the company's management - it is also more convenient for the employees themselves to work on them, especially for those whose income directly depends on the results of their work. KPI makes it easy for employees to calculate the steps needed to achieve the desired result.

For example, in the field of insurance, especially in European and American companies, where such a system has long justified itself and is used everywhere, KPIs allow you to increase the number of sales due to transparency and a clear understanding of the necessary actions. that the employee must take.

KPIs can be used in any business related to sales. For example, when selling flowers. Read on and start your own flower business.

The KPI system can be used to motivate salespeople in a clothing store using performance metrics such as the number of sales. Read about how to open a clothing store from scratch and how much it costs.

Performance appraisal also finds application in the service sector. Follow this link to find information about opening a real estate agency and learn how to start a real estate business.

Examples of using KPI in business

In direct sales companies, KPIs are mainly used, which show the ratio of cold calls, meetings with clients to the number of sales.

An insurance consultant (or sales manager), using the key indicators adopted in the company, sees a clear picture of his activity. He understands that in order to reach the planned income, he needs to sell a certain number of policies (goods), having made a certain number of meetings and calls before that. The standard KPI for life insurance newbies is considered to be 1/10, that is, to make one sale, you need to hold 10 meetings, and each meeting has an average of 10 calls.

As an example of key indicators for a sales manager, one can also cite such options: “the number of new customers is not less than ...”, “sales volume is not less than ...”, “the size of the average contract per client is within ...”, and so on. This is another type of indicators - KPI result.

Such KPIs are personal, and there should not be too many of them for each employee. Three to five is enough; the main thing is that they are clearly articulated and easily measurable. An example for a sales division or company as a whole would be the average revenue per customer KPI included in strategic goal"To increase the average income per client from 25 rubles to 30 rubles in 2014."

In addition to stimulating and motivating employees, KPIs are used by the manager as a tool for analyzing the activities of subordinates, helping to clearly see at what stage of work his employee fails.

Taking the sales manager again as an example, key metrics allow the head of sales to identify problem areas: does the manager make enough calls and meetings, does he have a large customer base, etc. If the indicators are met, but the required number of sales no - it means that the quality of work suffers for this employee: there are not enough skills, knowledge, perseverance, etc.

All these moments easily tracked by KPI, so all the activities of the selling divisions in successful companies involved in active sales, is mainly based on the use of this indicator.

The types of indicators and their quantitative values ​​depend both on the direction of the enterprise and on its strategy, therefore, in different companies they can take on different values.

Today, many companies are trying to get their employees to work according to the KPI system ( Key Performance Indicators- key performance indicators). What are the monetary pros and cons of KPIs?

The goal is one, the tasks are different

KPI is a scorecard by which employers evaluate their employees. It has much in common with the usual planned approach. With one major difference: the performance of each individual employee is tied to the overall KPI of the entire company (such as profit, profitability or capitalization). The purpose of the system is to make sure that the actions of employees from different departments are not contradictory and do not slow down the work of specialists from other departments. Everyone contributes to the common cause, works to achieve their goals and as a result receives bonuses for their implementation.

KPI work allows specialists to better understand what they need to do in order to be effective. By "efficiency" is meant not only the amount of work done per unit of time, but also the benefits received by the company from the activities of the employee.

In each department, the company's general KPIs are "split" into smaller ones - personal ones. There should not be many key indicators for each. Three to five well-defined KPIs are enough. The main thing is that each of them can be easily measured. An example of the indicators of one of the sales managers: "sales volume is not less than ...", "the number of new customers is not less than ...", "the size of the average contract for a client is within ...", "the level of knowledge of English is not lower than .. .".

Measure of result

In large Western companies, where everything is spelled out and detailed to the maximum, work on the KPI system is a good option for staff. The specialist understands how much, for what and when he will receive in excess of the salary. And what is included in his salary. Clear, documented information about what the employer expects from you makes the job very easy. Each employee has personal tasks and deadlines for their implementation, and the company regularly monitors his work with the help of evaluation.

In many companies, in addition to monthly monitoring, the results of all KPIs are taken as the basis for an annual assessment of staff performance. After the annual assessment, the HR Directorate draws up lists of the most promising specialists for enrollment in the company's personnel reserve and promotion.

But if the “head office” helps foreigners in developing goals, then domestic employers, in order to determine the goals and objectives of their specialists, act in different ways. Some invite consultants, others manage on their own: the goals are prescribed by the personnel directorate. Since neither the first nor the second features of the work of each particular specialist are known, it happens that the indicators are formulated inaccurately.

“At the exit”, the employee is faced with the fact that his KPIs turn out to be impossible. Or, on the contrary, such a system allows the specialist to find legitimate “loopholes” so as not to strain especially. IT director of an industrial holding, Alexander, recalls that before implementation of KPI his subordinate "system administrators" solved the problems of users "on the first call." Now, when calls like “Help! Computer froze!" they react "bourgeois". They demand that they write a request with the essence of the problem and pass it on to the senior “sysadmin”. Then it is queued for execution. “Yes, I could do it in three minutes, but it will not be recorded anywhere. What do I care about the difficulties of other employees and departments? I will be evaluated according to KPI, the achievement of which I am motivated.”

Plus bonus

The described system is good for employees whose work results most affect the financial and economic performance of the enterprise. In trading companies, these are, first of all, top managers and sales managers, in recruiting offices - recruitment consultants.

Communications manager Elena says that in her company, the achievement of goals by an employee also affects the individual size of the annual review. wages: the higher the score, the higher the percentage of salary growth. “The managers' annual bonus consists of two variables, which depend on the results of meeting individual goals and on the achievement of company performance indicators. This approach encourages better performance of functional duties.

For employees from different departments, the size of the bonus, which is affected by KPI, can range from 20% to 100% of salary.

At the same time, the formula for accruing the bonus itself is quite complicated: it takes into account the number of KPIs, the coefficient of completion of each of them, as well as its “weight”, that is, the coefficient of influence (the more important the indicator for the company, the higher the “weight”).

If the KPI scale is compiled incorrectly, there will be little result from it. For example, if there are too many KPIs, the impact of each on the amount of the total bonus will be small. Economist Lyudmila says that at first she had about 20 KPIs, but a year later they were reduced to five. “Most of the indicators accounted for a small share of the bonus, and for me the loss of 5% in the bonus was not of particular importance. A 20% KPI weight motivates much more effectively,” she admits.

System Disadvantages

One of the main disadvantages of KPI is that if a department performs poorly, all of its employees can lose salaries at once. After all, personal KPIs are associated with key indicators of the entire department. With a systematic failure planned indicators an employee may be demoted. Therefore, KPI forces you to always be in shape. Who does not withstand this rhythm, he leaves himself.

The disadvantages of working in the system of key indicators include the fact that not all employees can directly influence the company's strategic KPIs. If the bonus depends on net profit and sales, it is unlikely that sitting in the office, a secretary or an economist will be able to influence him.

Very often, in Ukrainian companies, the KPI motivation system is “one-sided”: everything that an employee overfulfills is just a job well done, for which he receives a salary, and for underfulfillment he is deprived of some part of his salary. Or another option: a system of key indicators is being introduced, but there is no link to the employee motivation program.

The work of technical specialists (accountants, engineers, programmers) is easier to describe job description. And it is very difficult to find a fair “line” for them.

And further. Keep in mind that planning and KPI calculations take time. Director of logistics Department transport company Roman is dissatisfied with the fact that the introduction of this system turned out to be additional hours of work for him. “Now, at the end of each month, I have to spend time setting and calculating KPIs for all my subordinates. All indicators have to be coordinated with the HR Directorate. At the same time, they don’t pay me extra for calculating the size of bonuses,” he complains.

The transition to a KPI system is usually accompanied by unrest among employees: some innovations are “quietly sabotaged”, others do not completely accept it and leave the company. It is difficult to immediately change your habits, the order in which functions are performed, and get used to the new conditions of remuneration.

Andrey, a former regional manager of a confectionery company, recalls that when he was given the goal of “selling not a lot of cheap sweets, but a lot of expensive ones,” he had to change a lot in his work. Misunderstanding of innovation by the team and partners interfered. While he was retraining his subordinates, some of the people left. And when he negotiated with trading networks, based on the new goals of the company, he was forced to agree to more stringent conditions.

It is easier for new employees than for old-timers. If the HR manager explains to the newcomer in an accessible way what bonuses are paid for in the company, he will most likely perceive the work according to this system normally.

Pros and cons of working in a KPI system

• The amount of an employee's bonus directly depends on the fulfillment of his personal KPI
• Each is responsible for a particular area of ​​work.
• The employee sees his contribution to the achievement common purpose companies

From this article you will learn:

• What is KPI
• What examples of KPIs for representatives of various specialties can be adopted
• How to calculate KPI in EXCEL using an example

The method of personnel assessment using key performance indicators KPI (Key Performance Indicator) is based on the methodology of "management by objectives" by Peter Drucker. It has been used in Russia since the early 2000s. In this article, we will describe the essence of KPI, give examples of KPI and show the prospects for applying and improving the KPI method in Russian enterprises.

What is KPI with examples

From July 1, 2016, Russian enterprises are introducing professional standards as the basis for the formation personnel policy. To assess the success of the implementation of standards, a system for assessing the quality of work of employees is needed.

The criteria that characterize the quality of labor are presented in Figure 1.

Picture 1. The structure of criteria for the quality of work of employees of the enterprise.

Level I criteria are actually the names of the two main classes of criteria.

Level II criteria- generalizations suitable for presentation to the award (but not for evaluation).

Level III criteria- unified indicators that allow you to perform an approximate assessment of the effectiveness and reliability of the employee's work. Almost all known methods of personnel assessment are focused on the assessment of criteria of the III level. Depending on the education and literacy of the authors of the methods and consumers, the following are most often chosen:

• Purely economic KPI criteria. Applicable to managers and professionals directly related to financial management and product sales.
• Questionnaires in the form of forms for experts to assess competencies.
• Psychological criteria (Kettell test, etc.) - on the assumption that the quality of work is determined mainly by personal characteristics.
• Position profiles based on specialized (mainly psychological) sets of indicators.

Consider the most popular KPI-based assessment technology.

The main idea of ​​KPI- detailing the strategic goals of the enterprise to the level of an employee. As a rule, financial and economic indicators act as strategic goals. There are several subgroups of KPIs based on quantitative measures of activity:

1. Expenses- in value terms.
2. Performance- percentage of equipment loading.
3. Efficiency. Most often it is the ratio of revenue to cost.
4. Results. For example, the number of products produced.

Key performance indicators can be operational and strategic.

• Operational indicators characterize the current results of the enterprise and its divisions. Allows for real-time monitoring technological processes, material support, product quality and adjust management parameters in accordance with changing conditions.
• Strategic Indicators allow you to monitor the generalized results of the enterprise's work for the month, quarter, half year and make decisions to ensure that these results comply with the planned ones. Short-term forecasts of efficiency of activity of divisions, profitability for the forthcoming period are calculated.

KPI are numerical indicators of the degree of success in achieving specific goals. This allows you to use the KPI system as the basis for motivating management of employees' activities.

Examples of KPIs for representatives of various specialties

KPIs are most convenient for assessing the effectiveness of the work of administrative and managerial personnel (managers, economists, financiers, etc.).

Key Performance Indicators trading activities calculated based on the data:

Key production performance indicators are calculated based on:

Specific examples are presented in the following table:

Job title	Index	Estimated value, %
Head of marketing department	Sales plan completion percentage	100, where Q f is the actual sales volume, Q pl is the planned sales volume
Marketer	Market share	Data from external marketing agencies
Chief Accountant	Timeliness of tax filing	FTS information
Accountant	Timeliness of payments (as a percentage of the total)	100, where Op cp - the number of payment transactions performed on time; Op total - the total number of payment transactions
Head of Legal Department	Percentage of cases won (of the total number of cases)	100, where Q in - the number of cases won, Q total - the total number of cases
Lawyer	The amount of money that is collected and kept for the company	Legal department data (as a percentage of the plan)

An example of calculating KPI in EXCEL

Each company has its own KPI assessment system. Key performance indicators are set for each position independently. Their total number for a particular position/job is no more than five. At the end of each month (for some enterprises - a quarter), the final individual KPIs of each employee are calculated as a weighted average of private KPIs. The simplest algorithm for combining private indicators of a separate workplace:

where are particular performance indicators;

n – number of private indicators ( n≤5) ;

– weights of individual (private) KPIs. Usually

The weights differ because the significance (importance) of individual indicators may not be comparable. Weights are normalized:

Value-Based Premium Formulas K(decision rules) can be expressed as a simple linear or step function To.

The values ​​of motivational coefficients (that is, the conversion coefficients of the value K to the premium) can be determined, for example, according to the following algorithm:

The following figure shows an illustrative example of calculations using Excel.

Figure 2. An example of assessing the success of an activity.

Explanations:

• Salary- a fixed part of the salary. It is proportional to the number of hours worked. For simplicity, in the calculation example, the fixed and variable parts of the salary are assumed to be equal.
• Percent fulfillment of the sales plan and the work plan are calculated in relation to the actual indicators to the planned ones (as in the above table of calculated values).

Formulas in Excel for calculating KPI for each employee: \u003d (50% × (IF (D3<80 %; 0; ЕСЛИ(D3<90 %; 0,5; ЕСЛИ (D3<100 %; 1; 1,5))))). Влияние показателя 1 и показателя 2 на сумму премиальных считается одинаковым. Коэффициенты тоже равны. В связи с этим для расчета показателей 1 и 2 берутся одни и те же формулы.

• The formula for calculating the amount of the premium to be accrued is =C3 × (F3+G3). The planned bonus is multiplied by the sum of indicator 1 and indicator 2 for each employee.
• Salary - salary + bonus.

In order to evaluate the work of employees according to several key performance indicators, a matrix of the following type is compiled:

Figure 3. Worksheet form.

1. Key indicators A - private KPIs (.
2. Weights B - .
3. Base C is the minimum value of the indicator.
4. Norm D - planned level.
5. Goal E is the value to aim for. Above-standard indicator.
6. Fact F - the actual results of the work.
7. KPI G index - the level of the result in relation to the norm.

The formula for calculating the KPI index:

An example of filling in the matrix for an office manager is shown in the following figure.

Figure 4 Example of KPI calculation.

The performance ratio is the result of the calculation according to the formula (1).

How to implement a KPI system in an organization

As can be seen from the above example, the implementation of a motivational personnel management system based on key performance indicators does not require serious investments and highly qualified developers. Special training of personnel services specialists is not required - the ideology is simple and popular. There are many enterprises where semi-automated systems based on Excel function. The whole question is how effective is personnel management when using the considered technology.

As can be inferred from the example, the KPI system is best suited for enterprises with discrete production, for example, machine-building enterprises. For industries with a continuous process (for example, nuclear power plants, chemical plants), the main attention should be paid to the technological component of control, its reliability and safety. In this case, for example, it is impossible for an inspector of the labor protection department to formulate appropriate evaluation criteria related to the financial well-being of the enterprise.

To correct this shortcoming, it is possible to supplement the KPI assessment complex with a competency assessment subsystem. An example of a rather successful solution is the STP 001.089.010-2005 standard, developed at OAO Irkutskenergo.

OAO Irkutskenergo uses special forms to assess competencies, which are filled in by experts - the head of the assessed person and his colleagues. An example of such a form is presented in Table 1.

Table 1. Evaluation of an employee by competencies.

Criteria for evaluation (competencies)	Grade			Competency average score
	Supervisor	Colleagues (average score)	Self-esteem
Initiative(willingness and ability to solve professional problems and issues, indifferent attitude to work situations, desire to actively participate in work, influence the result of activity)
(ability to prioritize, stick to a task plan)
Job Knowledge(professional literacy, practical knowledge and skills, understanding of the content of work, knowledge of methods, procedures, rules)
A responsibility(timeliness, conscientiousness and quality of assignments)
Communication with the leader(informing the manager about the degree of completion of work tasks, consultation with the manager on the standards of work performance)
Communication with colleagues(effectiveness of interaction in a team)
Discipline(attitude to working time, its use, compliance with the working day)		X
Average score for competencies (Ok)	X	X

Experts assess the employee's compliance with the requirements of the position in points. In this case, the scales of the dictionary of competencies are used. Examples of scaling two competencies are presented in Table 2.

Table 2. Competence scaling.

Initiative

score	Characteristic
1	When solving production issues, does not show personal initiative
2	Rarely makes constructive suggestions
3	Often comes up with proposals that are rarely implemented in practice
4	When solving production issues, he constantly makes constructive proposals within the framework of his job duties, brings them to practical implementation
5	When solving production issues, he constantly comes up with constructive proposals not only within the framework of official duties, but also concerning the work of the unit as a whole. Brings proposals to practical implementation

Ability to plan work effectively

score	Characteristic
1	Not able to plan even the simplest work, to determine the time costs. Unable to identify work steps
2	Does not do well with planning, does not attach importance to the cost of completing the task. Does not know how to break the task into stages of work and set the priority of execution. Plans are mostly unviable
3	Not very good at planning. Makes mistakes in determining costs, priorities, ways to achieve. Plans often fail
4	In general, he copes with planning, when drawing up plans, he takes into account the costs of achieving his goals. Usually, all tasks are aimed at achieving the overall goal of the activity.
5	Well determines the cost of implementing the plan. The goal is divided into stages of achievement. Correctly prioritizes at all stages of the implementation of the plan. Always strives to make the plan viable and realistic