Managers are responsible for ensuring that employees achieve high levels of performance, reach production goals and advance the overall goals of the organisation. The manager's primary question is "How well is this employee applying their knowledge, skills and abilities (KSAs) in meeting performance goals?" The answer has traditionally come from the formal evaluation process, where managers review metrics of performance to determine whether the employee has achieved desired outcomes. What is often absent from these evaluations is whether employees are devoting their efforts to the "right" activities. Your firm may have many high-performing employees but if they are not focused on advancing the strategic goals of the organizations, their efforts are for naught. This is where Key Performance Indicators (KPIs) become important and they are applicable to both individual employees, teams, as well as the organization as a whole. Key Performance Indicators are metrics that a company uses to measure success in various areas. KPIs may reflect hard numeric data (e.g. number of new customers per quarter, revenue, etc.) or "softer" issues, such as customer satisfaction or employee engagement. Many times KPIs are used to conduct staff evaluations; e.g. did the employee meet their sales quota for the year or complete projects successfully and in a timely manner? Key performance indicators are metrics that link company strategy with employee efforts. If you think of your firm's strategic practice as a pyramid with vision at the top and employee actions forming the base, the middle portion contains those KPIs that have been selected from your identification of your firm's critical success factors that are derived from overall corporate strategy and objectives. The result of implementing KPIs is that employees will be doing what they should be doing and that metrics for performance are directly tied into your firm's success.
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