Key Performance Indicators (KPIs) are the tried and true best practice for tracking success towards specific goals over time. But how can organisations turn the best KPIs into measurable, insightful outcomes?

In this post, we'll break down the basics of selecting the right KPIs and how to make them generate an impact for your company with Social Discipline and Promise-Based Management.  

What are KPIs?

If you've been in the business world for very long, chances are you are familiar with Key Performance Indicators. They are the key measurable values that track progress towards organisational business goals aligned with your company mission on a regular basis. For example, a sales team may track the average number of cold calls a sales development representative makes per day or week as a KPI.

KPIs show whether a person, team or company has achieved their business objectives within a specific time frame. Managers and human resource teams often use KPIs as a guideline for evaluating whether or not a business process is effective and for tracking individual employee performance.

In a broad scope, there are two types of KPIs — business KPIs and departmental KPls. Departmental KPIs are specific to the responsibilities of each department and can be external or internal. Internal KPIs measure progress towards goals within the company, while external KPIs track progress goals with customers, clients or business partners. Organisations typically track and measure a broad range of KPIs on a dashboard or reporting tool to gauge progress towards goals.

KPI Examples: Best Practices for Measuring the Right KPIs

Let's say you're a new small business owner and your team has reached consensus on the company vision, core values and strategic goals. You have laid out overarching organisation-wide business goals and set targets for each department. You're ready to determine your KPI key metrics so you can track progress.

Regardless of the type of target, good KPIs are relevant, measured in real time, aligned to the company's core values and provide powerful insight. Deciding which KPIs are right for your business depends on your industry and specific departmental objectives. For example, sales, marketing and human resource departments will all have independent KPI metrics to track.  

Competitive sales teams thrive on financial KPIs because revenue is easily measured. Common KPIs that sales teams track are usually related to cash flow, such as:

• Average profit margin
• Net profit margin
• Conversion rate
• Average number of sales per salesperson
• Average time to acquire a new customer
• Customer lifetime value
• Monthly sales growth

Marketing teams will measure a different set of KPIs to illustrate the effect of marketing campaigns across a variety of channels, including:

• Average time spent on a page
• Social media shares
• Website traffic
• Return on ad spend
• Total number of content downloads
• Net Promoter Score
• Total number of unique website visitors
• New business leads generated

Human resource departments have a wide range of numbers to crunch, and focused financial metrics help them keep the entire organisation stable and adequately staffed with the right people. KPI examples for HR teams include:

• Job offer acceptance rate
• Total number of open jobs
• Total cost per hire
• Turnover rate
• Average number of applications per job posting
• Gender and ethnicity diversity ratios

Reach KPIs with Promise-Based Management

Mapping out the right set of KPIs is great, but how do you ensure team members are held accountable towards meeting them? Even the best KPI is useless unless employees work towards reaching the goal.

Teams that are fueled by measurable promises are better at getting things done. The habit of crafting intentional promises and the psychology of social discipline can have a huge impact towards KPI attainment. Social discipline and commitment can turn rote tasks into meaningful promises.

The psychological impact of social discipline is the center Promise-Based Management. Social discipline produces an environment of increased self-awareness. When a team member realises their KPIs are visible to the entire team, they hold themselves accountable for reaching their goals and are socially obligated to honor their commitments to preserve their reputation.

Imagine what happens when colleagues make promises to one another in a transparent space. Expectations towards meeting goals become glaringly clear and individual contributions are easy to recognise and reward in a public setting with positive feedback.

Organisations that embrace a culture of making good promises and keeping them benefit from increased productivity and engagement. Employee engagement improves when colleagues trust one another and share ownership of KPIs. Motivation increases, employees work harder and progress towards goals quickens.

Use the Right Software to Track and Measure KPIs

Most organisations use some kind of performance management software to measure progress towards target goals. Samewave's social performance management software organizes employees' responsibilities, creating a simple way to define and track what is needed to achieve successful outcomes.

The best tools for managing KPIs will automatically monitor the specific goals of each team member. Employees are held accountable to the commitments they are responsible for in a public environment. With Samewave, KPI targets and tasks are allotted and measured in one place to keep progress towards goals top of mind.  

An effective KPI tracking tool can generate clear progress reports and KPI visuals to be shared with employees, investors and board members right when you need it. Samewave allows for a steady dialogue pertaining to goals and automatically updates progress in real-time. The software makes it easy to highlight potential problem areas related to KPIs so you can keep your team on the right path before they get off track.

Samewave's simple user experience, intuitive communication tools, robust reporting features, interactive dashboards and straightforward task management tools make it easy for companies to manage KPIs from start to finish. Learn more about how you can collaborate more effectively, evaluate performance and reach your business goals. Get your team on the samewave today, for free.