Don’t forget to do these 5 things when you use KPIs

When you make a promise to a client are you confident your staff can keep it?

Key Performance Indicators (KPIs) track staff performance and are popular management concepts. We highlight how to use KPIs and why they are essential to provide consistent quality service for your customers.

Businesses that implement an ‘effective performance management system deliver (on average) almost three times more profit to the business owners than those who are not yet leveraging the full potential of their team,’ said Business Health.

How well do you leverage that potential?

How to use KPIs to track performance:


1. Set expectations

Everyone likes to know what they are supposed to do and what outcomes they can expect to see.

Figures from the Business Health whitepaper show that those practices where more than half the staff had personal objectives were 76% more profitable than firms where fewer staff had individual KPIs.

KPIs need to be specific, measurable, achievable, realistic, given a time frame and agreed with your staff. Furthermore, it’s important to write them down for future reference and review.

Set expectations about consequences. What will you reward and how? For example, KPIs may be worthy of one level of reward, and exceeding them will attract greater rewards. Be clear about the consequences of poor performance.

2. Review results

Monitor performance, adjust expectations if necessary and consider if your staff need more resources or training.

Keep a ‘no blame’ culture to encourage staff to learn from their mistakes rather than hiding them.


3. Give feedback

Feedback is a management skill that takes practice to perfect.

Follow these tips on positive and negative feedback:

  • don’t avoid or delay
  • provide specific examples of the performance or behaviour the feedback relates to
  • be clear about consequences
  • agree on any changes that need to occur
  • take the opportunity to seek feedback yourself
  • set a date to review performance

4. Give rewards

If you are want to provide rewards and incentives you need to be committed and consistent.

How can you be sure staff will value the rewards you offer? Simply ask what would be of value to them and honour their personal preferences. For example, an afternoon tea celebration and public recognition might be relished by some people but embarrass others.

Use your imagination and staff suggestions to develop a reward program that will motivate without breaking the bank. Whatever you do remember that all the research indicates that the most important reward is your genuine appreciation.

Say ‘thank you’ and give as much attention to your consistently strong performers as you do to managing poor performance. This gratitude practice can make the difference between keeping and losing your best employees.

5. Keep up the momentum

For truly great results provide guidance and feedback on an ongoing basis.

Feedback and rewards are quickly forgotten by employees so they need to be applied continuously and consistently.

Weekly individual employee development meetings (EDMs) between staff and their managers are a good idea. The EDM gives makes both you and your employees accountable for the progress.


Regular reviews enhance performance that can be tracked to your bottom line.

Industry data from Business Health shows that practices where staff performance reviews were held within six months of the survey date had profit levels 35% higher than those where performance reviews had not been conducted for more than 12 months.

In ‘Good to Great’, Jim Collins says ‘If you need to constantly manage people and their performance, you know you’ve got the wrong people on the bus’. If you suspect this is the case it might be time to review your recruitment and selection processes or seek some external assistance.

About Susan Rochester

Susan Rochester has been managing director of Balance at Work since 2006. Susan has a natural tendency to balance analytical thinking with an optimistic outlook to set direction and solve problems. She is an effective facilitator and constantly creates new and more effective ways of doing things, motivated by helping others to achieve their goals.

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