What KPI Stands for and How to Use It in Your Career
By Indeed Editorial Team
Updated 22 November 2022
Published 13 December 2020
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
KPI is one of the most common business acronyms but it stands for much more than a collection of letters. KPI is short for key performance indicator, which is a measure that defines success. Companies and individuals can use KPIs to measure their performance. In this article, we will define what KPI stands for and explore how you can use KPIs for achieving and setting goals and securing work.
What is a KPI?
A KPI, or key performance indicator, is a measurement that helps businesses or people track their performance over time. Usually, businesses and people monitor several KPIs at once to determine their overall success. Businesses establish KPIs to measure their performance over time and against their competitors.
KPIs are often grouped into two categories:
High KPIs: Measure a whole company's performance
Low KPIs: Measure the performance of smaller company elements, such as departments, projects or individual employees
Low KPIs help businesses achieve their high KPIs, so both KPIs contribute to a business's performance.
Monitoring KPI results can help businesses adjust their tasks or goals over time. Businesses can feel confident in their strategies when they meet or exceed their KPI targets. They can also adjust their strategies when their KPIs show areas for improvement.
You might consider your company KPIs when measuring your own performance. Noting your business's KPIs can help you focus on achieving specific goals. Achieving these goals and boosting your company's KPI results can help you secure a promotion, a pay increase or other professional benefits. You can also establish your own KPIs to improve and gauge your performance.
Types of KPIs
Businesses work with different types of KPIs, depending on their industry, size and objectives. Some of the most common types of KPIs include:
Sales and finances: e.g. net profit, gross profit, costs, debt vs equity ratio
Marketing: e.g. marketing spend, online traffic, click-through rate, SEO ranking
Customer relations: e.g. new customers over a set period, in-store foot traffic, customer satisfaction, customer support tickets and resolution times
Human resources and employment: e.g. cost per hire, number of promotions, employee turnover, employee satisfaction
Employee success: e.g. achieving sales quotas, completing projects on time, customer satisfaction, absenteeism
Some KPIs, such as net profit, are easily quantifiable. Others, such as customer satisfaction, are more subjective, so quantifying them is more challenging. However, you can make these KPIs more quantifiable by distributing customer feedback forms with number or star rating systems.
Measuring the results for a diverse selection of KPIs helps businesses measure their true success. The most successful businesses perform well in all areas. Working on the results in one area is likely to also improve a business's results in other areas. For example, satisfied customers tend to spend more. Therefore, increasing customer satisfaction rates should increase a business's gross and net profits.
How to improve your KPI results
Once you know the KPIs expected of you, your department or your business as a whole, you should do your part to improve your results. Improving your KPI statistics takes concentrated effort and focus. The following strategies can help you improve your KPI results:
Consider the logic behind the KPIs
KPIs are much more than a series of criteria with numbers attached. Considering the logic behind why your business wants to measure certain KPIs and what improvements the results can do for your business can help you stay motivated. For example, companies might measure absenteeism because they know companies work most efficiently when as many employees as possible are working towards their goals. Remembering this can encourage you to always attend work when you are well and able.
Read more: Extrinsic vs. Intrinsic Motivation
Create clear strategies
Creating clear strategies for improving your KPI results gives you a plan for achieving your goals. Try to list three actions that should make your KPI results better. For example, imagine you wanted to work on improving the KPI measuring the number of projects submitted on time. You might achieve this through the following three actions:
Creating a daily schedule breaking down what you should achieve each day
Setting boundaries with friends, family and coworkers so you can focus on projects
Using time management apps to improve productivity
Adopt a positive daily habit
Changing just one thing is much easier than greatly altering your behavioural habits. Consider the one thing that will make the greatest impact on improving your KPI result and turn this activity into a daily habit. For example, in the above scenario, you might start each day looking at your schedule. You might then work on the allocated component of the project first thing in the morning. Mornings are ideal for priority work because fellow employees are usually too busy preparing for the day to divert your attention.
Regularly review your KPI results
Reviewing your KPI results regularly lets you know whether your strategies are effective. Review your KPI results at least once a week, at regular intervals. Plot your KPI results over time and see whether your plans are improving your performance.
If you do not see the results you want, reflect on the reasons why. Be honest with yourself. Consider how well you have stuck to your plan and whether anything has distracted you from your goals. If you feel you followed your plan closely, brainstorm new strategies that may deliver the results you want. Keep reviewing your KPI results over time and adjusting them as required for the best results.
Celebrate your achievements
All improvements are worth celebrating. Make sure you take time to acknowledge your hard work whenever you see your KPI results improving. Consider rewarding yourself with a special meal or a new item of clothing. Taking time to congratulate yourself can help you stay motivated and keep striving to improve your KPI results.
How to set your own KPIs
Setting your own KPIs can help you improve your performance. Consider your professional SMART goals, then determine what KPIs will help you achieve in the workplace. For example, a salesperson may want to exceed their monthly sales quota of £30,000 by 20% in six months' time. This is a SMART goal because it is:
Specific: The salesperson knows how much the sales quota is and how much more they want to sell in a specific time.
Measurable: The salesperson can look at their monthly sales figures to determine whether they have met their goal.
Achievable: The salesperson feels the goal is achievable because they know other salespeople who post similar sales figures.
Relevant: As a salesperson, boosting sales figures are a very relevant measure of success
Time-bound: The salesperson made the goal time-bound by stating they will achieve the sales figure in six months.
With their SMART goal in mind, the salesperson will consider the KPIs relevant to it. They might include:
Monthly sales figures: This KPI directly relates to achieving the SMART goal. Monitoring the sales figure each month will determine whether the salesperson is on target or should adjust their strategy.
Customer satisfaction: Satisfied customers tend to spend more money more often. Monitoring customer satisfaction and attempting to improve this KPI should boost the monthly sales figures.
Absenteeism: Salespeople can only sell while they're at work. The salesperson should try to get their absenteeism figure as low as possible.
Time spent on each customer interaction: Salespeople who spend a long time on each call may develop stronger bonds with their customers that encourage sales. However, they may also miss sales opportunities. Monitoring time spent on customer interactions can help the salesperson strike the right balance.
Follow the same steps to improve the results of your KPIs as you would when working on company-set KPIs.
How do you show KPI results in your CV?
Improving KPI results can make you more attractive to potential new employers. Adding your KPI results to the employment history section of your CV will make your application stand out. Your KPI results show potential new employers the value you could bring to their company. If you could improve KPI results at your existing company, employers will feel you could help them improve their own KPI results. Use these examples as a guide when expressing your own KPI results:
Increased company sales revenue by 20%
Won 54 new clients in the year 2019
Decreased energy costs by 68% by implementing sustainable measures
Decreased customer turnover rate by 31%
97% of all students earned an A-C grade in their end-of-year exams
You can note down any company KPI results or the results of KPIs you recorded to improve your own performance. However, they should be relevant for the position you're applying for and your new employer's own KPIs. For example, if you are a retail assistant applying for a position in a fashion store, results related to sales revenue are very important. However, if you are changing careers and becoming a teacher, you may decide these results are less important.
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