How to Create KPIs

KPIs are "key performance indicators." These indicators are gauges that help those in business management ascertain how near (or far) the company or department is from reaching a predetermined goal or set of goals. Writing KPIs can help a manager and employees see what still needs to be done and motivate them to achieve these objectives. The process of writing KPIs in and of itself is not difficult. However, creating KPIs that will be effective requires consideration.

Write KPIs as concise, individual documents. Each KPI should correspond with a certain category, department or project. For example, one KPI could be written targeting client satisfaction, while another might be geared toward overhead costs.

Begin the KPI document with a header defining the purpose of the KPI. Keep it as brief yet specific as possible. One or two sentences is sufficient. For example, a KPI for client satisfaction might have the heading, "Increase Client Satisfaction."

List the purpose of the KPI. It is important for both management and staff to know why they ought to strive to reach a specific goal, or why this performance needs to be measured. Explain briefly how reaching the set goal or logging time spent on an action will be beneficial.

Specify how the KPI will be measured. Include the frequency of measurements as well as the length of time it will occur. For example, if you are writing a KPI regarding client satisfaction, you might implement a telephone survey that occurs following each call and will take place over a 3-month period.

Set a target goal. Determine a goal that is quantifiable and measurable. It should provide the desired outcome, such as a certain percentage within a specific time period.