Key Performance Indicators

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Pick the right KPI

Different aspects of business performance call for different KPIs. Choose the right KPI for the particular aspects of performance you want to measure.

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You want to measure the efficiency of the various business processes used in your department. Which one of the following represents a KPI that would help you gauge a process's efficiency?

Not the best choice. This KPI would help you measure the financial results of your department's business activities (including selling and marketing efforts), not the efficiency of processes used in your department.


Not the best choice. This KPI would help you measure resources allocated to generating business results; in this case, funding dedicated to market research designed to produce knowledge of customer preferences.


Correct choice. This KPI would help you measure the efficiency of your recruiting and hiring processes.


As the recently promoted head of your division, you'd like a clearer sense of how assets are being invested to generate important business outcomes. Which one of the following represents a KPI that would give you this kind of information?

Not the best choice. This KPI would help you measure the efficiency of a process (in this case, your customer loyalty efforts), not the assets used to generate business results.


Correct choice. Employees' technological expertise is an asset that, when used wisely, can help your division achieve valuable business results—such as development of innovative new products or services.


Not the best choice. This KPI represents market share, which measures a nonfinancial result of business activities, not the assets used to generate business results.


Your boss has announced a new plan to improve understanding of the financial and nonfinancial results generated by the company's various business activities. Which one of the following would most likely generate the kind of information your boss wants?

Not the best choice. This KPI would help you measure the assets and resources used to generate business results—in this case, dollars invested in outreach programs that enhance your company's reputation in the community. It would not help you quantify financial or nonfinancial results (change in public awareness and perception of your company) produced by these activities.


Not the best choice. This KPI would help measure the efficiency of your customer service process. It would not enable you to quantify financial or nonfinancial results (customer satisfaction with the customer service process) generated by your department's activities.


Correct choice. This KPI would help you measure the results (in this case, nonfinancial) of your employee loyalty activities.


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