Key performance indicators, or KPIs, are critical for business success — especially for Accounting and Finance teams in the ongoing tight talent market. They are a quantifiable measurement used to track employee performance, map organizational alignment, and determine how your company is progressing toward business goals. Performance metrics identify where to allocate more resources and attention and empower you with data for informed decision-making.
KPIs are the foundation of organizational and strategic improvement. Every department, team, and individual should have clear productivity benchmarks. But goal setting is only one part of your business success equation. Continuous feedback is the other.
KPIs and Employee Performance
As we approach the mid-year mark, key performance indicators are essential for evaluating employee progress, setbacks, and outcomes. KPIs must be specific, quantifiable, and appropriate for measuring performance over a period of time.
When done correctly, KPIs measure SMART goals:
- Specific:Â Focus on executing a specific task or behavior with clearly defined expectations.
- Measurable:Â Use a numeric value to determine how the goal will be tracked and met.
- Achievable:Â Set realistic and reasonable targets and identify resources needed.
- Relevant:Â Align to business goals through short- and long-term activity.
- Time-bound:Â Assign a timeframe for completion.
No one should create SMART goals or KPIs in a vacuum. Team leaders should work with direct reports to align individual goals with team and department objectives that support organizational and strategic goals.
Performance metrics shouldn’t be set at the beginning of the year and revisited only during quarterly and annual evaluations. They require regular review and continuous feedback. They are not only a tool for assessment but also for holding accountability and giving recognition and should be incorporated into your weekly and monthly conversations. If you have forgone regular performance feedback loops during Q1 and Q2, the second half of the calendar year is a good time to rectify this and build a frequent cadence through year-end. Performance conversations quickly identify when targets aren’t met and help map course correction when needed. They also provide opportunities to recognize incremental wins.
KPIs in a Performance Culture
One of the best ways to raise employee engagement and highlight corporate values is by recognizing outstanding performance and exceptional work. When individuals understand how they contribute to their team, department, and organizational goals, they have more buy-in for business success. They also feel greater pride in their work and are driven to achieve excellence. People like being part of a winning team and appreciate a corporate culture that emphasizes personal achievement and results.
Using KPIs to celebrate individual and team success builds morale and boosts engagement which can directly impact company growth.
Looking for talent to build a winning team? Alliance Resource Group can help.
