5 KPIs to measure the effectiveness of company strategies
Measuring the effectiveness of the strategies adopted and implemented by an organization are essential through the use of Key performance indicators or KPIs.
KPIs are measurable values which demonstrate how effectively a company is achieving key business objectives. Basically, organizations use KPIs at various levels to evaluate how much progress the company is making in terms of reaching its targets.
On one hand, high-level KPIs focus on the performance of the business, on the other; low-level KPIs are used to evaluate departmental processes such as marketing, sales, human resources, and more.
While KPIs will depend on your objectives and things you want your company to accomplish, KPIs are essential in assessing the progress of your business and all the people who are involved including employees, customers and stakeholders.
KPIs are important as they help the organization to measure its target, boost the morale of the employees, create an educative atmosphere within the company, and also reveal vital statistics about the overall performance of the company and its employees.The basic KPIs for monitoring and evaluating the success of the organization includes: Productivity, Customer satisfaction, Time, Cost Efficiency, Alignment with goals, and Return on Investments ROIs.
Productivity in Key Performance Indicators reveals the level of productivity of each employee and their contribution towards the growth of the organization. This KPI can be measured by determining the revenue per employee; the ratio of the organization’s revenue per employee to the average salary of the employee will provide you with the productivity ratio for your company. This can be done by identifying the number of projects that have been accomplished per employee.
Customer satisfaction can be determined by conducting surveys to determine if the clients and customers are satisfied with your services. This KPI helps the organization to identify if it is able to meet the expectations of its customers and how the services can be improved. In determining customer satisfaction, you will need to multiply the total point from the survey by 100 then divide it by the number of questions. The result will give you the satisfaction rating from your customers and clients.
Time allows you to measure the efficiency of your employees. It provides you an overview if your employees are doing their job accomplishing a project on the required turnaround time.
This KPI determines the time that has been taken from the beginning up to the end of a project. This is also referred to as the cycle time. Regardless of the scheme, there is a standard benchmark of cycle time being followed to measure this KPI. If you have a shorter cycle time, it will translate to a faster return on investment to your organization as you also make plenty of room for more projects to undertake.
Cost Performance Index helps the company to improve its ability to track finances. This KPI provides the ratio of the value that your organization has earned and the cost you have incurred to obtain such value. With this KPI, the organization can reduce the financial risk involved by making sure that its capital cost is handled wisely.
Lastly, Alignment ratings can be evaluated by conducting a survey participated by project managers, leaders and business managers. This KPI will help you determine if the projects you and your employees have accomplished are right for your organization
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