What are key performance indicators (KPIs)?

Key performance indicators (KPIs) are metrics used to evaluate the success of an organization in achieving its objectives and strategic goals. They provide a measurable value that demonstrates how effectively a company or individual is accomplishing key business targets. KPIs can vary widely depending on the organization, its goals, and the specific area being measured, but their primary purpose is to provide quantifiable measurements that can help guide decision-making and performance improvements.

By focusing on KPIs, organizations can track progress and make informed decisions based on data. For example, a KPI might measure sales growth, customer satisfaction, or production efficiency, providing insights that help leaders understand whether they are on track to meet their goals, or if they need to adapt their strategies. This systematic approach to performance measurement is essential in human resource management as it helps in aligning employee performance with the company’s objectives, ensuring that the workforce contributes effectively to shared goals.