Sample kpi. Will share his experience in implementing KPIs in production. KPI types and principles

1. What is KPI?

KPI (Key Performance Indicators) - “key performance indicators”, but more often translated as “key performance indicators”. KPI is one of the tools with which you can analyze how effectively the staff is working to achieve the company's goals.

KPIs are often used by larger companies (not where the owner, director, salesman and loader are the same person), but vice versa, when the company has a large number of employees and branches. The use of "kipiai" greatly simplifies the monitoring of the performance of all divisions of the company. With key performance indicators in place, we are able to manage the process and make changes to it. Set goals for staff and motivate them to achieve them.

Let's take an example of key performance indicators. You are a large store owner household appliances and you have 12 sales managers on your staff. The performance of each manager for the month can be assessed by the following criteria:

• what% of customers the manager spoke to made a purchase;
• average customer check;
• fulfillment of the sales plan (for example, the minimum bar for a month is 350,000 rubles, and the manager's salary will depend on how many% he overfulfills the plan);

If, for example, you need to sell blenders of a certain model, you can set for each manager a plan of at least 5 units, if more, then from each "extra" unit the seller gets 3% of its cost. Thus, the goal is to sell a certain product and to motivate managers for this. As practice shows, the optimal number of KPI criteria for one employee is from 5 to 8.

2. Types and principles of KPI

Types of KPIs:

• Result KPI - quantitative and qualitative indicators of the result;
• Cost KPI - the amount of resource costs;
• Functioning KPI - how much the execution process matches the established algorithm;
• KPI performance - derived indicators characterizing the ratio of the result obtained and the time spent on obtaining it;
• Performance KPIs (performance indicators) are derived indicators that characterize the ratio of the result to the cost of resources.

There are principles to be followed when developing KPIs. The cost of measuring performance indicators should not exceed the management benefit of using the indicator. You will not hire a person who will count the number and duration of the manager's calls, the result will not justify the costs. For a more accurate result and the possibility of comparison, the indicators should be measurable and as simple as possible, understood equally by each unit, in order to avoid misinformation. And, most importantly, for the KPIs to be necessary, if we do nothing based on the results of their measurement, then in this case they are meaningless.

3. Pros and cons of KPIs

The main advantages of the KPI include:

• fairness, transparency and comparability of results (management and staff see who works and earns how much);
• correction of the employee's work according to the lagging indicator;
• the involvement of personnel in achieving the goals of the enterprise;
• quality control of performance of duties.

Despite all the positive aspects of the KPI system, it is not universal. Not all indicators in the work of personnel can be measured quantitatively, and therefore each business has its own ways of assessing efficiency, and finding them will take a lot of time, labor and finance.

4. How to calculate KPI. Example

There is no single formula for calculating KPIs, since each company has its own specifics and, therefore, its own "KPI". Let's take an example calculation wages sales manager, taking into account his KPI in the online store "Kotelok". The rate is 7,000 rubles. + 2% of personal sales (800,000 * 0.02 \u003d 16,000 rubles) + bonus for fulfilling the plan by the number of new customers (2,000 rubles) + bonus for fulfilling the company's plan (for example, the plan is 100% fulfilled - 5,000 rubles , 70% - 3,500 rubles) in our case, 80% - 4,000 rubles. In total, at the end of the month, the manager will receive a salary of 29,000 rubles. This counting system motivates managers to sell to existing customers and attract new ones.

5. What is KPI in sales

In the sales area, the main KPIs for the sales manager and sales department are:

1. Sales volume. The manager is set a plan for certain period time (month, quarter, year). For example, in March a manager must make sales for 1,300,000 rubles.

2. The number of sales. The number of customers who made a purchase (number of checks).

3. Traffic. The number of customers who learned about your product are potential buyers. Of course, attracting traffic is the task of marketers, but the seller himself can also influence the flow of customers, for example, using word of mouth.

4. Average check. Introduced in order to stimulate the manager to sell additional products. For example, purchase a heat-resistant glass plate or baking dish for the oven.

You can develop a KPI system yourself, but this will require a lot of effort and eat more than one dog. Most large companies nevertheless, they prefer to entrust the construction of the "kipiai" system to professionals with extensive experience in this area. If you need help implementing KPIs in your company, please contact us, we will be happy to help!

To stay afloat and generate profits, a business must operate at maximum efficiency. Just two decades ago, no one thought about how effectively a particular company, manager, manager or locksmith works. The main thing is that it is profitable. But now the approach has changed. You've probably heard aboutkey performance indicators KPI. What it is and what is such a system for? Consider this in this article.

KPI - what is it?

The efficiency assessment system appeared in Russia just five years ago and is still used in few places. It is mainly used in IT and other modern industries. Let's consider,what is KPI and what is this assessment system for.

KPI - a key indicator of the effectiveness of personnel or an enterprise

KPI stands for Key Performance Indicator, which translated into Russian means a key performance indicator. This system is a set of several indicators that assess the performance of each employee in the enterprise. Knowing the KPIs for different groups, you can develop average performance indicators and introduce a system of active motivation for productive employees.

Note:efficiency is relative rate... It can be calculated both for a specific employee and for a department, workshop, enterprise. Effectiveness can be quantified.

It is believed that the optimal KPI for an employee should be no higher than 5. The KPI can be divided into several types:

1. By cost item (how much resources were spent in monetary terms).
2. By productivity item (by what percentage the capacities were loaded).
3. By the item of efficiency or the ratio of indicators (for example, the ratio of the amount of revenue to the amount of costs).
4. According to the final article (general quantitative indicator of productivity).

KPIs must be specific numbers. They shouldn't take up a lot of time or resources. It is best to tie metrics to the overall performance of the company.

In practice, it often happens that most of the indicators are intertwined with each other. This allows for teamwork and assessment of a group of specialists or departments, motivating them and constantly achieving better results. Managers and bosses of all levels should monitor the result, coordinating their actions for maximum efficiency.

KPI is divided into strategic and current

KPI types

Performance indicators of the enterprise are of two types:

1. Strategic. Thanks to this data, you can find out how efficiently the company operated over a certain period (the longer the time period, the more accurate the result). Thanks to strategic indicators, you can build action plans for the next period of time. Basically, the strategic KPI shows the flow of cash flows, on the basis of which the profitability of production and sales can be calculated.
2. Operational. These data show the real current situation in the company, division, department. Thanks to these values, it is possible to adjust the tasks or goals of the enterprise to dynamic conditions. According to this KPI indicator, you can assess the efficiency of logistics, organization of production, sales of manufactured goods, etc.

Why is all this needed?

With the help of the KPI system, it is possible to realistically assess and measure the rate of achievement of goals and tasks assigned to a specialist. By calculating all the values \u200b\u200band indicators, you can assess the performance based on the results achieved and compare them with the planned ones. You can also calculate whether the target figures for the specialist / department / company have been correctly calculated and drawn up. Numerical values \u200b\u200bhelp to correctly build a strategy and tactics for the future, assessing the real result, not the imaginary one.

Note:the key indicator is tied solely to the result. If some parameters do not affect it in any way, then they can be freely thrown back.

The KPI was developed based on two ideologies:

1. Target management of an organization or department (movement from goal to goal).
2. Full control over the goals set and their revision under certain conditions.

By calculating KPIs, you can competently motivate staff

The very idea of \u200b\u200bKPI allows not so much to assess personnel, but to draw up realistic plans and foresee the results of the enterprise. It is beneficial for everyone: ordinary employees are engaged in turnover, while striving to complete the tasks assigned to them, and not be diffused and delayed the result.Performance evaluation criteria for other personnel allow him to motivate: the more tasks are completed, the higher the salary or bonus. It is beneficial for managers when tasks are solved on time, and not scattered among employees. the enterprise is profitable, since it makes a profit and can make realistic plans for the future based on numerical values, and not empirical ones.

At the moment, the KPI system is considered the most accurate and profitable. It allows you to motivate and stimulate personnel and evaluate the performance of managers at any level.

KPI in production

1. Consumption of raw materials per day.
2. The volume of raw materials in warehouses and in work in progress.
3. Real labor productivity.
4. Storage costs of finished products.
5. The amount of other expenses.
6. The required amounts for the repair and maintenance of equipment.

KPI in trade

To calculate KPIs in sales, you need to know:

1. Revenue volume.
2. The real cost of production.
3. Total sales profit.
4. Possible percentage of rejects.
5. The total cost of products in stock.
6. The total amount of the current asset.

Be sure to use a KPI for planning and strategy development

KPI examples

In order to understand, we giveexamples of key performance indicators KPI for various categories of employees.

KPIs are key performance indicators that measure the performance of each employee. They also help to analyze the work of the whole company, achievements over a certain period and are an excellent motivator for quality work... The main thing is the correct development of the KPI system for a specific position, taking into account all the nuances of the employee's activities in the company.

Universal performance indicators cannot be applied to all positions, because they simply cannot meet expectations. Let's say it's almost impossible to create a KPI for an accountant. The development of a motivation system based on KPIs is an analytical work that includes both the preparation of KPIs and the analysis of the result.

It is important to consider the following:

• There should be few performance indicators, otherwise the calculations will be confusing and, as a result, the goal of the assessment will not be achieved.
• Each KPI must match the final goal.
• The established KPIs should be guaranteed to be achievable and clearly correspond to the sphere of influence and responsibility of the employee (position).
• It is possible and necessary to prescribe employee motivation only on the basis of key performance indicators, then the employee will understand what is expected of him and will move towards a clear goal.

What indicators are

Often in companies and enterprises, KPIs are classified as operational and those that are lagging behind.

Long-term indicators show the result after a certain time has elapsed, while operational (leading) indicators make it possible to assess work efficiency very quickly.

Varieties of indicators in business processes:

• Performance Indicators are the KPIs for profit, revenue, and sales for a specific period.
• Cost KPIs help to measure achievement in terms of financial and time costs.
• Performance indicators reflect the correctness of the employee's activities, his system of work in accordance with the regulations and algorithms of his position.
• Performance KPIs show the level of the ratio of the result to the cost of it in different options.
• The efficiency ratio of productivity gives an understanding of the result achieved in a certain ratio with the time spent.

When calculating KPIs, you should immediately form the goal and priorities for the selected position. In each case, they are calculated separately, depending on the scope of the company. Evaluation methods and a specific calculation formula for a competent assessment of results depend on this.

Calculating KPIs

To understand the picture of developing KPI indicators, we will give an example that indicates an algorithm of actions.

Stages of developing KPI indicators:

1. Team building, selection of members working group and research for each position.
2. Drawing up a methodology for action. Based on the analysis, models of a system of performance indicators for positions are created, regulations are prescribed, indicators are developed and tested.
3. Implementation of the KPI system: established performance indicators are integrated into software, and employees are informed of the conditions and requirements by signing.
4. The final stage of development: monitoring the implementation of KPIs, adjusting indicators during the test period.

In practice, 2 methods of KPI development are most often used: process and functional methods.

The process approach is based on performance indicators based on the internal business processes of the enterprise.

The functional approach is based on the very structure of production or management of the organization, functional responsibilities positions, department, branches.

Let's give in the table an example of calculating two methods of developing performance indicators.

Process method	Functional method
Business process goal (sales)
Dynamics of new customers (specific number)	Profit Profitability Growth of assets in the company
Business Process Objective (Performance)
Dynamics of the increase in the turnover of cash reserves in relation to the previous period	Number of loyal customers Sales volumes for the period in monetary terms
Customer satisfaction business process goal
Minimizing the number of product returns Reducing the time of ordering (placing an order and bringing to a purchase)	Number of new clients Reducing the time spent on serving one client
The purpose of the HR business process
Quick selection of new managers	Percentage of closed and open vacancies for a specific period

For example

An example of calculating the KPI for one employee is shown in the table of the sales manager, where the indicator index is present.

https://yadi.sk/i/jomsvYOq3Kyb2z

From this example and the KPI index, we can see that this sales manager has overfulfilled the plan by 6% and, accordingly, he is entitled to the remuneration agreed upon in his motivation.

To calculate the KPI of a position, you can use several performance indicators and calculate the motivation using the formula:

Salary + K1 + K2 + K3. Where K1, K2, K3 are KPI indicators (manager's salary + established% of sales +% of the number of attracted customers for the period (month) + agreed bonus for high-quality customer service).

So in a simple way you can enter any KPIs into the formula that can be calculated as a result.

Eventually

To calculate the performance of an employee, it is necessary to carefully approach the assessment and goals of the position, and this will require an analysis of the level of performance and the sphere of influence of the employee in specific organization... Having determined the KPI indicators, it is possible to prescribe a motivation system on which the employee's salary will depend.

You will learn:

• What are the pros and cons of the KPI system.
• Which employees shouldn't implement KPIs.
• What KPIs to set for the leader.
• What to do if employees sabotage KPI implementation.
• How to revise the KPI system.

What is a KPI system

KPI is a special system of indicators, using which employers can evaluate the performance of subordinates. At the same time, KPIs - key indicators of each employee - are tied to general business indicators (level of profitability, profitability, capitalization).

Downloads:

Different KPI goals are distinguished, but the main one is to create a situation in the company in which employees from different departments could act together, without contradicting their business actions to each other. The activities of one specialist should not interfere with the work of another or slow it down. All employees should strive for a common goal and work effectively, receiving bonuses for this.

It is believed that KPIs are directly related to the BSC (Balanced Scorecard), but this is not the case. The BSC creators did not use the term KPIs. They used the concept of "measure", "gauge", or measure.

KPIs and BSCs are indirectly related. BSC is endowed with a business process perspective where there are associated goals. To measure the extent to which these goals have been achieved, experts use KPI indicators of business processes.

Downloads:

So what is a KPI in simple words? These are certain indicators that make it much easier to understand what actions should be taken to improve efficiency. At the same time, efficiency is not only the number of manipulations carried out over a certain period of time, but also the benefit that the company received from the work of a single specialist.

Company KPIs are generic. However, in subdivisions they are divided into small ones, called personal. There cannot be many of them. 3-5 clearly marked and understandable indicators are enough. The main requirement is the ability to easily and quickly measure them.

Here are some examples of KPIs . Possible KPIs for a sales manager are as follows: "The volume of sales is not lower than ...", "The number of new customers is not less than ...", "The amount of the average contract for a client is approximately ...", "The degree of proficiency in English is not lower than ...".

Another KPI example. You are the owner of a large outlet for the sale of household appliances. 12 managers work for you. How effectively each of them works during the month is assessed based on the following indicators:

• how many people with whom the manager spoke bought the equipment (in percentage);
• average check amount;
• how much the sales plan is fulfilled (for example, the amount of the minimum level per month is 350 thousand rubles; the level of overfulfillment of the plan in percentage will affect the manager's salary).

For example, you need to sell mixers of a certain brand and manufacturer. In this case, it would be reasonable to set a plan for each manager with a minimum number of mixers equal to 5. If the manager sells more equipment than the planned amount, then he receives 3% of the cost from each “extra” mixer. For specialists, this is an excellent motivation, KPI of this type allows you to successfully sell products. Experience shows that the optimal number of KPI criteria for one specialist is from 5 to 8.

3 interesting facts about KPI

• Key Performance Indicators have been used in the West for over 40 years. In the CIS countries and Russia, it has been used for about 15 years.
• In a number of countries (Korea, Singapore, Hong Kong, Japan, Malaysia, Germany and the USA) the Key Performance Indicators system is a national idea. KPI there is not just a concept, but the basis of the work of all companies.
• Russian President Vladimir Putin proposed creating a Key Performance Indicators system to assess how officials work.

How to avoid mistakes when implementing KPIs

The editorial board of the magazine "General Director" reviewed 6 popular mistakes in the KPI system and gave advice on how to avoid them.

Where does KPI development begin?

KPIs should be created from the top down, starting with the ambitious goals of the company to the tasks facing the individual employee. To fully solve problems, it is necessary that all personnel are involved in the preparation of the KPI system. We are talking about employees working in economic planning, financial, organization management specialists labor activity, the team of personnel departments, sales, technology department.

To get started, the organization needs to figure out which KPI is in priority. To do this, the company clarifies and verifies strategic and operational goals. The formulation of the goal should ideally be such that it does not clearly indicate the financial component as the main indicator. It is better if the financial indicator flows from the main task. With this approach, the company will be able to feel confident in a crisis period.

The goal is to link with the market environment, changes in the market. For example, a company may set itself the goal of becoming one of the TOP-3 in the market for its products or take leadership positions in a certain territory. Once formulated the main objective, subgoals are highlighted.

After setting goals, you should analyze how efficiently the company is now working and how it solves current problems. At the same time, it is necessary to determine how employees' salaries will be calculated.

When creating KPIs in an enterprise, it is important to budget for personnel costs. IN in this case it is divided by type of payment. In addition, it is required to take into account the salary indexation and career growth of specialists.

At the final stage of development, regulations are created, KPI maps are prepared, the methodology for calculating each key indicator is prescribed, and the system is coordinated with the management of all independent units in the company.

The KPI statement should include information about the goals and objectives of the system:

• Improving results and increasing the efficiency of specialists. Development and implementation of employee motivation.
• Increased profitability of the company. Development of goals and performance indicators for each position in the departments and divisions of the company.
• Creation of an information base that will allow making the right management decisions. Ensuring the prompt collection of information and control over the functioning of the system.

Key performance indicators and their types

Key KPIs are:

• lagging, reflecting the results of work at the end of the term. We are talking about financial KPIs that indicate the potential of the company. However, such ratios cannot show how effectively departments and the organization as a whole are working;
• operational (leading), which allow you to manage the state of affairs during the reporting period in order to achieve the goals set after its completion. Operational performance indicators help to understand how things are now at the enterprise, and, at the same time, demonstrate financial results in the future. On the basis of operational KPIs, one can also judge how well the processes are proceeding, whether the manufactured products are good, how satisfied customers (consumers) are with them.

Basic conditions - indicators should contribute to the implementation of intermediate and final goals and all indicators can be quickly and easily calculated. The coefficients are different - qualitative (in the form of a rating or points) and quantitative (in the form of time, money, production volume, number of people, etc.).

KPI examples

KPI for an employee technical support... A specialist of this profile must advise those who are real buyers and help potential clients. The set of KPIs in this case is small. The work of an employee is assessed on the basis of how well he provides consultations, in what quantity, whether customers are satisfied with the service.

Key performance indicators for the sales manager. The number of new buyers should not be below a certain mark, the volume of sales is not less than the established limit, the size of the average contract for a client within the indicated boundaries, ownership english language at one level or another.

The KPI system consists of a number of indicators, but the universal ones are:

• Process, indicating what result the process brought, how requests from consumers are processed, how new products are created and introduced into the market environment.
• Clients: how satisfied are the clients, how the interaction with the sales markets is carried out, how many buyers were attracted.
• Financial allow us to judge the foreign economic situation of the enterprise. Here we are talking about the level of profitability, turnover, market value of products, financial flow.
• Development criteria show how dynamically the company is developing. These are the degree of productivity of specialists, the level of staff turnover, the costs for each of the employees, the motivation of employees.
• Indicators external environment: how the price fluctuates, what is the level of competition, what price policy On the market. These indicators must be taken into account when creating a KPI.

How to calculate KPI

Stage 1.Selection of three key indicators of the effective activity of a specialist:

• the number of users who were attracted to the site;
• the number of repeat orders from existing customers;
• the number of recommendations and positive reviews that appeared after purchasing a product or ordering a service on the website and in the social networks of the trade organization.

Stage 2.Determination of the weight of each indicator. The weight in the total amount is 1. The largest share belongs to the priority indicator. As a result:

• the number of new customers is 0.5;
• the number of repeat orders - 0.25;
• reviews - 0.25.

Stage 3.Analysis of statistical data for the past six months for each KPI and development of a plan:

Stage 4.KPI calculation. An example is presented in this table:

KPI calculation formula: KPI Index \u003d KPI Weight * Actual / Goal

In this case, the goal is the planned indicator of the marketer. The fact is the real result.

It becomes clear that the specialist has not achieved his goals completely. However, based on a total of 113.7%, it is safe to say that the real result is quite good.

Stage 5.Payroll preparation.

In total, the marketer is owed $ 800, of which $ 560 is a fixed portion, and $ 240 is a variable. Full salary the specialist is paid for an index equal to 1 (or 100%). Thus, the rate of 113.7% indicates that the plan has been overfulfilled, which means that the marketer is given a salary with an additional bonus.

Result:

560$ + 240$ + 32,88$ = 832,88$.

If the KPI is less than 99%, the amount of the bonus is reduced.

Such a table allows you to see the problems in the work of a marketer, difficulties that he cannot cope with. It is likely that poor performance can be caused by the wrong strategy for increasing customer loyalty. At the same time, it is possible that initially the plan itself was drawn up illiterately. In any case, the situation needs to be controlled. If things don't improve in the future, review the performance requirements.

If you adhere to this policy, you will learn what the KPIs are in the production process, sales, etc. You will better understand what the calculation of indicators and the process of their implementation should be.

The calculation can be modified taking into account the planned results, supplemented by new values: an indicator of the number of solved and unsolved problems, a system of penalties for poor performance on the main points in the plan.

So, for the fulfillment of the plan less than 70%, the employee may not receive a bonus at all.

There is also the following scheme for calculating the bonus part of the salary for a specialist who has fulfilled the sales plan:

KPI implementation in the company

Both employees and third-party consultants can be responsible for the process of implementing the KPI system created in the company. At the same time, one should take into account what is the specificity of the enterprise, how business processes take place in it, what goals and objectives the company sets for itself. It is necessary that the rank-and-file personnel are aware of how the wage formation system will change. Communicate to employees that their level of performance will be the main metric. When introducing a KPI system, specialists should be trained. Staff should understand that the changes are primarily beneficial to them. The implementation of the system implies the development of special documentation: labor contracts, staffing table, collective agreement and other papers related to payment of employees' activities.

Before introducing a KPI system, test it through a pilot project. Take one or two departments and test new processes and wage formation in them in a pilot mode. The ratio of the fixed and bonus components of payment can be adjusted in real time, taking into account the target indicators for specific groups of personnel.

When the new order in the company has been tested and completely revised, it can be introduced into other departments. Remember, it's best not to implement a KPI system without testing. Within the framework of the pilot project, it will be possible to clearly understand what difficulties the system causes for the personnel, learn about possible deficiencies and quickly eliminate them. All specialists of the enterprise must work towards a common goal. Otherwise, employees will only experience discomfort, and all actions and aspirations will be in vain.

In the process of introducing KPIs in the company, make sure that the indicators can be adjusted if the need arises. Thanks to constant monitoring of indicators, it will be possible to timely adjust to changes in the market environment and edit the working strategy. In addition, every year the premium formation model should be improved, that is, it should be optimized. As part of the optimization, the estimated indicators are changed to other, more relevant for certain employees and departments.

What KPIs to set for a manager

KPIs of personnel and management should be related to the main tasks of the enterprise. You need to know exactly what you want to achieve after a certain period of time. You can strive to stay ahead of the competition and become a leader in your industry. Another option - the head of the company wants to sell the business on favorable price... The KPI for the first case is an increase in the customer base and sales volumes, for the second, an increase in the company's capital and the achievement of the maximum selling value.

The main goal must be written down and formalized, and then broken down into subgoals. When specialists successfully complete subgoals, they are getting closer to solving the main task of the enterprise.

If we are talking about a large organization or holding, a director's KPI is required for each division and branch. If the owner of a large enterprise plans to compare the performance indicators of General Directors, geographically distant from each other, the development of unified system estimates. It should be remembered that those KPIs that are easy to achieve in large regions are not always easy to achieve in small ones. In this regard, the system can be formulated in approximately the same way, but the indicator numbers should be different for managers in different regions.

When preparing KPIs, try to set indicators in the optimal quantity so that the employee can easily track performance. It is better if there are five KPIs. When installing more indicators, the director may be inattentive to the main ones and focus on minor ones.

When creating a management KPI system, a combination of general and personal metrics is optimal. General indicators are called the results of the department's activities under the authority of a specialist. On the basis of general indicators, it becomes clear how the team works, how much the leader is interested in solving the assigned tasks. Personal indicators are defined as individually achieved goals and performance.

If the KPI system is created well, the coefficients show how each of the leaders works, and this information is useful for the company.

KPIs are key performance indicators of a company or a separate unit. Read practical advice on the development and implementation of KPIs in the company. And download sample KPIs for different departments, including the CFO and his team.

What is KPI

KPI stands for Key Performance Indicators - Key Performance Indicators.

The KPI system is a reward system based on key indicators.

Working on KPIs allows employees to better understand what they need to do to be effective. Moreover, efficiency means not only the volume of work performed by them, but also the benefit received by the company.

How to develop a KPI system

To create a Ki P Ai system in a company, you must:

1. Select a KPI model.
2. Define KPIs and assign responsibilities.
3. Create reporting.

How to choose a KPI model

There are many methods for defining and grouping indicators. In Russia, the classic approach is most often used, as well as the Balanced Scorecard (BSC).

The classical approach is based on the use of primarily financial indicators such as; see figure.).

Drawing... EVA based KPI tree

Note that only financial indicators may not be enough to implement the developed strategy. Development of customer relations, personnel management, product quality, efficiency of internal business processes, implementation and development of information systems, that is, those aspects of activities that are difficult to give a cost estimate, are no less important for business.

Within the framework of the balanced scorecard, four main aspects of the company's work are distinguished, which provide answers to the following questions:

• how the company is evaluated by shareholders ("Finance");
• how customers evaluate it (“Customers”);
• how to improve the quality of activities ("Personnel");
• what processes can provide a company with an exceptional position in the market ("Business Processes").

What to choose

Which approach to take depends on the level of the business. Small companies the classic approach is more suitable, since it does not require significant costs for attracting consultants and implementation information system... In the future, it will be possible to refine the created classical system by including non-financial criteria in it.

Large companies should use a balanced scorecard, as it gives a more complete picture of the company's activities.

How to develop KPIs for finance staff

Edition of "Systems CFO»Prepared motivation schemes, regulations and reports on KPI performance for employees of the financial service. Download and use in your company examples of ki pi ai for the chief accountant and other employees of the accounting department, for the treasury, employees of the investment department, the budgeting department and other departments.

How to choose key metrics

To determine which KPIs to use, you need to:

1. Select groups of indicators and distribute the responsibility of managers of different management levels for each of the groups.
2. Make the most detailed list of KPIs used by management.
3. Select the criteria that most characterize the achievement of strategic goals.
4. Formalize algorithms for calculating each of the ki pi ai.

Allocation of groups of indicators

If a company uses a classic approach to developing a KPI system, then the following groups should be distinguished:

• liquidity;
• turnover;
• financial stability.

Responsibility for each of the groups will be distributed among the leaders of all levels of management. For example, the CEO is responsible for the overall profitability of the business, while the profitability management certain types products should be transferred to the heads of departments.

When using a model that includes both financial and non-financial KPIs, the following groups of key performance indicators can be distinguished:

• financial and economic - for business in general;
• customer satisfaction;
• main and auxiliary business processes (see how to describe them);
• staff efficiency.

After identifying the main groups, it is necessary to determine who will be responsible for their implementation. See Table 1 for an example of the distribution of responsibilities.

Table 1... Indicator groups and distribution of responsibilities

Detailing

The list of ki pi ai for each of the selected groups should be as detailed as possible. Ask for a list of managers who will be responsible for a particular group. For example, the CEO should indicate what criteria he uses to assess “satisfaction of shareholders (owners)”.

As a result, several hundred criteria can be included in the general list of KPIs. It is obvious that the construction of such a system is unjustified, since it will lead to a significant increase in the workload on personnel associated with the collection and processing of data required for the calculation. Therefore, from the general list, you need to select those data that are really needed by management for management and will allow you to assess the degree of achievement of the set goals, and not just be controlled "for information."

KPI selection

Form an expert group to select a KPI. As a rule, it includes directors of departments and heads of departments. Their task is to characterize each of the indicators according to the following criteria:

• whether it reflects the degree of achievement of the company's strategic goals;
• is it understandable, first of all, to those managers who will have to make a decision on its basis;
• is it useful for making decisions.

In addition to those listed, other criteria may be applied, for example, the ability to use performance indicators in planning or analysis.

The assessment procedure can be formalized based on the use of a scoring system. For example, 1 point - the criterion is not met, 2 points - partially meets the specified criterion, 3 points - meets the specified criterion. Indicators with the most points in the course expert judgment, will be included in the ki pi ai system.

As a result, a “short” list of the company's key performance indicators will appear (see table 2).

table 2... Example of ki pi ai trading company (fragment)

KPI group	Key performance indicators	Responsibility
Satisfaction indicators
Shareholders	Profitability total assets, profitability equity capital, profitability of sale or rate of return, profitability of cash flow	General director
	Sales market share, number of product defects, number of customer-buyer claims, turnover of active customer-buyers, duration of the functional order execution cycle, availability commodity stocks for buyers
Staff	Labor productivity of the organization, staff turnover, average salary staff
Financial management indicators
Return on investment	Return on: assets, equity, invested capital, return on marginal return on equity in inventory and receivables	CFO
Business activity	Return on sales, estimated shelf life of inventory, turnover of accounts receivable, share of overdue accounts of debtors, turnover accounts payable, share of overdue accounts of creditors, sales proceeds, profitability of inventories, payment proceeds, expenses for the period, net profit, operating leverage, investment costs, realized margin
Liquidity	Current liquidity and urgent liquidity ratio
Financial stability	Interest coverage ratio on loans
Company value	Net present value
Cash flows	Amounts money by location, cash turnover, profitability of cash flow

Description of parameters and algorithms for KPI calculations

The algorithm for calculating each of the key indicators should be clear to managers of different levels and uniquely defined. An information card can be developed for each KPI, including the main parameters and a description of calculation methods, the frequency of calculation and revision, the person in charge, etc. (see Table 3).

Table 3... KPI Information Card

Name
The turnover of active customer buyers
Commissioning date	Date of the next revision
Recipient	Responsible for the indicator
General director	Deputy general director on commerce
Frequency of provision	Reporting period
1 time per month	month, last 7 months
unit of measurement	Analytical measurements
	Branches, customer segments
Definition	Appointment
The ratio of the number of active clients who stopped working to the average number of active clients	Customer Satisfaction Monitoring
Calculation method
Number of active clients who stopped working for the period: Average number of active clients for the period × 100. Active customers are those who have received the goods one or more times during the period. Average value \u003d (Value at the beginning of the period + Value at the end of the period): 2

How to report on KPIs

To collect and summarize information on KPIs, use any convenient format of management reports (see table 4 for an example).

Table 4... Monthly executive report

	January 2019
Commercial Director
The name of indicators		Including networks
		discount
Basic
Sales volume (including VAT), RUB mln
Sales plan fulfillment,%
Amount of receipts, million rubles
Fulfillment of the income plan,%
Sales organization efficiency
Accounts receivable at the end of the period, RUB mln
Overdue accounts receivable at the end of the period, RUB mln
Weighted average grace period
Share of expenses for organizing and making sales in sales volume,%
Number of active clients, units
Average sales per customer, RUB
Share of customer segments in sales,%
Profit margin by segment,%
Efficiency of the commercial service structure
Number of sales managers, people
Average sales per manager, RUB
The efficiency of the commercial service
Client base coverage,%
Share of managers who completed the plan,%
Number of orders, units

It should be noted that the KPIs set for different levels of company management are tracked and reflected in management reports at different intervals. For example, payment amounts or cash balances need to be monitored daily, and customer satisfaction criteria should be monitored no more than once a month.

Depending on the specifics, as well as on the information needs of managers management reporting can be formed in a wide variety of analytics (by brands, product groups, categories of personnel, types of assets, distribution channels, etc.).

Conclusion

In the process of creating a KPI system, you will have to face various problems: resistance from employees, the need to adjust accounting policies for the purposes of accounting and management accounting; ensure the collection of the necessary data to calculate the selected key performance indicators; periodically revise the list of indicators, etc. However, organizations that have implemented KPIs, as a rule, achieve good results, since the company creates a system of performance indicators that is understandable to management, and responsibility for management is delegated to a wide range of managers.

After the implementation of the KPI system, it is important to constantly analyze its relevance, since the business processes, strategic goals, and the external environment may change in the company, so some indicators may lose their relevance, while others may lead to unplanned results.