KPI Reporting: What is it and Why It Really Matters?
KPI Reporting is an effective tool for managing staff whether they are in the office or working virtually. KPI stands for Key Performance Indicators and measures the performance of certain areas of your business. The first step to start is to find the parts of the business that are important to you and find a way to track and measure them.
A KPI report provides a summary and detailed information on how well or poorly these specific areas are performing at any given time. KPIs can also measure the performance of your staff for a certain timeframe. KPI reporting comes in various forms, including basic handwritten reports and hand-drawn charts, to computer-generated reports with complicated graphs and charts. Regardless of the format of your report, what is important is that it contains accurate data, complete information, and actionable feedback.
For example, my husband and I own a Property Management firm in Atlanta, GA. When we are looking at KPIs for our staff, each role has a different set of measurements. In the maintenance role, we have KPIs about the number of work orders that are completed and billed within a 2-week timeframe. We monitor the number of total work orders then divide that by the number that are closed out within 2 weeks and track that percentage. An acceptable percentage is 50%. That means that half of the work orders should be closed out within 2 weeks. Anything below that is not acceptable, 50-70% is great and anything over 71% deserves a bonus for our staff.
It is important to pick KPIs that tie into the business objectives. Going back to our example about maintenance, one of the reasons we track this number is the quicker maintenance is handled, the better experience our tenants have with our company. Being quick to resolve these issues gives our company an edge over our competition. It also is a revenue source for our company. The quicker we can process the invoices, the quicker our income is paid and then the trades can get paid quicker as well which means we can attract better trades.
KPI reporting provides you and your staff feedback on the important areas of how they do their job. While every skill and every task are important, there are certain make-or-break areas that they need to excel in. As the business owner or manager, you should measure the areas of your business that give it a competitive advantage over your competitors. In addition, make sure that you are measuring things that your staff can actively control- number of calls handled, articles written, etc. Tracking staff KPIs for things outside of their control can get frustrating.
Another example of staff KPI reporting reflecting the performance of the measured indicator is if your staff member’s main job is Facebook marketing, then reach, engagement rate, page likes, and post likes should be part of his or her KPIs. If your staff is engaged in sales, then their KPIs should measure whether they can hit their quota as well as their daily activity.
KPI reporting helps provide unbiased, accurate feedback to you and your staff about how well their performance is. This is very important when you need to decide on regularization, salary increases, and whether you will be continuing that staff member or replace them. Keep in mind, however, that when preparing a KPI report, you should choose areas that hold the key to the success or failure of your staff. Not every area warrants very close scrutiny. Do not attempt to measure and report on indicators that have little to no bearing on the employee’s performance, and the company’s success. We typically recommend 3-5 KPIs to track and have your staff self-report weekly so that you can counsel them as necessary.
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