When formalizing and implementing a performance management system (PMS) based on key performance indicators (KPIs), there are multiple activities to be considered and many stakeholders to be engaged in the process. Therefore, you’ll need a project plan to make performance management an ongoing process within your organization.
What matters most is not to have an extra process in place, but to do it right by connecting strategy formulation with strategy implementation and KPI across the organizational levels. The way you will design and implement the PMS based on KPIs will play a huge role in the way it will be perceived by the employees. This is exactly why our approach is based on a combination of analysis and research, workshops and feedback activities.
Zooming out, the proposed project plan includes 14 stages:
5 Stages: System Design
5 Stages: System Activation
4 Stages: Project Management
Zooming in, all 14 stages include major sub activities that indicate how granular this puzzle can be. A real image of efforts and resources engaged.
What are the key elements to ensure that a KPI implementation project plan will be a success story?
The differentiator in creating successful conditions is represented by the employees’ trust in the project. Why? Because change brings fear, and fear must be managed in connection to the implementation of KPIs.
Fear of becoming replaceable or unnecessary
Fear of unrealistic (too high) targets
Fear of extra work
As what I wrote in a previous article, if fears exist, then managers should consider looking for a course, training, or coaching session on how to guide their employees in managing their fears. Another step is to have an organizational message with a system that reinforces the organizational culture and the real intentions and effects of such a project, reassuring everyone that they will not be swept away by it.
Could this project be considered for departmental level only?
The KPI implementation project plan can be applied to the departmental level only. It has advantages and disadvantages Since this KPIs system is not a stand alone, the departmental level will ultimately get connected to the strategic (superior) and individual level (lower).
One advantage of this approach is the system will be founded on a strong understanding of operations and specific processes and developed at departmental (mid) level. Another advantage is increased involvement of employees in developing the system. This can generate a high sense of commitment and engagement based on their contribution.
Meanwhile, the disadvantage of this approach is that starting with the lowest level may not ensure a strategic orientation, and it may be predominantly narrow instead, given the limited understanding of the overall organization’s mid- and long-term commitments.
If you would like to learn more about KPI measurement and KPI implementation, sign up for The KPI Institute’s Certified Professional and Practitioner training course.
Productivity is a measure of the efficiency of production, expressed as the ratio of output to inputs used. Performance is defined as the accomplishment of a given task measured against preset standards of achievement, such as accuracy, completeness, cost and speed.
Measurement is an activity which emerged thousands of years ago, driven by the human curiosity to know more about the environment and to understand how the world works. In time, our world has evolved to become more and more complex, pressuring us to constantly refine our measurement tools and techniques.
Today, we see organizations as ecosystems and we act accordingly to our desire to know more and to better understand this environment. Nowadays, challenges are not about accessing information, as most companies are managing large volumes of data. The challenge is to decide what data is the most important for decision making? In this context, key performance indicators (KPIs) are very useful tools to provide:
Clarity
KPIs provide a detailed numerical view the desired results. Based on their selected targets, KPIs clearly reveal the state of performance. Furthermore, alignment is facilitated by mapping contribution to success across all organizational levels. Key performance indicators showcase what must be achieved, and at what levels, in order to achieve the organizational strategy.
Focus
In a business world flooded by data and information, knowing on what to concentrate is essential. KPIs, through their own nature, reflect what is relevant for the organization – what matters the most. This way, resources can be allocated more efficiently.
By monitoring KPI results, managers are able to focus on those area that are underperforming and even to have a proactive approach by taking corrective actions to keep results close to targets.
Improvement
The first step towards improvement is acknowledging the current state of performance. KPIs allow an objective evaluation of the performance level and outline the necessity to take actions that ensure targets are achieved.
Engagement
KPIs drive engagement through a sense of ownership and responsibility for reaching targets. By assigning accountability for each KPI, employees become more committed and motivated to achieve the desired performance levels. Engagement also contributes to building a performance culture which has a significant contribution to the success or failure of any performance management system.
Communication
Providing a common understanding of the organizational performance is essential to efficient business management. KPIs can be regarded as communication tools that help bring all stakeholders on the same page and enhance transparency. Deploying KPIs also demonstrates the interest and ability to use state of the art management concepts, thus providing credibility.
Learning
By measuring and analyzing KPI results, managers gain a better understanding on how business works. KPIs enable the comparison of results in time, they reflect trends, identify patterns and maximize the value of data through predictive analytics. Comparisons can also be done between competitors through benchmarking studies.
When it comes to finance and business management, few people within the TKI family can boast a more impressive path to professionalism than our Head of Research, Marcela Presecan.
When it comes to finance and business management, few people within the TKI family can boast a more impressive path to professionalism than our Head of Research, Marcela Presecan.