Do you love KPIs? I guess most likely not. It is difficult to find a person who did not suffer from KPI in one form or another: someone did not reach the target indicators, someone faced a subjective assessment, and someone worked, quit, but could not find out what they consisted of the same KPIs that the company was afraid to even mention. And it seems to be a good thing: the goal of the company is broadcast to you in the indicator, you do everything to achieve it, at the end of the month you receive a bonus or other bonus. Transparent game, fair rates. But no, KPIs have turned into a terrible and uncomfortable monster, which every now and then strives to spur the negligent, but at the same time does not give executive employees anything. Something is wrong with these numbers!
I hasten to inform you: if you do not like KPIs, your company simply does not know how to prepare them. Well, you are a developer.
When the company set the same KPI for all employees
Disclaimer. This article is the personal opinion of the employee, which may or may not coincide with the position of the company.
KPIs are needed. Dot
To begin with, I will make a lyrical digression and outline my position based on experience. KPIs are really needed, and there are reasons for this.
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In the context of a remote, distributed and other self-isolated team, KPI is a way to delegate not only tasks, but also performance assessment to an employee. Each member of the team can see how quickly he is moving towards the goal and adjust his employment, redistribute efforts.
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The weights of KPI indicators clearly demonstrate the priority of tasks and employees will no longer be able to do only easy work tasks or only those that they like.
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KPI is a transparent and unambiguous vector of employee movement within the company: you have a plan, you work according to it. Choose tools, methods and approaches, but be kind to get as close to the goal as possible.
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KPIs bring together and give a small competitive effect within the company. Good competition in the team moves the business to profit.
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Thanks to KPI, the progress of each individual employee is visible, tension within the team is smoothed out, and the assessment of the work of each takes an obvious, evidential form.
Of course, this is all relevant only if the selected KPIs meet a number of requirements.
Where is she, the brink of normality KPI?
Although this article is a private opinion, I will still note the reasons for such a deep interest in the KPI topic. The point is that in the release a cool upgraded KPI calculation module has appeared: now in you can create indicators of any complexity with any estimates and weights. This is convenient and logical: CRM records all actions and achievements (indicators) for each employee of the company, and based on them, KPI values are calculated. We have already written two large articles on this topic, they were academic and serious. This article will be angry because companies treat KPI like a carrot, a stick, a report, a formality, etc. And this, meanwhile, is a management tool and a cool thing for measuring results. But for some reason, it is much more pleasant for everyone to turn KPI into a weapon of mass destruction of motivation and suppression of the spirit of employees.
So, KPIs must be measurable, accurate, executable - everyone knows this. But it is rarely said that KPIs should be, first of all, adequate. Let's point by point.
It should not be a random set of indicators
Metrics should be based on the business profile, company goals, and employee capabilities. All this should be clearly spelled out in the documentation of the KPI system (which you simply must bring to each employee). Prioritize the goals you achieve by setting your own category of importance for each of them using KPI weights, develop individual indicators for each employee individually or for a group of employees. You can't do it like this:
a) KPIs were co-dependent, that is, the performance of individual KPIs of one employee would be influenced by the work of other employees (classic 1: a marketer leads leads, and his KPI is sales volume, if the sales department is underperforming, marketing suffers, which cannot affect colleagues in any way; classic 2: tester's KPIs include the speed of fixing a bug, which he also practically cannot influence);
b) KPIs were blindly replicated for all employees (“let’s fulfill the KPI sales plan for the entire development company” - that’s not possible, but it’s quite possible to make the overall goal achievement ratio a reason for bonuses);
c) KPIs influenced the quality of work, that is, a quantitative measurement would be at the expense of a qualitative assessment.
It should not be a matrix with subjective assessments
KPI matrices from my first job immediately popped up in my memory - a triumph of meaninglessness and subjectivity, where employees were literally drowned in deuces for behavior (they set -2 for "behavior in the company" and immediately reduced the bonus by 70%) . Yes, KPIs are different: they motivate or scare, they are executed or fictitiously cheated, they make the business unattainably cool or completely drown the company. But the problem is, it is not in KPI, but is still in the minds of those people who are engaged in them. Subjective KPIs are those that are tied to "evaluative" characteristics, such as: "willingness to help colleagues", "following corporate ethics", "acceptance of corporate culture", "result-oriented", "positive thinking". These ratings are a powerful tool in the hands of raters, including the HR department. Alas, often the presence of such KPIs turns the entire system into an instrument of corporate disassembly, a method of approaching the necessary and distancing employees who are unprofitable (these are not always bad employees).
Due to the presence of subjective assessments in KPI (as a rule, this is a point system or + - scales), only one solution is possible: they should not be in any form. If you want to encourage personal qualities - introduce gamification on the corporate portal, internal currency, stickers, candy wrappers, and at least give out buttons. KPI is about business goals and performance. Do not allow the formation of a team in the company with clearly demarcated clans that will fight more than lead your company to its goals.
Small businesses need KPIs. Every business needs KPIs
To be honest, I have not often seen KPIs in small businesses, usually the implementation of a performance scorecard starts with a medium-sized business. In a small business, most often there is a sales plan and that's it. This is very bad, because the company loses sight of the performance indicators and the factors that affect them. A good bundle for small businesses: + KPI, as data will be collected based on leads, deals and events, and coefficients will also be calculated automatically. This will make compact not only routine processes, but also save time on filling out various reports. If you want to know how to make this bundle inexpensive, convenient and working, (bonus inside) - you will be contacted.
KPIs are closely related to business processes
It is rather difficult to introduce KPIs against the background of unsettled processes, because there is no systematic vision of goals and desired results. In addition, the lack of business processes in the company immediately imposes a sea of factors on the effectiveness of work: deadline failures, loss of responsible people, blurring of delegation, transferring tasks to an employee who “drags for everyone” (and will only fulfill KPI in terms of the level of blockage of tasks and winding up ).
The best way: to revise business processes (namely, to revise, because in fact everyone has them, but in different states) → install in which to start collecting all indicators of operational work → automate business processes in CRM → implement KPI (it is better also in CRM so that indicators are calculated automatically, and employees can see their progress and understand what their KPI system consists of) → calculate KPI and wages automatically.
By the way, we have implemented all these steps in our RegionSoft CRM. See how we make simple and complex (advanced) KPIs. Of course, I know the functionality of not all CRMs in the world, but some pathetic 15-20 systems, but I can safely say that the mechanism is unique. Okay, enough boasting, we discuss the topic further.
Basic KPI setup
Advanced KPI setting
This is the kind of monitoring seen by employees of companies working in RegionSoft CRM. This convenient and visual dashboard allows you to evaluate the progress of your work and adjust your working day. The manager can also view the performance of all employees and change the tactics of work within the period, if necessary.
You can work great and not meet a single KPI
Basically, this is the scourge of perfectionist employees who bring their tasks to perfection and spend a lot of time on it. But the same story is characteristic of almost everyone: you can serve two clients perfectly, who will bring 2,5 million rubles each, but at the same time not meet any standard for service time. By the way, it is precisely “thanks” to such KPIs that we all often get unusable service from advertising platforms, advertising agencies, telecom operators and other companies “on the stream”: they have indicators that determine the premium, and it is more profitable for them to close the task than to get to the bottom of the solution Problems. And this is a very serious chain of errors, because the KPIs of the higher managers are tied to the KPIs of the lower ones and no one wants to listen to the request to adjust the scorecard. But in vain. If you are one of those, initiate a review, because sooner or later the pursuit of premiums and coefficients will result in a wave of customer complaints (which, of course, has its own KPI) and everything will be much more unpleasant and harder to fix.
It is for this reason that it is better to set several types of KPIs, for example, a plan by the number of tickets (customers), by revenue, by revenue per client, etc. Thus, it will be possible to see which part of the work brings in the most income, which part sags and why (for example, chronic failure to meet the plan for new customers can indicate both weak marketing and weak sales, here are other reports to help you - such as a sales profile for a period and a sales funnel).
KPI is a summing up of the period, not total control
KPI is never control at all. If your employees fill out daily/weekly sheets, where they indicate how long each task took, then this is not a KPI. If your employees rate each other on a -2 to +2 scale, that's not a KPI. By the way, this is not control either, because all tasks and their time are written from the bulldozer, anyhow spread 8 hours, and the assessments for colleagues are given something like this: “oh, Vasya and Gosha drank beer with me, funny boys, +2 to them” , “tolerant Masha did 4 big tasks for me, but she had such a crooked face, so be it, I’ll put 0, I’ll have mercy, not -2.”
KPI is only an assessment of the achievement or failure to achieve real measurable indicators that meet business goals. As soon as KPIs turn into a whip, they become a sham, because employees will only chase the most beautiful and “rich” figure, there will be no real work on other fronts.
KPIs shouldn't torment employees
It often happens like this: at the end of the month, large Excel files with 4-5 tabs are sent to employees, where they must write down their KPIs and fill in certain fields. Special type of torture:
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prescribe each of your tasks and give it a point score (purely psychologically arrogant loafers outperform self-critical modest ones);
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evaluate colleagues;
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assess the corporate spirit of the company;
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calculate your coefficient and, if it is much higher or lower than the average for previous periods, in the comment to the cell with the value, write an explanation why this happened (and “I worked well because the luck went” does not work) and a plan to fix the problem in the future (“I won’t work well anymore”).
I hope that now no one will perceive this real experience as a guide to action.
So, KPIs should be visible, accessible and transparent to employees, but employees should not lie when filling out tables, remember their tasks and restore completed volumes according to documents and contracts, independently calculate their indicators, etc. 2020 is a time worthy of automatic KPI calculation. Without automation, the KPI system can be not only unreliable, but even harmful, because erroneous real decisions will be made on the basis of fictitious numbers and scores.
KPI is not the whole system of motivation, but part of it
Perhaps this is the most common mistake - to consider KPI alone as the entire motivation system. Again, this is just a measure of performance. Yes, KPI includes elements of incentives and underlies employee bonuses, but the motivation system is always a combination of tangible and non-material incentives. This includes corporate culture, and the convenience of work, and relationships in the team, and career opportunities, and so on. Perhaps it is precisely because of the identification of these concepts that KPIs include indicators of corporate spirit and mutual assistance. This, of course, is wrong.
And now I will cause a rumble of discontent among readers, but the important difference between the motivation system and the KPI system is that motivation should be developed and implemented by HR specialists, and KPI is the task of the manager and heads of departments, who are well aware of both the business goals and the main metrics their achievements. If your company is building HR KPIs, your KPI will look like something like this:
Nice, but xs what is this and xs how to reproduce it
KPI must be justified, numbers from the ceiling will lead to conflicts
If you know that your employees on average release two updates per month, fix 500 bugs and sell to 200 customers, then the plan for 6 releases and 370 customers will be unrealistic - this is too much market share expansion and too much development load (bugs - something will also be about three times more). In the same way, you cannot set a high plan for revenue if the country is in deep stagnation, and your industry is among the most stagnant. Deep non-fulfillment of the plan demotivates employees, makes them doubt both themselves and the effectiveness of your management.
Therefore, KPIs should:
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align with business objectives;
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include in the calculation formula only metrics that actually exist and are recorded in the company;
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not contain subjective assessments and characteristics;
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reflect the vector of encouragement, not punishment;
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correlate with real values of indicators for several periods;
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grow slowly;
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change if goals or business processes have changed, legacy KPIs are hundreds of times worse than legacy code.
If employees are outraged by KPI and justifiably deny the possibility of meeting certain indicators, they should be listened to: often on the ground, some aspects of achieving the plan are much more noticeable than in the managerial chair (but this applies mainly to medium and large businesses).
If the KPI is inadequate, employees will sooner or later learn to adapt to it, and as a result, you will get fraud, or even outright fraud. So, for example, there are left connections for one passport with telecom operators or fake customer ratings with technical support. This does not bode well for business.
There are no ready-made templates for KPIs
On the Internet and from consultants, you can find offers for the sale of sets of ready-made KPIs. In 90% of cases, these are the same Excel files that I mentioned above, but they are essentially a plan-fact analysis for any company. They will not have those indicators that correspond to your goals and objectives. These files are just lead magnets for you to contact a consultant to develop a KPI system. Therefore, I strongly do not recommend that you take other people's templates and use them to calculate key performance indicators for your employees. In the end, that's why they are key, and not uniform and not universal.
Yes, the development of a KPI system takes time, but by doing it once, you will save yourself a lot of problems with employees and will be able to manage both a team in the office and remote employees in the same way.
There shouldn't be too many KPIs
Optimal - from 3 to 10. A large number of KPIs disperses the focus of employees on goals and reduces work efficiency. Particularly ineffective are insignificant, routine KPIs that are not tied to macro processes, but to the number of sheets of contracts, lines of texts, the number of characters, etc. (this thesis can be illustrated by the concept of “Hindu code” or “Glitch”, when in India in the mid-80s it was customary to pay programmers for the number of lines of code written. This led to the fact that the quality of the code suffered, it became noodle-like, object-oriented, with lots of bugs).
Some of the KPI indicators should relate to the individual work of an employee or department, and some should be integral, common to the entire company (for example, the number of bugs detected is an individual indicator, and revenue is the achievement of all departments as a whole). In this way, the correct goals of the company are broadcast to employees, and they realize that parity is established between individual and team work within the company.
Yes, there really are professions where it is difficult or impossible to apply KPI
First of all, these are creative specialties, developers, programmers, researchers, scientists, etc. It is difficult to measure their work by hours, lines, because this is highly intellectual work associated with a deep study of the details of the task, etc. Motivational KPI can be applied to such employees, for example, to reward them if the company has fulfilled the revenue plan, but individual coefficients for them are an extremely controversial and difficult decision.
To understand the real consequences of introducing KPIs for such specialties, look at the state of outpatient care in our country (and not only in ours). Since doctors had standards for examining a patient, filling out paperwork, and other valuable guidelines on how to behave with patients, public clinics have become a branch of hell. In this regard, private clinics turned out to be much more competent, which set KPIs, but at the same time allocate time for the patient with a margin, that is, they primarily work for the patient’s loyalty and even love for the clinic and specific doctors. And with this alignment, the plan for revenue and visits will be fulfilled by itself.
An employee comes to the company to exchange his knowledge and experience for money, and knowledge and experience should bring a certain result based on business goals. Setting KPI targets in front of him is not something bad, anti-loyal and scoundrel. On the contrary, with the competent development of a system of key indicators, the employee sees the direction in which he should move and can choose where his experience will be most applicable and his work effective.
Unfortunately, KPI is not the only entity that has been demonized and turned into a deterrent in the business environment. This is wrong, because KPI, like CRM, and ERP, and the Gantt chart are just a convenient tool for managing and communicating between employees and their managers. KPIs work great if they are smart. Therefore, everything is in your hands. Personally, I see an ideal combination of CRM, sales automation and automated KPI for small and medium-sized businesses. Now, in the conditions of COVID-economic uncertainty, this bundle is able to literally reconfigure the team and restart the business. And what would not?
Source: habr.com