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Key Performance Indicator (KPI)

What Is a Key Performance Indicator (KPI)?

A Key Performance Indicator (KPI) is a measurable value that reflects how effectively an individual, team, or organisation is achieving specific business objectives. KPIs provide a clear, data‑driven way to track progress, set targets, and gauge success over time.

Detailed Explanation

KPIs focus on critical performance areas—such as revenue growth, customer satisfaction, task completion rates, or time to hire. Organisations define KPIs based on strategic goals and use them to monitor outcomes consistently. The best KPIs are SMART: Specific, Measurable, Achievable, Relevant, and Time-bound. Whether tracked monthly, quarterly, or annually, they help teams stay aligned and focused on what matters most.

Use in HR or Business Context

KPIs are used by HR departments to assess programs like employee engagement, training efficacy, turnover rates, and recruitment efficiency. In order to improve customer service, product delivery, or strategic programs, leaders also establish KPIs. Sharing KPIs transparently helps individuals understand expectations and supports collaborative progress tracking across teams.

Why It Matters Today

KPIs drive decision-making, aid in strategy adaptation, and provide empirical support for investments in today's rapidly changing business environment. When teams use the right indicators, organisations become more agile, accountable, and focused. Strong KPIs reduce guesswork and boost confidence that efforts align with broader goals—making them essential for growth, performance, and trust.