KPIs (Key Performance Indiators) Managers Need to Know
Key Performance Indicators, or KPIs, are a way to track the performance of employees. They are quantifiable measures that project managers use to guide their project through and ensure the company’s success. KPIs are usually pre-determined. Sometimes, however, companies make mistakes by trying to measure everyone’s performance or adopting a set that everyone else uses, instead of choosing the one that suits their project.
KPI management requires serious thought before it can be used.
The Essential KPIs that Matter
These are the KPIs every project manager should know. There are several categories for the project KPI framework.
KPIs for measuring customers and understanding their needs
Customer Profitability Score: This KPI helps you understand the profits that each customer brings to your business. After subtracting all costs associated with marketing and advertising, these profits are calculated.
Customer retention rate: This is a measure of how many customers your business has retained for any product or service. It answers questions like: Will they come back for more? Are they loyal to your brand? If yes, how strong is that loyalty?
Relative market share: This metric allows you to compare the market share of your business and that of your competitors. Based on the results, you may need to take further steps.
KPIs for Measuring Employees & Understanding Them Employee Engagement Level: This measures how engaged employees in a project are and how their engagement levels relate to the business goals. This KPI shows how much employees are contributing to the company and how they are affecting it.
Human Value Capital Added (HCVA),: This metric calculates financial value that individual employees add to a company’s business.
360-degree Feedback Score:Feedback in any project is important. This KPI allows project managers to keep track of the same. They can also evaluate how their co-workers rate them.
The Absenteeism Bradford Factor is a tool that project managers use to calculate the damage that the unauthorised absence of their staff members is doing to the business.
KPIs for measuring and evaluating financial performance
Net Profit: This KPI calculates your net profit by subtracting all expenses.
Revenue Growth Rate: This helps project managers calculate how much their company’s income increases.
Operating Profit Margin: This is the result of dividing the operating income by the revenue. This provides another way to measure a company’s profitability accurately.
Return on Investment (ROI). Every company invests a certain amount in its projects. This KPI measures how much revenue is generated from the money invested.
KPIs to Measure Internal Processes
Project Schedule Variance (PSV:It allows one to keep track of whether projects are completed on time or not.
Delivery in full, on-time (DIFOT) rate: Project managers can track the number of customer orders delivered on time and in full. This KPI allows them to keep track of all customer orders.
Quality Index: This is an important KPI for any project. It evaluates the quality all the se