KPI Presentation Zaidi

10/18/2015

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Facilitator

Rupak M Nasrullah Zaidi Head of HR, Prime Finance

Emal: [email protected]

Cell: 01833332663, 01936000036

Concept & Practice: Performance

Made perfect communication / no gap in communication

Led people successfully Always took right decision in right time/ took some wrong decision

Managed people properly

Concept & Practice: Indicator Means: Measurement factor/ areas

Time factor: within this month/ this week/ year etc Quality / quantity standard: 10/15/ 0% error/ 1 % error/ 1 crore etc Cost Profitability Sales Volume Retention Engagement Learning

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Example of Indicator: Health

Blood Pressure Glucose Level Temperature Etc

WHAT Does KPI Mean?

KEY- (IMPORTANT / RELEVANT) PERFORMANCE- (DOING, Carrying Out, Executing) INDICATOR- (POINT OUT, TELL, SHOW)

Measuring Device

Sample Size= 100 Mean= 40.1 cm Average= 40.0 cm STD = .073 # Bad products = 4

Before 3 months Reduce Process Variation 5%.

Reduce QC reject 10%

by October.

Statements

Is There a KPI Here? Requirements / Limits

Analysis / Statistics

Result

XY=40.3cm

Consequences

Why every org need KPI

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Making KPIs work in your org

KPIs development should consider the correct balance of the three stakeholders

Making KPIs work in your organization

Create KPI culture

Decide on the right

KPI Framework

Develop Right KPIs

Analyze and Report

Making KPIs work in your org

As a starting point in developing KPIs, it is recommended to use the SMART concept : Specific Measurable Achievable Result-oriented or relevant Time-bound

Types of KPI

As per contribution type:

Strategic Operational

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Types of KPI

As per Area / stage of function:

Process Input Output Lagging Leading Outcome

Types of KPI

Process KPIs - measure the efficiency or productivity of a business process.

Examples - Days to deliver an order. Input KPIs - measure assets and resources invested in or used to generate business results.

Examples - Dollars spent on research and development, Funding for employee training, Quality of raw materials.

Output KPIs - measure the financial and nonfinancial results of business activities.

Examples - Revenues, Number of new customers acquired.

Leading KPI measure activities that have a significant effect on future performance.

Drive the performance of the outcome measure, being predictor of success or failure.

Lagging KPI is a type of indicator that reflect the success or failure after an event has been consumed.

Such as most financial KPIs, measure the output of past activity.

Outcome KPI - Reflects overall results or impact of the business activity in terms of generated benefits, as a quantification of performance.

Examples are customer retention, brand awareness.

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Qualitative KPI - A descriptive characteristic, an opinion, a property or a trait.

Examples are employee satisfaction through surveys which gives a qualitative report.

Quantitative KPI - A measurable characteristic, resulted by counting, adding, or averaging numbers. Quantitative data is most common in measurement and therefore forms the backbone of most KPIs.

Examples are Units per man-hour.

Types of KPI

As per measurement type:

Qualitative Quantitative

Types of KPI

As per Function [based on Balanced Scorecard:

Financial Internal Business Process/ Operational Customer Learning & Growth

A Balanced Scorecard Perspective on Performance

Obj

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H o w d o o u r c u s to m e rs s e e u s ?

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L E A R N IN G a n dG R O W T H

C a n w e c o n t in u e to im p r o v e a n d c re a te v a lu e ?

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H o w d o w e lo o k to s h a re h o ld e rs ?

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IN T E R N A L B U S IN E S SP R O C E S S

W h at m u s t w e e x c e l a t?

V is io na n d

S tra te g y

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H o w d o o u r c u s to m e rs s e e u s ?

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L E A R N IN G a n dG R O W T H

C a n w e c o n t in u e to im p r o v e a n d c re a te v a lu e ?

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IN T E R N A L B U S IN E S SP R O C E S S

W h at m u s t w e e x c e l a t?

V is io na n d

S tra te g y

V is io na n d

S tra te g y

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Measuring and

understanding your financial performance

Assessing Your Financial KPIs

Revenue & profit

Liquidity & cash

flow Share holder Value

Financial efficiency

Measuring and understanding your

operational performance

Assessing Your Operational KPIs

Efficiency & quality

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Measuring and Understanding Your

Customers

Assessing Your Customer KPIs

Customer satisfaction

& loyalty Market Share

Measuring and understanding your

employees

Assessing Your Employee KPIs

Employee engagement

Talent retention

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Measuring and understanding your internal processes

Quality Index

Process Downtime

Process completion time

Targets

Targets can be set as: Absolute: Such as increase by seven Proportional or percentage: Such as increase by 4%

Targets should be defined: Relative to internal benchmarks: Such as Surpass last

years results Relative to external benchmarks: Such as Surpass

competitor X Relative to global best practice: Such as Become as

good as X

KPI Mistakes

Knowing Where People Go Wrong with KPIs Measuring everything that walks and moves Collecting the same measures as everyone else Not choosing the relevant KPIs

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Developing Key Performance Questions (KPQs)

Essentially a KPQ is a management question that captures exactly what you need to know when it comes to each of your strategic objectives.

The rationale for KPQs is that they trigger a search for meaningful answers and focus your attention on what actually matters what you need to discuss to improve performance.

More importantly, they provide guidance for choosing the right performance indicators.

Example of Powerful KPQs

To what degree are our customers likely to recommend us to others? To what extent are we growing profit margins among our new customers? How well do we facilitate innovation in our culture? To what extent are we raising customer lifetime value? How engaged are our employees? To what extent do our project teams trust each other? How well are we communicating our strategy internally? To what extent are we growing market share in the South West region?

10 step process for developing KPI Step 1: Linking KPIs to strategic objectives Step 2: Identifying the unanswered questions Step 3: Isolating the decisions to take Step 4: Checking for existing data and methods Step 5: Collecting meaningful data in time Step 6: Assessing the usefulness to answering the question Step 7: Assessing the usefulness to decision-making Step 8: Creating awareness of cheating Step 9: Are the costs and effort justified? Step 10: Collecting the data

4 steps process for easy understanding

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Step#1: Randomly list down your job responsibilities . Step#2: Identify job responsibilities that are related with departmental Key Business Objectives (KBOs) Step#3: Develop KPIs against the identified responsibilities that are related with KBOs. [Value added activities which is strategic KPI] Step#4: Develop KPIs against the day-to day operational responsibilities. [which is Operational KPI]

KPI development process Employee Grades % of KBO related KPIs % of Operational KPIs

Director 100% Associate Director 90% 10% Assistant Director 70% 30% Manager 60% 40% Deputy Manager 50% 50% Assistant Manager 40% 60% Senior Executive 20% 80% Executive 10% 90%

Distribution of KPIs types

Use it or lose it: Turning KPIs Insight KPIs are only really useful when you turn them into insights that help

to steer your business and influence your decision-making. They are just pieces of information that help you to know more about

your business and whether you are on or off course against your strategic and operational objectives.

Unless you use the information they provide its just data, and data alone will not alter outcomes or improve your business.

Sum Up

Understand/ Meaning/ Define/ Concept of KPI How to design KPI Types of KPI How to Measure KPI How to utilize the information of KPI measurement

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Job Description Conduct Selection interview Ensure the right person for the right position at right time

Ensure the proper orientation and placement Ensure regular guidance Conduct Training for the employees Execute proper performance management system in the organization

Job Description Ensure employee retention Ensure proper output from every employee Assist (if required) to execute compensation program

Maintain employee database Analyze attendance report Maintain leave record

Template : KPI Table for HR Manager Template : KPI Table for HR Manager

Key result areas are the main goals that HR manager needs to accomplish. In this sample, we have four key result areas.

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Template : KPI Table for HR Manager

Key performance indicators are measurable indicators used to evaluate your performance level

Every Key Result Areas must have at least one KPI.

Total number of KPIs shoud be 8 10 items.


Weight of each KPI should be defined. Weight of KPI is determined based on the scale of priority. Total weight should be 100.

Template : KPI Table for HR Manager Targets are defined based on historical data and future expectations. Targets can be percentage, number, or score depending on the type of KPIs.


Actual is the actual results. Or target achievements. We should develop reporting system to capture these results.

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Formula to calculate score : Actual / Target x 100 (for KPI Maximize, the higher the better) or Target / Actual x 100 (KPI Minimize; the lower the better).


Formula to obtain Final Score = Score x Weight /100

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Final Score is used to determine bonus allocation, salary increase, and promotion.

Thanks for being with US

KPI Presentation Zaidi

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