What Are Key Performance Indicators?

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A key performance indicator (KPI) is a metric used to measure the success of an organization. They can be used to track and measure the progress of an organization's goals. KPIs can be simple or complex, but they all have one common goal: to provide information to help managers make informed decisions to meet the organization's strategic objectives.

There are many different types of KPIs, but the most common are financial, operational, and customer satisfaction. Financial KPIs track the financial performance of an organization, such as profits, revenue, and expenses. Operational KPIs measure how well an organization performs its critical tasks, such as turnaround times for customer orders or employee productivity. Customer satisfaction KPIs track how happy customers are with the service or product.

What Are Key Performance Indicators?

KPIs are a way to measure the success of an organization. They can be used to track and evaluate the performance of a company or organization in a variety of areas, such as financial, operational, customer service, and marketing. KPIs can also be used to measure progress and success over time.

Why Use KPIs? 

There are various reasons why businesses might want to use key performance indicators (KPIs). Some might use KPIs to measure the success of their operations, while others might use them as a way to track progress or make decisions about how to allocate resources.

Another important use for KPIs is measuring progress over time. By tracking key performance indicators, businesses can track their progress and identify areas where they need to improve. This information can help companies make informed decisions about their strategies and tactics.

Whatever the reasons, using KPIs is an important part of effective management.

How to Set Up KPIs 

There are a few things to keep in mind when setting up KPIs.

  • First, make sure that the metrics you are tracking are relevant to your business and reflect how you want your organization to perform.
  • Second, make sure that the data you collect is accurate and up-to-date.
  • Finally, make sure that the metrics you are using are easy to understand and communicate.

KPI Examples 

KPIs can track progress and identify areas where improvement is needed. There are many different types of KPI, but some common examples include customer satisfaction ratings, employee productivity levels, and sales volumes. 

By tracking these indicators over time, businesses can identify trends and make informed decisions about allocating resources.

Here are some of the KPIs used by businesses:

• Employee Productivity Levels

• Employee Satisfaction

• Sales Volume

• Turnaround Times

• Customer Acquisition Cost

• Customer Retention

• Inventory Levels

• Profit Margin

• Revenue Growth

• Employee Retention Rates

• Return On Investment

• Customer Loyalty Levels

• Market Share


Different sectors of the economy use some industry-specific KPIs and the typical business KPIs. Some examples of KPIs used in the healthcare environment include:

• Average length of stay at a hospital

• Hospital readmission rates

• The number of patients who had complications following surgery

• The percentage of patients who reported being satisfied with the care provided by the hospital

• Patient satisfaction scores

• Revenue per patient day

• Employee turnover rate


KPI Pitfalls 

Organizations should be aware of a few critical pitfalls when creating or using key performance indicators (KPIs).

  • First, KPIs should be relevant to the organization's goals and objectives.
  • Second, KPIs should be measurable and trackable.
  • Finally, KPIs should be regularly reviewed and updated to ensure that they are providing accurate and timely information.



Using key performance indicators (KPI) to manage your company effectively can provide valuable insights into how well your business is performing and whether it needs to change its strategy or tactics.

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