Key Performance Indicators: Functional Areas Essay

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Updated: Jan 20th, 2024

Table of Contents

Introduction
Conclusion
Reference List

Introduction

Key performance indicators (KPI) are measures by which the organization can judge its most critical aspects of organizational performance, and subsequently choose how to increase this performance (Star et al. 2016, p. 151). KPIs are non-financial, they are frequently measured, decided by the CEO and the higher-level management, require an understanding by the staff, provide responsibility, can significantly impact the organization, and have a positive effect on other measures. This paper will provide a table of functional areas and the KPIs that apply to them (Parmenter, p. 101).

Table: functional areas and the KPIs.

Functional Area	KPIs
Human Resources	Training hours per employee in a year, percent of employees that participate in career coaching programs, percent of employees that leave the company in a year, differences in performance before and after training.
Marketing	The number of leads gained over some time, the response time of the sales team, percent of impressions that lead to sales, the performance of online marketing, the size of the potential audience for marketing opportunities.
Customer Service	Customer support team response time, customer satisfaction score, net promoter score (likelihood of recommendation), customer retention rate, employee engagement level.
Finance	The number of working days to finish month-end operations, the number of debtor days, the number of days after the terms have passed, percent of expenses in comparison to budget.
Information Technology	Number of days to deliver a project in comparison to the deadline, percent of expenses in comparison to budget, the number of calls handled by the team, mean time to repair equipment.
Operation	Percentage of available work hours compared to actual hours spent, percent of schedule variance, percent of complete project delivery on time, the frequency of reworking, the number of complaints.

Conclusion

A variety of KPIs exists throughout different functional areas. Although KPIs are often misinterpreted, they play a crucial role in any organization. By properly utilizing them, an organization can significantly increase its output.

Reference List

Parmenter, D 2015, Key performance indicators: developing, implementing, and using winning KPIs, John Wiley & Sons, Hoboken. Web.

Star, S, Russ-Eft, D, Braverman, M, & Levine, R 2016, ‘Performance measurement and performance indicators’, Human Resource Development Review, vol.15, no. 2, pp. 151-181. Web.

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