10/18/2015

Facilitator

Rupak M Nasrullah Zaidi

Head of HR, Prime Finance
Emal: rmnaidi@gmail.com
Cell: 01833332663, 01936000036

Concept & Practice: Performance

Concept & Practice: Indicator

Made perfect communication / no gap in

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

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

WHAT Does KPI Mean?

Blood Pressure
Glucose Level
Temperature
Etc

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

Is There a KPI
Here?

Measuring Device

Requirements / Limits

Why every org need KPI

Result

XY=40.3cm

Statements

Analysis / Statistics

Sample Size= 100

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

Consequences

Before 3 months
Reduce Process
Variation 5%.
Reduce QC reject 10%
by October.

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Making KPIs work in your org

Making KPIs work in your organization

KPIs development should consider the correct balance of the three

stakeholders

Create KPI
culture

Decide on
the right
KPI
Framework

Develop
Right KPIs

Making KPIs work in your org

Types of KPI

As a starting point in developing KPIs, it is

recommended to use the SMART concept :

As per contribution type:

Specific
Measurable
Achievable
Result-oriented or relevant
Time-bound

Analyze
and Report

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.

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.

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.

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

A Balanced Scorecard Perspective on Performance

Initiatives

Targets

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

Initiatives

Targets

Measures

Initiatives

L E A R N IN G a nd
GROW TH

Targets

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

Objective

IN T E R N A L B U S I N E S S
PRO CESS
V is io n
and
S tra te g y

Measures

Initiatives

Targets

H ow do ou r
c u s to m e r s
see us?

Measures

CUSTOM ER

Objective

Financial
Internal Business Process/ Operational
Customer
Learning & Growth

Objective

As per Function [based on Balanced Scorecard:

Measures

F IN A N C I A L
H ow do w e
lo o k t o
s h a r e h o ld e r s ?

Objective

Types of KPI

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Assessing Your Financial KPIs

Measuring and
understanding your
financial performance

Revenue
& profit
Liquidity
& cash
flow
Share
holder
Value
Financial
efficiency

Assessing Your Operational KPIs

Measuring and
understanding your
operational
performance

Efficiency &
quality

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Assessing Your Customer KPIs

Measuring and
Understanding Your
Customers

Customer
satisfaction
& loyalty

Market Share

Assessing Your Employee KPIs

Measuring and
understanding your
employees

Employee
engagement
Talent
retention

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Measuring and
understanding your
internal processes

Quality Index
Process Downtime
Process completion time

Targets

KPI Mistakes
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

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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KPI development process

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]

Distribution of KPIs types

Employee Grades

% of KBO related KPIs

% of Operational KPIs

Director
Associate Director

100%
90%

10%

Assistant Director

70%

30%

Manager
Deputy Manager

60%
50%

40%
50%

Assistant Manager

40%

60%

Senior Executive

20%

80%

Executive

10%

90%

Use it or lose it: Turning KPIs Insight

Sum Up

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.

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

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

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

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.

Template : KPI Table for HR Manager

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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Template : KPI Table for HR Manager

Template : KPI Table for HR Manager

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).

Template : KPI Table for HR Manager

Template : KPI Table for HR Manager

Formula to obtain Final Score

= Score x Weight /100

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10/18/2015

Template : KPI Table for HR Manager

Thanks for being with US

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

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