Why are KPIs so important for companies?

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Organizational performance management aims to direct all the efforts of the organization towards its objectives. In this way, the effectiveness of all the activities of the company aligned with the macro objective of the organization is sought.

Within this perspective, the importance of performance indicators is observed, also known as KPI (Key Performance Indicator). These facilitate the transmission of the mission and vision of the company to all collaborators, and direct their efforts towards the strategic objectives of the organization.

Since it is common, but not healthy, that in the work environment, several employees are unaware of the importance of their activities and do not see the impact they have on the bottom line of the company. KPIs are characterized by being a tool to measure the performance of the sectors in a quantifiable way, seeking to understand whether the objectives are being achieved and the need to adopt corrective measures.

Organizational performance scholars highlight some characteristics that a good performance indicator should have. These are some of them:

Relevant and high impact: the indicator must have direct relevance to the business;
Understandable and simple, so that all employees can understand it and understand its importance;
Balanced: the KPI must find the balance to satisfy the needs in the short and long term;
Temporal: its measurement must allow follow-up and corrective action, so it is interesting that it is measured daily, weekly, monthly, varying with need;

Benefits of KPI’s in a company

The development of good KPIs allows the company to measure its performance and identify where its internal problems lie, making it possible to improve its operations. the rest:

Increase the efficiency of the sectors
Help in decision making
They boost sales and even reduce costs, among other benefits.

For this reason, it is very important that organizations develop good indicators that convey their importance to employees.

So now that you’ve learned about KPIs, are you ready to take your marketing strategies to the next level?

Know us! We are a high performance online company in Mexico with offices in Brazil and the United States.

Source: Administrators