KPI's as a Key Corporate Negative

We are all familiar with the concept of KPI’s – Key Performance Indicators.

Different organisations may have their own terminology for the setting of (usually) annual targets for individual employees, teams, departments, divisions and the overall organisation.

The intention is employees will strive to achieve KPI’s (targets) and the sum total of all employees’ outputs will result in the overall Corporate objective being achieved.

KPI’s are considered important, and even more so at the top end of the Corporate ladder. They are what is inevitably the illustration of success, or not.

So, why is it so many organisations find it impossible to actually announce their KPI’s for key staff in time for the start of the next measurement period?

Further, why is it that all too often, KPI’s are still not known 6 or more weeks after the start of the new period?

There tends to be three cohorts of employee.

The first is the group who are driven by their target. They plan their activity to ensure they meet the expected KPI and in many cases, plan to exceed the KPI in the hope their remuneration will be favourably impacted by way of bonus and/or salary reviews.

This cohort will track every element of their output and cross check their records against their employer’s regular reports. They will tend to be more confident in their own records and from my experience, they will inevitably be correct on occasions there is any disparity.

The next group are those who pay little or no attention and are not motivated or driven by a KPI. Their motive is often to do the best job they can and the results will take care of the rest.

The final group are those who care deeply about their personal results but pretend not to.

However, for all Groups, the failure to have KPI’s known until perhaps 6 or more weeks in to the new period causes frustration.

More so, it dilutes confidence in Management and the Corporate as a whole. Trust is also severely diluted as concern mounts as to if there is any real understanding of the Business and Market while fear grows of bad news pending, real or not.

Morale is negatively impacted and engagement is diminished.

In this era of ongoing Corporate Planning, detailed strategic objectives and finely tuned financial accounting models all supported by sophisticated data modelling software, you would think KPI’s would be finely tuned, readily available, presentable, understandable and viewed as relevant.

In short, it should be easier than ever to know in a timely manner what is required.

Timing issues aside, KPI’s also impact Corporate Behaviour and Culture, but that is a subject for another time.