What do kpi indicators mean? How to implement a KPI system in your company. Advantages of the KPI system

The KPI (Key Performance Indicator) indicator came to us along with American and Western European companies, where it has been successfully used for several decades. KPI is a tool that helps analyze the effectiveness of certain activities, as well as the level of achievement of set goals.

Research shows that about 80% of Russian top managers are dissatisfied with the performance assessment systems existing in their companies. Using existing algorithms, they don't see connections between plans, execution, results and motivation. The introduction of KPIs helps to completely change the picture. KPIs allow you to monitor the business activity of employees, departments and the company as a whole and take the enterprise to a new level.

In Russia, KPI is usually translated as a key performance indicator. In fact, this is not entirely true. It would be more correct to call him "key performance indicator", since the English word performance includes not only the concept of efficiency, but also the concept of effectiveness. Despite the apparent similarity of these terms, they have a significant difference:

Efficiency expresses the relationship between the results achieved and the resources expended and determines the company’s ability to implement its goals and plans with a given quality level, expressed by certain requirements: time, costs, degree of goal achievement.
Efficiency is the ability of an enterprise focus on results(degree of achievement of planned results).

Thus, KPI in the meaning of “key performance indicator” is more voluminous and contains both the degree of achievement of the result and the costs of obtaining it.

You can use performance indicators in various areas of activity, for example, if you want, you can use metrics such as the number of clients and the average check amount.
The same indicators are suitable for assessing the activities of a hairdressing salon. You can read more about opening a hairdressing salon.

Why do you need KPI?

As for the practical application of KPI, this indicator is introduced at enterprises in order to conveniently measure the performance of the company as a whole, individual departments and employees directly, as well as motivate staff to achieve the required results.

Using these indicators, you can create, if not perfect, then very effective motivation and incentive system company employees.

Of course, their use makes sense mainly for those workers whose work most affects the financial and economic performance of the enterprise. In insurance companies these are primarily agents, in trading companies - sales managers, and in recruiting offices - personnel selection consultants. KPIs are also used to determine the performance of administrative and managerial personnel.

Key performance indicators can be divided into:

lagging– reflect the results of activities at the end of the period. These include financial indicators that show potential, but do not convey the current performance of departments and the company as a whole;
operational (advanced)– make it possible to manage the situation within the reporting period in order to achieve specified results after its expiration. They talk about the current situation in the company, while simultaneously showing what cash flows may be in the future, and also demonstrate the quality of processes and products and the degree of customer satisfaction.

By type, key indicators can be as follows:

KPI result– show the quantity and quality of the result.
Cost KPI– show the resources spent.
Operational KPIs– relate to indicators of the execution of business processes and allow one to assess how well the process corresponds to the required algorithm for its execution.
Performance KPIs– derived indicators that characterize the relationship between the result obtained and the time spent to obtain it.
Efficiency KPIs(efficiency indicators) are also derived indicators that characterize the ratio of the result obtained to the expenditure of resources.

Key indicators are needed not only by the company’s management - they are also more convenient for the employees themselves, especially those whose income directly depends on the results of their work. KPI allows company employees to easily calculate the steps needed to achieve the desired result.

For example, in the insurance industry, especially in European and American companies, where such a system has long proven itself and is used everywhere, KPIs allow you to increase the number of sales due to transparency and a clear understanding of the required actions actions that the employee must take.

You can use KPIs in any business related to sales. For example, when selling flowers. Read on and start your own flower business.

The KPI system can be used to motivate clothing store salespeople using performance metrics such as the number of sales. Read about how to open a clothing store from scratch and how much it costs.

Performance evaluation also finds application in the service sector. By following this link you can find information about opening a real estate agency and learn how to start a real estate business.

Examples of using KPIs in business

Direct sales companies mainly use performance KPIs that show the ratio of cold calls, meetings with clients to the number of sales.

An insurance consultant (or sales manager), using key indicators adopted by the company, sees a clear picture of his activity. He understands that in order to reach the planned income, he needs to sell a certain number of policies (products), having previously made a certain number of meetings and calls. The standard KPI for life insurance newbies is considered to be 1/10, that is, to make one sale, you need to have 10 meetings, and for each meeting there are an average of 10 calls.

As an example of key indicators for a sales manager, you can also cite the following options: “the number of new clients is not less than …”, “sales volume is not less than …”, “the size of the average contract for a client is within …” and so on. This is another type of indicator – KPI result.

Such KPIs are personal, and there should not be too many of them for each employee. Three to five are enough; the main thing is that they are clearly stated and easily measurable. An example for a sales department or a company as a whole could be the key performance indicator “average revenue per client” included in the strategic goal “Increase average revenue per client from 25 rubles to 30 rubles for 2014.”

In addition to stimulating and motivating employees, KPIs are used by the manager as a tool for analyzing the activities of subordinates, helping to clearly see at what stage of work his employee is failing.

If we again take the sales manager as an example, then key indicators allow the head of the sales department to identify problem areas: does the manager make enough calls and meetings, does he have a large client base, etc. If the indicators are met, and the required number of sales no, it means that the quality of work of this employee suffers: lack of skills, knowledge, perseverance, etc.

All these moments easily tracked by KPIs, therefore, all activities of sales departments in successful companies engaged in active sales are mainly based on the use of this indicator.

The types of indicators and their quantitative values depend both on the direction of the enterprise’s activities and on its strategy, therefore they can take different values in different companies.

Today, many companies are trying to force their employees to work according to the KPI system ( Key Performance Indicators- key performance indicators). What are the monetary pros and cons of KPIs?

The goal is the same, the tasks are different

KPI is a system of indicators with which employers evaluate their employees. It has much in common with the conventional planned approach. With one major difference: the performance indicators of each individual employee are tied to the general KPIs of the entire company (such as profit, profitability or capitalization). The purpose of the system is to ensure that the actions of employees from different services are not contradictory and do not slow down the work of specialists from other departments. Everyone contributes to the common cause, works to achieve their goals and, as a result, receives bonuses for their implementation.

Working on KPIs allows specialists to better understand what they need to do to be effective. “Efficiency” refers not only to the amount of work done per unit of time, but also to the benefit received by the company from the employee’s activities.

In each department, the company’s general KPIs are “split” into smaller, personal ones. There should not be many key indicators for each. Three to five clearly defined KPIs are enough. The main thing is that each of them can be easily measured. An example of indicators from one of the sales managers: “sales volume is not less than...”, “the number of new clients is not less than...”, “the size of the average contract for a client is within...”, “the level of English knowledge is not less than.. ."

Measure of result

In large Western companies, where everything is spelled out and detailed to the maximum, working according to the KPI system is a good option for employees. The specialist understands how much, for what and when he will receive extra salary. And what is included in his salary. Clear, documented information about what the employer expects from you makes your job much easier. Each employee has personal tasks and deadlines for their completion, and the company regularly monitors his work using assessments.

In many companies, in addition to monthly monitoring, the results of all KPIs are taken as the basis for an annual assessment of staff performance. After the annual assessment, the HR Directorate compiles lists of the most promising specialists to include them in the company's personnel reserve and promote them to positions.

But if the “head office” helps foreigners in developing goals, then domestic employers act differently in determining the goals and objectives of their specialists. Some invite consultants, others manage on their own: the goals are prescribed by the HR directorate. Since neither the first nor the second know the specifics of the work of each specific specialist, it happens that the indicators are formulated inaccurately.

At the end, the employee is faced with the fact that his KPIs turn out to be impossible to achieve. Or, on the contrary, such a system allows a specialist to find legal “loopholes” so as not to strain too much. The IT director of the industrial holding, Alexander, recalls that before the implementation of KPI, the “sysadmins” subordinate to him solved user problems “on the first call.” Now, when calls like “Help! Computer froze!" they react “in a bourgeois way.” They demand that you write a request with the essence of the problem and pass it on to the senior “sysadmin”. It is then queued for execution. “Yes, I could do it in three minutes, but it won’t be recorded anywhere. Why should I care about the difficulties of other employees and departments? They will evaluate me based on the KPIs that I am motivated to achieve.”

Plus bonus

The described system is good for employees whose work results most affect the financial and economic performance of the enterprise. In trading companies these are, first of all, top managers and sales managers, in recruiting offices - personnel selection consultants.

Communications manager Elena says that in her company, the achievement of goals by an employee also affects the individual size of the annual salary review: the higher the rating, the higher the percentage of salary growth. “Managers' annual bonus consists of two variables, which depend on the achievement of individual goals and on the achievement of company performance indicators. This approach encourages better performance of functional duties.

For employees from different departments, the size of the bonus, which is influenced by KPI, can range from 20% to 100% of the salary.

At the same time, the formula for calculating the bonus itself is quite complex: it takes into account the number of KPIs, the rate of completion of each of them, as well as its “weight,” that is, the coefficient of influence (the more important the indicator for the company, the higher the “weight”).

If the KPI scale is not compiled correctly, there will be little result from it. For example, if there are too many KPIs, the impact of each on the size of the overall bonus will be small. Economist Lyudmila says that at first she had about 20 KPIs, but after a year they were reduced to five. “Most of the indicators accounted for a small portion of the bonus, and for me the loss of 5% in the bonus was not particularly significant. A 20% KPI weight motivates much more effectively,” she admits.

Disadvantages of the system

One of the main disadvantages of KPIs is that if a department performs poorly, all its employees can lose their salaries at once. After all, personal KPIs are linked to key indicators of the entire department. If targets are systematically not achieved, the employee may be demoted. Therefore, KPI forces you to always be in shape. Those who cannot withstand this rhythm leave on their own.

The disadvantages of working in a key indicator system include the fact that not all employees can directly influence the company’s strategic KPIs. If the bonus depends on net profit and sales, it is unlikely that a secretary or economist sitting in the office will be able to influence it.

Very often in Ukrainian companies, the KPI motivation system is “one-sided”: everything that an employee exceeds is simply a job well done, for which he receives a salary, and for under-fulfillment he is deprived of some part of the salary. Or another option: a system of key indicators is being implemented, but there is no link to the employee motivation program.

It is easier to describe the work of technical specialists (accountants, engineers, programmers) with a job description. And choosing a fair “line” for them is very difficult.

And further. It must be taken into account that planning and KPI calculations take time. The head of the logistics department of a transport company, Roman, is dissatisfied that the introduction of this system resulted in additional hours of work for him. “Now, at the end of each month, I have to spend time setting and calculating KPIs for all my subordinates. All indicators must be agreed upon with the HR Directorate. At the same time, they don’t pay me extra for calculating the size of bonuses,” he complains.

The transition to a KPI system is usually accompanied by unrest among employees: some “quietly sabotage” the innovation, others do not accept it completely and leave the company. It is difficult to immediately change your habits, the order of performing functions, and get used to new conditions of remuneration.

Former regional manager of a confectionery company Andrei recalls that when he was given the goal of “selling not a lot of cheap candies, but a lot of expensive ones,” he had to change a lot in his work. The lack of understanding of the innovation by the team and partners was a hindrance. While he was retraining his subordinates, some people left. And when he negotiated with retail chains, based on the company’s new goals, he was forced to agree to more stringent conditions.

A KPI-based motivation system is a unique and convenient option for increasing labor efficiency. If your company strives to increase or at least maintain key indicators (sales volume, number of customers), as well as to minimize errors on the part of employees, then everything must be done to eliminate the formal approach of employees to performing duties. To do this, you need to find a tool to motivate staff so that work performance is directly related to the amount of remuneration.

Developing key performance indicators (KPIs) is difficult, but absolutely worthwhile work that will lead the company to achieve its goals. Of course, this will only happen if the calculation is made correctly. It is important to focus on those indicators that will truly affect the development of the company, and not waste additional resources.

Motivation is a fairly simple concept. Figuratively speaking, this is a “locomotive” that pulls a person in one direction or another. Each of us may have a certain reaction to a stimulus. The stimulus does not have to be sudden and short-lived. It can be absolutely anything, the main thing is that its presence evokes a conscious desire to act in the necessary way. By offering an employee a reward for a certain type of behavior, the employer will be able to achieve specific results. Motivation varies. Money can be considered universal. Of course, there are also non-monetary motivations. But it only acts as an addition to the main one.

Goals of motivational systems

In general, we have already determined what exactly motivation is needed for. Let's look at an example with KPIs. A properly developed system of such motivation will allow:

Encourage employees to work for a specific result (predetermined).
Make sure that the company functions as a single organism and the work of all departments is aimed at obtaining specific indicators that together increase the efficiency of the organization as a whole.
Reward those employees who are hardworking and efficient.
Make performance evaluation transparent - if each employee is aware of how his bonus is calculated, this will reduce the level of his anxiety for his future and allow the employee to motivate himself independently (internal, conscious motivation to receive a reward, in order to improve his standard of living, acquire the necessary etc.).

As a result, by spending some time developing the right motivation system, you can achieve excellent results in a short time.

Stages of developing a motivational system

Conventionally, we can distinguish 4 stages of developing motivation. This process is not so simple and requires a lot of intellectual effort and competent analysis of the current situation in the company on the part of the developer.

1st stage. Analysis of the current situation.

As you know, in order to achieve a certain result, we need to determine what exactly we are striving for. Only in this case does it make sense to predict a “happy future”. So, at the first stage it is necessary to analyze the current state of affairs: the market situation, the position of the company, its profit, sales volume and other indicators that will influence the success and efficiency of its functioning. After the analysis, it is necessary to determine the immediate goals. It is advisable to express them in specific indicators. Only in this case will you be able to determine which indicators should grow and to what level.

2nd stage. Calculations.

At the second stage, you need to take into account all the finances that you plan to spend on personnel in the coming year (you can make calculations for the next six months). These expenses will include all expected payments: wages, sick leave, vacation pay, as well as those funds that will be withheld from the company’s budget to ensure the efficiency (ability to perform their functions) of each employee. In order to properly build a motivation system in the future, it is necessary to divide the staff into effective and auxiliary. We will call effective the personnel on whom the company's profit depends; support staff - people who influence the work of the company, but are not directly related to profit. It is also important to make a second division: into management and subordinates.

3rd stage. Development of a motivational system and its implementation.

A motivation system is developed for each department/division, in accordance with the goals of a particular branch in the structure of the organization. Once you have developed a trial incentive system, it needs to be formally implemented and communicated to employees. Changes must be made to employment contracts and additional agreements. It is important to understand that a timely modernization system will help overcome any crisis. It will save the company from bankruptcy and allow it to achieve its intended goal. It all depends on professionalism and understanding that at the moment the company needs changes.

4th stage. Job analysis.

This stage is perhaps one of the most important, since it allows you to analyze how effectively the system works. It should allow you to monitor not only short-term, but also long-term performance indicators of the organization, increase the enthusiasm of employees and their personal effectiveness (relatively speaking, the professionalism and loyalty of employees to a given company should increase), effectively manage the budget and not waste additional time on calculating payments.

Three levels of performance indicators

What performance indicators are there? What can you rely on when developing KPIs? Let's start with objective indicators that every company or branch has. These include: production volume, sales volume, profitability and net profit, which is generated in connection with the functioning of production or the company.

As a rule, using these indicators in the motivation system, real data is compared with those that were planned for a certain reporting period (usually a month, in some cases a quarter). Such indicators are used in the system of motivation of administrative and managerial personnel, which influences the progress of affairs in the company. This level can be called the first (high). It is these indicators that are of interest to management, and they are the result of the work of the entire company. But it is necessary to stimulate not only those who supervise the activities of employees, but also the personnel themselves, who participate in specific auxiliary operations and work directly in production.

Let's consider the second level of performance indicators. These are, first of all, indicators of production efficiency, on which the total volume of production ultimately depends. Here we look at the work of specific workshops, laboratories, and technical services. KPI evaluates production volume, deadlines for completing work and its quality. The second level of motivation also applies to departments that are responsible for selling manufactured products: warehouse department, marketing department, sales department. In this case, sales volume will be assessed and accounts receivable will be taken into account. In general, these two levels could be limited if not for the work of auxiliary departments, without which the functioning of the entire company system is impossible.

The third level of indicators is assessed in relation to departments that help ensure the functioning of the company: accounting and legal departments, the work of system administrators, human resources services, the security department and the office. Motivation depends on what exactly is required from employees. As a rule, in this case, high-quality and timely performance of duties and assigned tasks is taken into account.

Calculation formula

As you know, remuneration = fixed part of the salary + bonus part.

Premium part (KPI) = KPI1 + KPI2 + KPI3.

This formula is conditional. The weight of each of the three (or other number) indicators is equal to its significance. You can establish any relationship between these indicators. Let's take the service industry as an example.

Suppose you are the owner of an online store and, in particular, you are developing a motivation system for contact center employees who advise customers over the phone and help place orders. What indicators can be included in their non-fixed part of remuneration? Depends on the result we are going to.

For example, it is most important for you to retain all existing customers and preferably to find new ones. If retention is a priority, then you need to focus on quality customer service and information. What does it consist of? For a call center operator this is: no errors when placing an order + polite communication with customers + correct advice regarding an existing product (its cost, characteristics, promotions). Consequently, all these indicators can become components of the operator’s KPI. The fourth indicator could be the sale of a particular product to a new client (the more new clients, the higher the premium).

What will influence the premium more significantly? You decide. For example, you can make a valid customer complaint about rude communication invalidate all other metrics. Thus, an operator who sold a product to new clients, correctly described its characteristics, placed an order correctly, but was rude to the client, for which he received negative feedback (and as a result, the loss of this client), may lose the entire premium or part of it. In this case, you need to find the right balance and choose the main vector for each division. There can be many options. The main thing is to correct them and make amendments in a timely manner.

Key Performance Indicator (KPI) is an indicator of an organization’s performance that helps the company achieve strategic and tactical goals.

KPI is one of the tools that can be used to analyze how effectively staff works to achieve company goals.

Using key performance indicators, the organization has the opportunity to manage the process and make changes to it, as well as set goals for staff and motivate the company's employees to achieve their goals.

What is KPI for?

The objectives of KPI include stimulating employees and motivating them to achieve planned results.

Types of KPIs

There are several types of KPIs in connection with the following performance results:

cost item – the volume of resources expended in monetary terms;

productivity item – percentage of utilization of the involved capacities;

efficiency item - indicators characterizing the ratio of one indicator to another (for example, the ratio of revenue to costs);

the results item is a quantitative expression of the result of the company’s activities.

Also, key performance indicators can be divided into two types - operational and strategic.

Operational indicators are used in the current activities of the enterprise and its divisions. Operational indicators allow a company to set goals and objectives depending on changing conditions.

Operational indicators include indicators characterizing the efficiency of production organization, volumes of supply of raw materials, and quality of manufactured products.

Strategic indicators reflect the results of the enterprise's activities for the current period. Strategic indicators enable the company to adjust plans for the next period. Strategic indicators are used, for example, in the analysis of cash flows, on the basis of which the main strategic indicators of the company are calculated.

Strategic indicators include indicators of the enterprise’s performance (for example, profitability).

Rules and principles for implementing KPIs

The rules and principles for implementing KPIs are as follows:

Rule "10/80/10". This means that the company should have about 10 key performance indicators, up to 80 operational indicators and 10 key performance indicators;

The principle of controllability and controllability. The department responsible for a certain indicator must be allocated the necessary resources to manage it, and the result obtained can be monitored;

The principle of partnership. Successful performance improvement requires the establishment of effective partnerships between all stakeholders;

The principle of transferring efforts to the main directions. To increase labor productivity, it is necessary to expand the powers of the organization’s employees, personnel, conduct training, and effectively interact between the company’s divisions;

The principle of integrating the processes of performance measurement, reporting and performance improvement. An integrated performance measurement and reporting scheme should be created that encourages specific actions by company employees. To do this, meetings should be held regularly, the timing of which depends on the complexity of the issues being resolved;

The principle of coordinating production indicators with strategy. Performance indicators should be tied to the current success factors that make up the balanced scorecard and consistent with the organization's strategic goals.

Benefits of KPIs

The main advantages of using KPIs include:

employee motivation;

fairness, transparency and comparability of results (it becomes clear to management and staff which employees of the enterprise work how much and how much they earn);

adjusting the employee’s work based on low performance indicators;

participation of personnel in achieving the organization’s goals;

quality control of performance of duties.

Thus, the advantage of a KPI system is that it is active based on calculated comparable indicators.

Key performance indicators in sales

Key performance indicators in sales are calculated based on the following indicators:

revenue from sales;

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Today, there are practically no company executives who have never used KPI performance indicators. The abbreviation that everyone knows stands for “Key Performance Indicators”, which means “key performance indicators”. In the Russian environment, KPIs are interpreted a little differently, measuring the efficiency of an enterprise, which is essentially no different from the original interpretation.

Main questions of the article:

What is KPI indicator?
Main KPI indicators
Application of KPIs in practice
Examples of KPI indicators

What is KPI?

KPI is a set of indicators by which the performance of a company, department or individual is assessed. Such indicators, comparing the assigned tasks with the results obtained, assess how far certain goals have been achieved.

Main characteristics assessed by KPI indicators:

productive result is what the enterprise’s activities are aimed at, i.e. net profit received, volumes of products sold, sales revenue, volumes of products produced, market share occupied by the enterprise, number of clients acquired, their positive reviews, image, etc.;
indirect effect - results that are unfavorable for the company: debts, excessive staff turnover, etc.;
resource costs – all costs incurred by production;
time costs – the amount of time spent on tasks;
an objective assessment of the productive effect (useful) is the main KPI indicator characterizing efficiency; all other indicators evaluate effectiveness. This indicator is calculated by relating the productive result (beneficial effect) to the sum of all costs (resource and time).

Video on the topic: how to correctly determine KPI

Main KPI indicators

Most often, KPI indicators are used by large retail chains that own a huge number of branches. It is easier for the head office management team to evaluate the company’s performance in one plane, using a set of specific indicators. On the basis of which it is easy to track this or that trend. In medium and small businesses, the use of the KPI indicator system is more complex in terms of assessment, but is nevertheless quite often used.

Each manager has the right to choose the required number of KPI indicators independently. The main criterion in choosing is the ease of calculating values. It is also important to remember that the selected indicator must fully analyze the outcome of the activity.

Among the indicators used to analyze performance, the most commonly used are:

sales volume indicator - cash receipts from goods sold are analyzed;
staff turnover rate is the % ratio of the number of hired and dismissed employees for a certain period;
indicator of service standards - % expression of secret assessment of service quality.

Depending on the goals of the analysis, the scope of activity, and the specifics of the company’s work, the indicators may be different.

Application of KPIs in practice

There are several basic methods for using the most optimal list of KPI indicators. However, many years of practice have brought out the main rule “10/80/10”, where:

10 is the number of key indicators for assessing the result obtained;
80 is the number of indicators that evaluate production activities (operational);
10 is the number of indicators by which performance is assessed.

It is worth understanding that the main principle of using a KPI system is the ability to manage and control the receipt of the necessary results, i.e. the company, department or individual employee entrusted with the implementation of KPI analysis must have all the authority to influence the progress of obtaining the indicators necessary for further KPI analysis.

There are also several other principles that greatly facilitate the KPI analysis process:

the principle of partnership - you need to understand that in order to obtain the most positive result of any activity, the cohesive work of the entire company is necessary, from management to service personnel;
improvement principle – the essence of this principle is that the company’s management needs to be ready to train the team, conduct a program to improve the skills of some employees, etc. to achieve the desired result;
the principle of increasing responsibility - this principle implies that by introducing KPI analysis it is possible to increase the independence of employees with regard to making management decisions;
the principle of compliance with the analysis strategy and the obtained indicators - the goal of the principle is to obtain optimal results of KPI analysis that meet the basic requirements of the strategy for analyzing performance indicators.

Examples of KPI indicators

When implementing a system for analyzing KPI performance indicators, management often wonders how exactly KPI is calculated. You can come up with a whole list of indicators, but you need to remember that each indicator must identify a specific goal of the analysis. To develop an effective KPI analysis system for employees, it is necessary first of all to start from the tasks and functions that are their job responsibilities. For example, the effectiveness of a Sales Manager can be assessed by the number of closed transactions, customer reviews of the manager’s work, etc.

There are several conditions for conducting KPI analysis (applies to any business structure):

A certain number of criteria for assessing effectiveness (no more than 10 parameters, the most optimal is 5).
Logic. None of the criteria should contradict or neutralize the other.
Monitoring the implementation of KPI analysis tasks.

KPIs of company management and subordinates

By and large, the system of KPI indicators for management and subordinate personnel is the same. The main thing is that the selected indicators meet the following requirements:

measurability;
specifics;
realism;
consistency;
certainty in time.

The main “pros” and “cons” of using KPI indicators in enterprise practice

Conducting an analysis of KPI performance indicators in a company has both positive and negative sides.

The advantages of KPI analysis include:

the result of KPI implementation, as a rule, is greater motivation of employees to conscientiously perform their production tasks and functions;
each employee of the company receives a specific list of required results;
employees can clearly assess their contribution to achieving the company’s goals;
management always has up-to-date information about the work of each employee, which increases quality control over the employee’s performance of official duties.

The main disadvantages include:

sometimes it happens that the low productivity of a department leaves a negative imprint on the high productivity of a particular employee, as a result the employee may quit without receiving a proper assessment of his work;
not all employees receive financial incentives as a result of achieving their goals. For example, administrative staff will remain out of work if the purpose of the analysis was to increase net profit, they simply will not have the opportunity to prove themselves;
Sometimes, the result of KPI analysis is the so-called reverse motivation. Those. Instead of rewards for achieved results, employees receive nothing, while those who do not correct the task are fined or punished.

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