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Setting KPIs for your team and how to get the best results
Assuming you feel you have the right people in place in your organisation and you’ve followed our guidance on how to create a winning team, the next step is to make sure that team, and all the individual members, stay on track.
So how do you do that?
In our experience, the most effective way of keeping your business moving in the right direction is to set objectives and the means by which they will be measured. These are also known as key performance indicators (KPIs).
You’ll find that many businesses have over-arching KPIs, which might be to hit a certain level of turnover in that financial year, to achieve 25% growth, or to secure X number of new clients. But for those targets to be achieved and for your business to succeed, you’ll need everyone in the team to play their part – and that’s where team and individual KPIs come in.
What to consider when setting KPIs
Team and individual KPIs should be seen as the means by which your overall business objectives will be achieved. So, for example, what does Paul in the sales team need to do for his part to ensure the business as a whole secures 200 new clients that year? It could be that Paul should secure 20 of those, so one of his KPIs might be to win two new clients per month.
KPIs should serve to motivate your employees and give them something to work towards that is challenging, yet achievable – there’s nothing worse than ridiculous sales targets that no-one can hit. This will only serve to make people feel demotivated and demoralised.
You can involve your employees in the discussion about KPIs at the time they are set to make sure they understand them and feel they are fair and realistic; they may be aware of external factors that you haven’t considered which need taking into account.
Be prepared to review and adjust KPIs as needed due to outside influences such as seasonal peaks and troughs which can have an impact.
KPIs need to be simple and easily quantifiable. So, it could be things like a certain number of clients gained in a month, number of sales, number of appointments booked, number of satisfied customers, or other more subjective responses to surveys, for example.
You may need to adjust your KPIs for different employees depending on the person and their circumstances. They should be set on an individual basis, rather than being the same across the board. For example, you wouldn’t expect a part-time member of staff to carry out as many appointments in a week as a full-timer, just as you shouldn’t require a junior or an apprentice to make the same amount of sales as your longest-serving and most experienced senior salesperson.
Key benefits of key performance indicators
If executed correctly, KPIs can be incredibly beneficial to your business success. If you’ve set them together with the employees and teams concerned, it means everyone knows what is expected of them and how they can achieve in their role.
It can be incredibly motivating for everyone to know what they have to do to help ensure the team’s success as part of a real team effort.
KPIs also enable you to ensure that everything is working towards your overall business objectives and means you can measure that performance and progress. This in turn will help you to identify if something is not working and enable you to adjust your strategy accordingly.
However, there are two things you must do to ensure your KPI system works and that is to reward success where it’s due – so give incentives and treats for when those KPIs are achieved and equally you must be prepared to act when KPIs are not being achieved (without a good reason). Without these, the KPIs will have no meaning and will soon be forgotten.
If you need help setting KPIs for your team, contact Action Coach.
