What Are The Key Performance Indicators?

For those who don’t know, the kpi definition means key performance indicators. Usually, KPIs measure the performance of the systems, processes and so on and it can be detailed as much as desired. The measuring of an action it is very important because it helps you continuously improve the faulty sources and it helps you with the control of the situation.

The time period chosen should be the same in order to make comparison between values. Some KPIs have fixed values- maximum, minimum or average, while others are left free, namely without default values, but they all are monitored and their evolution is going to be compared. Depending on your needs, you can define any KPI provided you observe the following rules: they must be simple, they must be easily measurable, they must be reached, they must be real and accurate and they need to be understood.

Not accidentally accessing the famous search engine “Google” with the query “key performance indicators”, there will appear over 28.6 million references displayed in less than 0.28 seconds. These indicators or key performance indicators, commonly known as KPI, show various acceptable and are interpreted differently by users. To set the correct expectations about performance indicators, it requires a first discussion on the link between the target- performance indicators - information - indicator.

Not everything that can be measured is such an indicator. There is information- such as a number of bills, scrap, employees and so on- that should not necessarily be considered as indicators of performance and sometimes serving only as the quantification of a given situation, having no comparative or predictive purposes. Monitoring a large number of KPIs can give a more precise performance of that process but can also generate high monitoring costs. In practice, choose a reasonable number of 5-10 KPI that will be tracked for a certain period of time.

KPIs respond to different questions: “Where are we?”, “Where we want to go?”, “How do we do that?”, providing information about the current status, market comparisons, target for the future. You can get a good kpi definition of them if you analyze the word itself. Therefore, it requires a good selection of KPI as being those indicators that: K = provide competitive advantage linked to the strategic objectives of operation of the business unit directly; P = are directly related to performance, clearly measurable, with predetermined causes of influence; I = ensure comparability from various references, oriented towards future corrections and do not explain historical events,

If you ask yourself “What are the five main KPI’s most widely used by companies? Why?”, you should know that there is no universally valid answer to these questions. Usually, the performance indicators can be found in the measurement of three elements: activity, profitability and productivity. Measuring productivity is interdependence between the two sets of data, measured as one of the data sets vary from each other.


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Keywords: kpi definition; key performance indicators

By: johnssmith00

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