PKF Carr & Stanton, Hastings, New Zealand
08 Jul 2016
By Michael Jackson - Director
According to research employee engagement begins when employees know what is expected of them at work, and us accountants love to put a metric on each role so that we know if things are working as they should and that everyone is contributing to the bottom line.
Typically, we advise clients to put in place Key Performance Indicators or KPIs to help clarify performance expectations for your functional teams and for every role in your business. Each functional area of your business should have a small handful of KPIs that drive the results or outcomes you seek. You should use them to measure the health and performance of your current operating model, or the things you do every day to create leads, make sales, provide your products and services, keep your customers happy, grow cash and make profits.
It is important to follow a process to create KPI’s
To keep things simple, you could identify your Metrics / KPIs by looking at the key elements of your current operating model and going through the following 4-step process:
What about KPIs for roles that are hard to quantify? If you find that after exploring best-practice metrics for the role in question, and after going through the 4-step process described above, and you are still struggling to come up with something worth counting, then I recommend you focus on closely managing that person’s Projects and Tasks instead.
Make sure the scope and deadlines for their Projects and Tasks are clearly documented and agreed up front so there is no ambiguity about what needs to be done and by when. Due dates should be realistically achievable, and not just based on an optimistic best-case scenario. As a manager, I’d rather have my team members give me a completion date I can count on rather than a “hoped for” date that we are unsure will be it.
Over time, you will be able to create reports every week that show what % of their Projects are on track, or what % of their Tasks get completed on time, as an overarching measure of their ability to scope their work effectively, and to keep to their commitments once made. In essence, you will be able to measure how well they "get things done".
As a business owner and manager, you only win when your team succeeds, and the process remains the same: You need to define what excellence looks like for each role, set goals (which could be KPIs and/or Projects) and then coach and support your people to achieve these goals.
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