KEY PERFORMANCE INDICATOR (KPI)

What is KPI? A Key Performance Indicator (KPI) is the measure of performance of an activity that is critical to the success of an organization. As the say goes You cant control what you dont measure, by having a clear indication in the implementation and use, it brings profits or benefits that can be measured to the company and substantial difference between a company to another company. KPI is not necessarily the same with other; usually it is different and should be adjusted according to achievements, plan, objectives, or the vision of an individual or organization. From other reference, Key performance indicators (KPI) is a target quantitative management that measuring the process performance by setting, sampling, calculation and analysing the key input and output parameters of some process in the cooperation. This means that the identified KPIs can be created as a tool or objective perspective and a guide for the operation and performance of an enterprise management system. The important of KPI It is important to set up the clear, feasible KPI index system to manage performance well. Why it is important? Firstly, KPIs are great visual decision-making tools that are meat to prompt action when things have gone poorly, alert when performance is deteriorating, and motivate when everything is well. KPI has become a main measuring instrument or key reference point on the employer to obtain latest status of project or performers in the company. It is easy to determine whether the company in the healthy level or not. Second, KPIs are the way organizations can: Express strategy, objectives and define success. A KPI can describe a particular metric or describe an initiative. For example, an insurance company has set a revenue or the achievement of RM20 000 as an indicator by the end of May 2012. When a company has reached RM20 000 or more means they have reached the goal and success, if not, which means their performance is not satisfactory maybe because of the workers are less experienced, lack of communication skills or other factors. Therefore, the company can organize a workshop or training to enhance and improve the quality of performers and employees to achieve the indicator set.

In addition well-designed KPIs help organization spend more time on the important activities that drive performance and less time on activities that are not as relevant. This is because KPIs generally are the most important indicator of objective that want to achieve and the most valuable content in the organization. KPIs make the company more focus in the certain management to achievers toward the desired.

Reference
Jiang Z. Feng X.L, Feng X.Z & Shi J.F. 2011. School of Mechatronics Engineering: Journal of A Study Of The Demonstration On KPI Performance For Aviation Sp Enterprise Of XAC. Henan, China Albert Sthli. 2006. Management andragogics 2: Zurich Living Case. Springer Berlin Heidelberg New York Nils H. R, Nils R., Claire Y. C., Manish B. 2009. Business Dashboards: A Visual Catalog for Design and Deployment. John Wiley & Sons, Inc. USA. Bruno A. & Joey F. 2008. Drive Business Performance: Enabling a Culture of Intelligent Execution. John Wiley & Sons, Inc. Canada.