I don’t really quite understand the gist of this concept, and I want to understand it as simply as possible. Can someone explain this with a few examples, specifically in Human Resource (Recruitment) if possible?
Thanks!
I don’t really quite understand the gist of this concept, and I want to understand it as simply as possible. Can someone explain this with a few examples, specifically in Human Resource (Recruitment) if possible?
Thanks!
Comments
Indicators – Thing that’s show some information.
Performance – Measure of how well something is happening.
Key – More important than others.
KPI- Very important things that show how someone is doing at a thing
It is simply a measurement about which general success within an organisation can be measured. Normally it is expanded to include indirect things that contribute to revenue or profit generation.
So, often it is very simple, like “how much revenue and profit did we make this week?” but could get into “how many customers in the shop were approached within 2 minutes of entering?”
For recruitment, you might have “how many jobs did we find a successful applicant for this month?” or “what percentage of people we directed to a job posting completed at least, the application, 1 interview stage, selection centre, etc?”
You work in recruitment. Last year you hired a bunch of people. Great work! This year we want you to keep hiring people, and we want to see if you can improve your performance so ideally we’d like to see you hire more people than you did last year.
Your KPI will be the number of people you recruit.
If you beat your recruitment numbers from last year, you will have reached your KPI target and we’ll give you a raise.
Your colleague is specialized in employee onboarding and retention. His target this year will be to reduce employee turnover, so his KPI will be to keep departures lower than last year.
It’s any statistic that measures how some aspect of a business is performing. If you’re in HR recruitment, it might be something like the average cost to recruit a new employee, time to fill an open position, or employee satisfaction based on annual survey results.
They are measurements (or “metrics”) of things that people in the business decide are meaningful indicators of whether things are going well or not. They can be pretty much anything, but each department or field or specialty or industry will tend to focus on different ones.
For recruitment, it might be something like retention rate, or cost to hire.
For sales, it might be number of new customers. For manufacturing, it might be the defect rate, or the cost of production per unit.
The idea is to collect some meaningful numbers so that when you look at them together, you get a quick sense of whether things are going well or not, and you know what to look at more closely if not.
They’re just metrics that the business thinks are useful to follow. For HR, headcount, broken out by department, would be a useful one to follow. As would be overtime hours worked for the period. And for ones more specific to recruitment, if the company is large enough, it may want to track new hires, job offers placed, and terminations separately.
A KPI is a metric that helps define success.
You are a recruiter. You want to measure the success of your recruitment work. Maybe you figure you can do this by tracking the number of successful hires, or the number of incoming resumes. That way, over time, you can see changes in those metrics to determine if your work has been effective or not.
Things that your manager can check to see how well you are doing at your job.
Example – your job is to call customers with outstanding bills & get them to pay.
Your performance indicator might be “Called X number of customers” or “Collected $X in outstanding payments”.
Then when your manager comes to check how well you are doing, they can look and see that last month you collected $1000 and this month you collected $5000. It gives your manager a (somewhat) objective measure to describe how good you are at the job.
Like everyone else has mentioned they’re simply what their name suggets. They are pieces of information that indicate positive and negative trends regardinging important aspects of business.
In my role, I host a monthly KPI meeting required by a regulatory body for MFG, ISO. Per ISO, and to maintain our certification with them we must track, discuss, and attempt to improve these figures. So we discuss them during the meeting, challenges, positive news, whatever is relevant to the department and the number or figure they provide to me. We also create action items for the responsible department lead to follow up on if any one of our KPI doesn’t meet a specific goal we have for that month/year etc.
These KPIs include, Trailing 12 Month Turnover Rate, On Time Delivery, Past Due Payments our Customers have not submitted to us, Safety, Part Failures and Overtime costs and so on.
Simply they want to measure your performance. Performance like things are hard to measure. So they are using what ever they can measure or count. From HR perspective it might be number of hired candidates that you have submitted from your preliminary elimination. Because they can count the applications and hired persons.
It’s generally bullshit. Because in general it impacts the real performers in negative way. Because peoples priorities change to improve this numbers.
KPIs are the measures of how well you are doing your job, or how well a department or company is operating. KPIs don’t have to be personal, but most relevant to you are your personal KPIs because those dictate when you get fired, or promoted or is a pay raise is in your future or not. Your KPIs are whatever indicators your bosses decide indicate the performance of your job, check with them to make sure you understand what they are so you can maximize them.
Say someone gives you money to beat their kid mercilessly with jumper cables. However, you get paid based on how well you beat them. Now, you get paid by the hour so one must gauge your performance. But there should be some metrics to assess the same. One metric could be linked to productivity e. g. number of lashes per minute: a higher number will attract a higher payout but a lower number may lower the payout or, worse, allow their child to post on Reddit. Another could be linked to efficiency, like intensity of screams per lash. There could be one or more such indicators based on which a pre-agreed reward will be offered. Hope this helps.
Literally just a statistic that everyone agrees is very important and can be looked at for overall success.
In a shop it might be product sold, in an online game it might be active users, or just money spent.
The idea is it’s a few things that you can look at as a whole for a quick “Are things getting better or worse”
If you were reviewing a hole diggers’ work (someone who you’ve hired to dig holes) some of the key performance indicators might be as follows:
How many holes per hour?
How many holes per day?
How many holes per week?
How deep are the holes?
Are there piles of dirt left beside or hauled away?
Do you need two people to dig the number of holes that you were hoping to have?
All of these from its indicators would help you manage your hole digger to get the best bang for your buck.
They are the key stats related to a job/department… usually things like revenue, leads, conversion rate, return on ad spend, etc.
For HR, I’d guess something tied to filling roles in a timely manner, number of qualified applicants per position, employee satisfaction/retention.
It’s a list that you should accomplish so managers know that you’re doing what they told you to do.
They’re basically grades/marks, just like in school.
For example, in recruitment, one KPI may be “100 candidates reaching final interview stage in one month”.
Got 100? You performed. 100? You performed well. 50? You underperformed.
What do those marks mean? Well it can affect your advancement/promotion, your raise, and whether you need to be moved elsewhere or managed out, or fired.
Technically, they’re the measurable factors most strongly correlated with the success of a company.
But practically speaking, they’re anything you can measure, which you can argue is correlated to success. When business people realize they’re unable to judge the relative effectiveness of one group or individual vs. another (or can’t trust their middle management to make such judgements), they look for measurements and numbers to make the judgements for them in an “objective” way.
What’s their attendance record? How many calls per hour do they field? How have customers rated them in surveys? How many sub-tasks do they complete per week? What’s their on-time delivery rate?
Some specific to recruitment might be: What’s the employee turn-over rate? How many of your recruits leave the company within a year? What’s the average salary your recruits are accepting? How many cold calls do you make per day? What’s the hire rate of candidates you bring to on-site interviews?
The good side of KPIs is that the company is being very explicit about exactly how you will be evaluated, allowing you to focus on producing objective, undeniable numbers.
The bad side is that they encourage employees to game the system. Show up for a partial day when you’re sick. Get customers off the phone to increase the number of calls you field. Tell customers you’re likely to be fired if you don’t get a top rating. Break projects into smaller sub-tasks so you can complete more of them. Deliver unfinished product so as to meet deadlines.
Over use of KPIs can sometimes kill efficiency, and make employees feel bad about themselves either because they know they’re getting worse at their jobs, or because their effectiveness is officially not recognized.