Key Performance Indicators (KPIs) have been used extensively to evaluate the performance and to decide on the eventual rewards accorded to employees, thus it has a strong influence in shaping behaviours and attitudes of employees. It is important to ensure that the KPIs set have the following characteristics to ensure the right behaviours and outcomes prevail.
- Have a combination of “hard” and “soft” KPIs
It is important to strike the right balance of having both outcome-specific “hard” KPIs and behaviour-specific “soft” KPIs. The hard KPIs provide clarity to the goals, e.g. a cost-saving target, while the soft KPIs emphasise the acceptable ways to achieve the goals, e.g. through teamwork.
- Incorporate organisational values
Organisational values define the principles or standards of behaviour in the organisation, thus incorporating them as part of KPI measurement can be an effective way to shape the desired organisational culture.
- Build behavioural indicators
For greater clarity and transparency to everyone in the organisation, it is important to provide the right descriptions for the right behaviours, which are also known as behavioural indicators. This is to enable objective evaluation of the behavioural KPIs in the organisation.