How to Use KPI to Foster Competition

Fostering Competition

KPIs, or key performance indicators, are commonly used to measure efficiency within organizations. This is especially the case with manufacturing companies. KPIs provide a way for managers and employees to measure process performance and therefore process improvements. These can also help motivate a friendly competition among employees and staff.

Instructions

1. Determine the three most important processes in your organization. They should all be directly related to the bottom line, your organizational mission and/or customer service. Use a flow chart to map out the processes from end to end.

2. Ask each employee to create personal goals around these three processes.

3. Determine a common denominator among the three major processes. The most common denominator is usually money or time as these are commonly associated with increased efficiency.

4. Ask each employee to create a KPI (metric) around the common denominator. Common KPIs (metrics) may be widgets per hour or errors per sale. Each KPI must be tied to at least one of the three major processes.

5. Set goals for each metric and offer awards for those who meet goals. Report on goal attainment often and make all accolades public. If possible, link KPI goal attainment to compensation.

References

• Investopedia: KPI