A performance indicator is a kind of performance measurement, which measures the achievements of an organization or specific activities where it is engaged. Management performance indicators plays a major role both at individual and organizational levels. With performance indicators it is easy for manager to identify how the organization is achieving various goals (Challis, 2017). Besides, they show the organizational basic concepts of the project and strengthen the project tasks within the administrative divisions. Performance indicator can also be said to be a quantified metric reflecting how the stated goals and objectives of the organization get achieved in the process.
Performance indicator is key for the success of any organizations. It aligns the individual employees on a daily basis driving the towards achieving the set objectives in the business. It provides the visibility required in every organization besides providing a clear accountability in relation to the set performance index of the company or rather organization. It also helps in the documentation of individual performance required to support compensation and career planning in an organization. Besides documenting the individual performances, it also documents the organizations finances for legal purposes and through this, decision-making becomes easy and disputes reduced.
Performance indicators have a very mighty impact on the success and profitability of an organization at large. It is the mantle of any organization and its impact is felt both by the community and the workers (Challis, 2017). The first impact of performance indicator is that it ensures all the employees in the organization are turned to a level where their goals and objectives as employees are same to that of an organization. Performance index also impacts positively on the employees where it makes the employees deliver their best to the organization hence leading to a success. It makes the organization achieve their targets set at the beginning making every member of the organization feel even more motivated towards achieving more.
An example of performance indicator is the service quality. This type of performance indicator tries to gauge the quality of services provided by the employees (Parmenter, 2015). This type of indicator is one of the most important ones in the business since it makes the organization aware of if they are producing quality goods or services and through this, the organization is able to determine its fate. This indicator will impact on the organization when the organizations wants to know if the services they are providing really satisfies the intended targets or not. It impacts on the organization either positively or negative regarding the status of goods or services provide. This kind of performance indicator has no specific formula but several techniques can be applied to come up with a tangible evidence showing the quality of services or goods provided. Administrators can use questions administered to the consumers of the service or goods produced and from the comments on the questionnaires, the administrators will be able to know the quality of services or goods they produce (Parmenter, 2015). Other methods like interview can also be used depending on the effectivity.
In summary performance indicator is kind of tool used by an organization to keep their visions and missions set straight in to the minds of both employees and the administrators. It keeps the organization live and running and through it, the organization is able to determine if they are on the right direction towards achieving the intended purpose.
Challis, David, and Paul Clarkson. Performance indicators in social care for older people. Routledge, 2017.
Parmenter, D. (2015). Key performance indicators: developing, implementing, and using winning KPIs. John Wiley & Sons.