A performance indicator is a kind of performance measurement that measures the achievements of an organization or specific activities in which it is engaged. Management performance indicators play a major role both at individual and organizational levels. With performance indicators, it is easy for managers to identify how the organization is achieving various goals (Challis, 2017). Besides, they show the basic organizational concepts of the project and strengthen the project tasks within the administrative divisions. Performance indicators can also be quantified metrics reflecting how the stated goals and objectives of the organization are achieved in the process.
Performance indicators are key to the success of any organization. It aligns the individual employees on a daily basis, driving them towards achieving the set objectives in the business. It provides the visibility required in every organization, as well as clear accountability in relation to the set performance index of the company or 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 organization’s finances for legal purposes, and through this, decision-making becomes easy, and disputes are 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 by both the community and the workers (Challis, 2017). The first impact of performance indicators is that they ensure all the employees in the organization are turned to a level where their goals and objectives as employees are the same as those of an organization. The performance index also positively impacts the employees, allowing them to deliver their best to the organization and, hence, leading to success. It makes the organization achieve its targets set at the beginning, making every member of the organization feel even more motivated towards achieving more.
An example of a performance indicator is 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 whether they are producing quality goods or services, and through this, the organization is able to determine its fate. This indicator will impact the organization when the organization wants to know if the services they are providing really satisfy the intended targets or not. It impacts the organization either positively or negatively regarding the status of goods or services provided. This kind of performance indicator has no specific formula, but several techniques can be applied to come up with 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 the services or goods they produce (Parmenter, 2015). Other methods, such as interviews, can also be used depending on their effectiveness.
In summary, performance indicators are a kind of tool used by an organization to keep its visions and missions set straight into the minds of both employees and administrators. It keeps the organization alive and running, and through it, the organization is able to determine if they are in the right direction towards achieving the intended purpose.
References
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.
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