Why Key Performance Indicators (KPI) are important to your business?

Key performance indicators (KPI) tells us the health of the business and shows us what steps are possible to make the business healthier. They complete the business cycle. As the business grows, proves their concept and customers come back, the the KPIs shows who or what is driving the business.

Characteristics of KPI

You can classify KPIs into three main parts. The quantitative KPIs, the practical KPIs, and the Actionable KPIs. All three of these have a significant role to play in the workplace.


The quantitative KPIs are those indicators that can be presented in numbers. These usually include the number of employees engaged, sales numbers, sales volume, etc.


The practical KPIs are the typical performance indicators that you can’t express in numbers. They’re quite common around all office spaces. These are the types of key performance indicators that deal with different business or company processes.


The last type is the actionable KPIs. You’ve probably seen how managers incorporate the employees into different practical activities. They indirectly test the employees and determine what they’ve been doing or how they’ve been handling specific projects. The entire process makes it easy for the KPIs to be placed in an experimental setup.


Before you start setting up KPIs you need to go through a couple of guidelines. These may vary from company to company. But the basics stay the same nonetheless.

Start by measuring what you’ve been doing. Try to find out which of the different factors helped you establish a solid base. This will help with the groundwork of building a reliable KPI tracking system.

Make the KPIs as straightforward as possible. I cannot stress this enough. The last thing you want is for your employees to prioritize something useless that won’t add any value to the company.

Keeping the basics similar will help you out quite a bit. For example, you can figure out a way to solve any disruption by referring to other companies’ similar situations. 

Importance of KPIs

So why are key performance indicators important? KPIs can significantly boost up employee morale. You can easily strive harder to accomplish your objectives when you’re assessing the key performance indicators. If your employees are committed to personal growth, you can expect them to love incorporating KPI into the workflow.

Whether you work in HR or not, you need to establish some ground rules. Evaluating employee performance is critical. Especially when you’re concerned about performance management, you can set a standard by putting key performance indicators in place.

Strengthening Morale

The first and most important reason to put KPIs in place is to boost employee morale. You can significantly change the whole environment of the office if you set key performance indicators in place. Depending on the culture of your workplace, this will have different effects. And you’ll have to deal with all of them specifically.

If you build your team or employees around a motivating culture, you’ll see high gains in the long run. If you establish a culture committed to making the office environment better, you can surely expect a more productive workforce.

Remember to keep track of the KPIs and keep tabs on them. Try and take notes when necessary. You can’t just sit back and relax. You’ve got to get out there and start your assessments indirectly. When your employees find out that their performances will be evaluated through KPI, you’ll know that your plan is working.

On the other hand, you can see the employees becoming more dedicated and committed to the work. They’ll tend to work harder and come out on top. When there’s competition among the employees to reach the top spot, you’ll see mindboggling results.

Performance Management

Here’s the next reason as to why key performance indicators are essential. If you don’t know this already, many factors come into play when evaluating employees’ performance. Some of the most common factors include culture, morale, and capacity. Managing all of these together can get quite hectic. So if you have a KPI tracking system in place (whether it’s automatic or manual), you can significantly simplify the entire process. 

The gradual quarterly performance evaluations are helpful. But they aren’t perfect. You can put KPI in place alongside those evaluations to make the system significantly better. With KPI tracking, the employees can compare their results with the other employees and assess themselves.

No one would like to whip up some bad numbers when it comes to KPI. So all the employees remain engaged in their respective jobs and work with utmost dedication. You can witness a fundamental change in the workplace by introducing KPI. Keeping track of KPI can also increase employee accountability. 

KPI for Personal Growth

You might not think about this at all, but the key performance indicators can come in quite handy for the employees’ respective personal growth. The employees will eventually start taking everything as a learning process. When they start getting praises based on their KPI, they’ll continue to work harder and come out on top. 

If you put KPIs in place, the work teams can see their performance held in front of them. Something you can try and implement is “Real-Time KPI Tracking” in your office. This makes your workforce more competitive, and in the long run, more sustainable. You can observe a pretty significant growth in the overall revenue when you keep this going successfully. 

Try hanging a dashboard that lets everyone see their performances. This will undeniably make the employees work harder. When an employee reaches the set benchmarks, the sense of relief will make them come at ease. If you care about your employees’ personal growth, you can try tracking KPI in real-time. 

Here’s Why KPI Matters

If you’re hell-bent on improving your workplace’s overall performance, and eventually, the company, you probably can’t come up with a better idea than tracking KPIs. 

Not everyone will value all the KPIs. Some employees would focus on just one field and try to work their magic. You can monitor the company’s health in real-time with KPIs. 

If you’re someone who loves working with patterns, then KPIs will have you covered. You can analyze different patterns of different departments of your company with KPI tracking. And if you have a real-time KPI in place, you can make adjustments as you go without having to wait for the quarterly results.

You can tackle many situations in a much better and well-organized way when you’re continuously referring to the KPI dashboard. This will undoubtedly speed up your workflow and keep you and your employees always on schedule. 

Monitoring Company Health with KPIs

If you’re a casual sports fan, you’re probably familiar with the idea of a scorecard. Well, you can call KPI the scorecard of a business. You don’t need to go overboard with hundreds of KPIs. A handful will do just fine when you’re willing to keep track of your company’s health.

So how do you know which one to focus on?

That’s pretty easy to find out. You have to set a specific goal for a period. There are also a few categories of KPI. You can measure that for your employees, the customers, the revenues, and the processes involved in the decision making systems in your company.

A lot of departments have to work together to keep all of these functions to perform smoothly. You can develop a handful of KPIs if you think about customer satisfaction, HR, strategies, and business processes. Don’t just pick any KPI that sounds cool. It would help if you found out which one would suit your company in the best way.

Measuring Long Term Progress

We’ve already discussed business patterns. If a manager can successfully implement the KPI tracking system, then they will see fabulous long term results. You might not get to witness the best changes immediately, but you can expect a rise in revenue, employee morale, and better customer service ratings in the long run.

Keep track of employees, sales, revenue, gross margin, and the number of locations. If you’ve got all this covered, you should be good to go. You can even map out your plans for the following next years by referring to your KPI dashboard and employee performance. 

Staying on Track

One of the most significant things to look out for when you’re managing is whether your employees are on track. This is quite hard to evaluate with high levels of procrastinating employees. 

But if you keep track of the KPIs, they’ll delightfully keep track of their progress too. When you’re trying to meet those deadlines, you have to ensure that the employees are working with a steady flow. Some employees tend to leave everything for the end. 

They end up facing immense pressure when they have all the work stacked up. If you put up a dashboard with real-time KPIs, the employees will start working with higher dedication levels. They’ll also begin to take their work more seriously compared to before. 


If your business is focusing on creating KPIs and following through with the process then you will see a positive result. More will get done and your employees will be more motivated. Period.

Do you want to chat about how you can implement KPIs into your business? If so, then let’s shoot me a message and we can brainstorm about it!