What are goals and KPIs?
Goals are the longer-term targets that a team member is expected to achieve over a period of months or a year. KPIs are the daily, weekly, or monthly targets that a team member must consistently achieve in order to achieve their goals. While KPIs can just be a breakdown of a goal into smaller time periods (i.e. yearly target into a monthly target), they can be used to measure all sorts of things that impact success.
Example:
A sales person has a goal of selling 1,200 widgets a year. We know the end goal, but what does success look like on a daily, weekly or monthly basis? You can break the yearly goal of 1,200 widgets down into a weekly or monthly target, but you can also measure other things that are critical to success. You could look at:
- How many meetings do they need to make a sale?
- How many calls do they need to make in order to book a meeting?
If you set a KPI based on the number of calls the sales person needs to make each day, you know that their performance against that KPI will predict their future success - less calls made today equals less meetings (and ultimately less sales) in the future.
Process:
- Set goals - Set the long-term target that needs to be achieved. When setting goals ensure that they adhere to the SMART criteria (see below).
- Determine the key areas that lead to success - What needs to happen in order for that goal to be achieved?
- Define the KPIs - Define what needs to be achieved in that particular area and over what time period (i.e. daily, weekly, monthly, quarterly). Just remember that the shorter the measurement period, the quicker you can take corrective action if need be.
The SMART criteria
Goals needs to be specific, measurable, achievable, relevant and time-bound.
- Specific - Specific goals have a much greater chance of being accomplished compared to general ones. General goals allow too much flexibility and steer you off course.
- Measurable - How will you know if a goal has been successful? Measurement provides a way to track progress and keep motivation levels high. To determine if a goal is measurable, you should ask: How much? How many? By when?
- Achievable - Is the goal within the team's control and influence? Is it achievable with the available resources and within the timeframe? A goal should be challenging and stretch the team's capabilities but still be feasible. Goals that are too hard (or impossible) cause people to become disheartened.
- Relevant - Does the goal help the organisation achieve its strategic objectives? The goals that your team are striving to achieve should be aligned with what the organisation is trying to achieve. Make sure that your goals are aligned to the goals above you.
- Time-bound - Is the goal grounded with a timeframe (i.e. a deadline)? Timeframes create a sense of urgency and provide a fixed point to measure progress against.
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