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EFFECTIVE KPIS: 6 
COMMON PROBLEMS IN 
TARGET SETTING 
Based on 
http://www.bscdesigner.com/6-problems-in-target-setting.h...
PERFORMANCE 
MANAGEMENT IS BASED 
HEAVILY IN KPIS
PERFORMANCE MANAGEMENT IS 
BSC DESIGNER 
BASED HEAVILY IN KPIS 
• It’s one of the most difficult tasks for any 
manager.
PERFORMANCE MANAGEMENT IS 
BSC DESIGNER 
BASED HEAVILY IN KPIS 
• It’s one of the most difficult tasks for any 
manager. 
...
PERFORMANCE MANAGEMENT IS 
BSC DESIGNER 
BASED HEAVILY IN KPIS 
• It’s one of the most difficult tasks for any 
manager. 
...
CLEAR OBJECTIVES HELP 
TRACKING POSITIVE 
CHANGE
CLEAR OBJECTIVES HELP TRACKING 
BSC DESIGNER 
POSITIVE CHANGE 
6 
problems 
in target 
setting
6 PROBLEMS IN TARGET SETTING 
BSC DESIGNER 
1 
Goals based 
on the wrong 
performance 
measures
6 PROBLEMS IN TARGET SETTING 
BSC DESIGNER 
2 
Goals are 
based on 
past 
performance
6 PROBLEMS IN TARGET SETTING 
3 Unrealistic 
expectations 
BSC DESIGNER
6 PROBLEMS IN TARGET SETTING 
BSC DESIGNER 
4 
Placing all 
expectations 
on financial 
goals
6 PROBLEMS IN TARGET SETTING 
BSC DESIGNER 
5 
Using 
ineffective 
data analysis 
programs
6 PROBLEMS IN TARGET SETTING 
BSC DESIGNER 
6 
No 
agreement 
on action 
plans
CLEAR OBJECTIVES HELP TRACKING 
BSC DESIGNER 
POSITIVE CHANGE 
• It goes without saying that without clearly 
defined KPIs...
CLEAR OBJECTIVES HELP TRACKING 
BSC DESIGNER 
POSITIVE CHANGE 
• It goes without saying that without clearly 
defined KPIs...
CLEAR OBJECTIVES HELP TRACKING 
BSC DESIGNER 
POSITIVE CHANGE 
• The only way to reach these goals, other than 
what’s bee...
CLEAR OBJECTIVES HELP TRACKING 
BSC DESIGNER 
POSITIVE CHANGE 
• The only way to reach these goals, other than 
what’s bee...
AN EMPLOYEE’S 
EXPECTATIONS MIRROR 
THE STRATEGIC GOALS OF 
A BUSINESS
BSC DESIGNER 
FOR BUSINESS 
• Long-Term Vision -- to increase direct sales 
through demonstrator support
BSC DESIGNER 
FOR BUSINESS 
• Long-Term Vision -- to increase direct sales 
through demonstrator support 
• Current Object...
BSC DESIGNER 
FOR BUSINESS 
• Long-Term Vision -- to increase direct sales 
through demonstrator support 
• Current Object...
IN BSC DESIGNER 
AN EXAMPLE
BSC DESIGNER 
DEMONSTRATOR GOALS FOR 
EMPLOYEE 
• Hold two extra parties per 30 day period.
BSC DESIGNER 
DEMONSTRATOR GOALS FOR 
EMPLOYEE 
• Hold two extra parties per 30 day period. 
• Increase sales by 10 percen...
KEY PERFORMANCE INDICATOR FOR 
BSC DESIGNER 
EMPLOYEE 
• Performance will be measured at the end of 
every month by immedi...
HOW TO DEFINE 
EFFECTIVE KPIS
HOW TO DEFINE EFFECTIVE KPIS 
• First understand the objectives of your 
company, the abilities of your employees, and 
th...
HOW TO DEFINE EFFECTIVE KPIS 
• First understand the objectives of your 
company, the abilities of your employees, and 
th...
HOW TO DEFINE EFFECTIVE KPIS 
• First understand the objectives of your company, 
the abilities of your employees, and the...
BSC DESIGNER 
AN EMPLOYEE’S EXPECTATIONS 
MIRROR THE STRATEGIC GOALS 
• Above all, you should remember that 
measuring the...
BSC DESIGNER 
AN EMPLOYEE’S EXPECTATIONS 
MIRROR THE STRATEGIC GOALS 
• Above all, you should remember that 
measuring the...
BSC DESIGNER 
AN EMPLOYEE’S EXPECTATIONS 
MIRROR THE STRATEGIC GOALS 
• Above all, you should remember that measuring 
the...
KPIS IN BSC DESIGNER
BSC DESIGNER 
KPIS IN BSC DESIGNER 
• BSC Designer actually supports the Business 
Scorecard framework, which is consisten...
BSC DESIGNER 
KPIS IN BSC DESIGNER 
• BSC Designer actually supports the Business 
Scorecard framework, which is consisten...
BSC DESIGNER 
KPIS IN BSC DESIGNER 
• BSC Designer actually supports the Business Scorecard 
framework, which is consisten...
BSC DESIGNER 
KPIS IN BSC DESIGNER 
• BSC Designer can indicate which metrics 
adhere to your vision and strategy, and whi...
BSC DESIGNER 
KPIS IN BSC DESIGNER 
• BSC Designer can indicate which metrics 
adhere to your vision and strategy, and whi...
BSC DESIGNER 
KPIS IN BSC DESIGNER 
• BSC Designer can indicate which metrics 
adhere to your vision and strategy, and whi...
BSC DESIGNER
REINFORCE YOUR SYSTEM 
WITH REWARD KPIS
BSC DESIGNER 
REINFORCE YOUR SYSTEM WITH 
REWARD KPIS 
• Standard setting is an important factor in a 
business’s success ...
BSC DESIGNER 
REINFORCE YOUR SYSTEM WITH 
REWARD KPIS 
• Standard setting is an important factor in a 
business’s success ...
Find more insightful 
articles about the 
Balanced Scorecard 
in ”Articles” section at 
www.bscdesigner.com 
BSC DESIGNER ...
BSC DESIGNER 
THANK YOU! 
Feel free to send us your questions using the contact form at 
www.bscdesigner.com
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Effective KPIs: 6 common problems in target setting and how to solve them

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Effective KPIs cannot be just copied from some industry list, one need to develop them in the specific business context and align with company's objectives. Learn how to avoid 6 typical problems with KPIs and target settings.

Published in: Business
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Effective KPIs: 6 common problems in target setting and how to solve them

  1. 1. EFFECTIVE KPIS: 6 COMMON PROBLEMS IN TARGET SETTING Based on http://www.bscdesigner.com/6-problems-in-target-setting.htm By Levi Newman
  2. 2. PERFORMANCE MANAGEMENT IS BASED HEAVILY IN KPIS
  3. 3. PERFORMANCE MANAGEMENT IS BSC DESIGNER BASED HEAVILY IN KPIS • It’s one of the most difficult tasks for any manager.
  4. 4. PERFORMANCE MANAGEMENT IS BSC DESIGNER BASED HEAVILY IN KPIS • It’s one of the most difficult tasks for any manager. • It’s a key factor in helping a small business grow into a big business.
  5. 5. PERFORMANCE MANAGEMENT IS BSC DESIGNER BASED HEAVILY IN KPIS • It’s one of the most difficult tasks for any manager. • It’s a key factor in helping a small business grow into a big business. • It helps all businesses maintain structural integrity and efficiency.
  6. 6. CLEAR OBJECTIVES HELP TRACKING POSITIVE CHANGE
  7. 7. CLEAR OBJECTIVES HELP TRACKING BSC DESIGNER POSITIVE CHANGE 6 problems in target setting
  8. 8. 6 PROBLEMS IN TARGET SETTING BSC DESIGNER 1 Goals based on the wrong performance measures
  9. 9. 6 PROBLEMS IN TARGET SETTING BSC DESIGNER 2 Goals are based on past performance
  10. 10. 6 PROBLEMS IN TARGET SETTING 3 Unrealistic expectations BSC DESIGNER
  11. 11. 6 PROBLEMS IN TARGET SETTING BSC DESIGNER 4 Placing all expectations on financial goals
  12. 12. 6 PROBLEMS IN TARGET SETTING BSC DESIGNER 5 Using ineffective data analysis programs
  13. 13. 6 PROBLEMS IN TARGET SETTING BSC DESIGNER 6 No agreement on action plans
  14. 14. CLEAR OBJECTIVES HELP TRACKING BSC DESIGNER POSITIVE CHANGE • It goes without saying that without clearly defined KPIs you’re setting your employees and company up for failure.
  15. 15. CLEAR OBJECTIVES HELP TRACKING BSC DESIGNER POSITIVE CHANGE • It goes without saying that without clearly defined KPIs you’re setting your employees and company up for failure. • That’s why managers should understand that goals that align with a company’s overall strategy benefit everyone equally.
  16. 16. CLEAR OBJECTIVES HELP TRACKING BSC DESIGNER POSITIVE CHANGE • The only way to reach these goals, other than what’s been mentioned, is to continually measure and analyze the results.
  17. 17. CLEAR OBJECTIVES HELP TRACKING BSC DESIGNER POSITIVE CHANGE • The only way to reach these goals, other than what’s been mentioned, is to continually measure and analyze the results. • This critical link ensures that what they’re doing on a daily basis matches the needs of the company.
  18. 18. AN EMPLOYEE’S EXPECTATIONS MIRROR THE STRATEGIC GOALS OF A BUSINESS
  19. 19. BSC DESIGNER FOR BUSINESS • Long-Term Vision -- to increase direct sales through demonstrator support
  20. 20. BSC DESIGNER FOR BUSINESS • Long-Term Vision -- to increase direct sales through demonstrator support • Current Objective -- put more demonstrators in front of potential customers through hosted parties and workshops
  21. 21. BSC DESIGNER FOR BUSINESS • Long-Term Vision -- to increase direct sales through demonstrator support • Current Objective -- put more demonstrators in front of potential customers through hosted parties and workshops • Key Performance Indicator -- Measure amount of new parties hosted parallel to past analytics (volume and sales)
  22. 22. IN BSC DESIGNER AN EXAMPLE
  23. 23. BSC DESIGNER DEMONSTRATOR GOALS FOR EMPLOYEE • Hold two extra parties per 30 day period.
  24. 24. BSC DESIGNER DEMONSTRATOR GOALS FOR EMPLOYEE • Hold two extra parties per 30 day period. • Increase sales by 10 percent per party hosted.
  25. 25. KEY PERFORMANCE INDICATOR FOR BSC DESIGNER EMPLOYEE • Performance will be measured at the end of every month by immediate supervisor. • Results will determine what can be done to improve, what’s working, and what can be done to improve areas for other employees.
  26. 26. HOW TO DEFINE EFFECTIVE KPIS
  27. 27. HOW TO DEFINE EFFECTIVE KPIS • First understand the objectives of your company, the abilities of your employees, and the ways in which you can make a strategy into a reality. BSC DESIGNER
  28. 28. HOW TO DEFINE EFFECTIVE KPIS • First understand the objectives of your company, the abilities of your employees, and the ways in which you can make a strategy into a reality. • That’s why you must first be able to answer what the overall vision for the future should look like, and how it can be accomplished. BSC DESIGNER
  29. 29. HOW TO DEFINE EFFECTIVE KPIS • First understand the objectives of your company, the abilities of your employees, and the ways in which you can make a strategy into a reality. • That’s why you must first be able to answer what the overall vision for the future should look like, and how it can be accomplished. • You have to remain flexible to the fact that objectives can and do change, so you don’t want to remain too static when it comes to developing a strategic direction. BSC DESIGNER
  30. 30. BSC DESIGNER AN EMPLOYEE’S EXPECTATIONS MIRROR THE STRATEGIC GOALS • Above all, you should remember that measuring these results is critical to long-term success.
  31. 31. BSC DESIGNER AN EMPLOYEE’S EXPECTATIONS MIRROR THE STRATEGIC GOALS • Above all, you should remember that measuring these results is critical to long-term success. • Just because something is currently working, doesn’t mean it’ll will continue to work in the future.
  32. 32. BSC DESIGNER AN EMPLOYEE’S EXPECTATIONS MIRROR THE STRATEGIC GOALS • Above all, you should remember that measuring these results is critical to long-term success. • Just because something is currently working, doesn’t mean it’ll will continue to work in the future. • Being able to help your employees adapt to changes in the business climate will not only help you build trust within your workforce, it’ll ensure that they’re keeping up with the evolving strategy.
  33. 33. KPIS IN BSC DESIGNER
  34. 34. BSC DESIGNER KPIS IN BSC DESIGNER • BSC Designer actually supports the Business Scorecard framework, which is consistently one of the most popular tools for executing a business strategy.
  35. 35. BSC DESIGNER KPIS IN BSC DESIGNER • BSC Designer actually supports the Business Scorecard framework, which is consistently one of the most popular tools for executing a business strategy. • And not only is it a strategy map, BSC Designer can visualize business processes and KPIs and act as a base for strategy discussions, performance reviews, or as a presentation of your strategic ideas.
  36. 36. BSC DESIGNER KPIS IN BSC DESIGNER • BSC Designer actually supports the Business Scorecard framework, which is consistently one of the most popular tools for executing a business strategy. • And not only is it a strategy map, BSC Designer can visualize business processes and KPIs and act as a base for strategy discussions, performance reviews, or as a presentation of your strategic ideas. • In layman’s terms, it can see the “big picture” of your strategy, and give you the tools to measure your plans success.
  37. 37. BSC DESIGNER KPIS IN BSC DESIGNER • BSC Designer can indicate which metrics adhere to your vision and strategy, and which are inconsequential to your success.
  38. 38. BSC DESIGNER KPIS IN BSC DESIGNER • BSC Designer can indicate which metrics adhere to your vision and strategy, and which are inconsequential to your success. • It can measure and give benchmarks along your goal’s path.
  39. 39. BSC DESIGNER KPIS IN BSC DESIGNER • BSC Designer can indicate which metrics adhere to your vision and strategy, and which are inconsequential to your success. • It can measure and give benchmarks along your goal’s path. • It can even help you determine which metrics could be manipulated in a negative way, so that you can better define or monitor changing strategies.
  40. 40. BSC DESIGNER
  41. 41. REINFORCE YOUR SYSTEM WITH REWARD KPIS
  42. 42. BSC DESIGNER REINFORCE YOUR SYSTEM WITH REWARD KPIS • Standard setting is an important factor in a business’s success and an employee’s personal development, but is a reward system.
  43. 43. BSC DESIGNER REINFORCE YOUR SYSTEM WITH REWARD KPIS • Standard setting is an important factor in a business’s success and an employee’s personal development, but is a reward system. • Reinforce your employees’ efforts by established recognition practices that are directly tied to the original KPIs that were set.
  44. 44. Find more insightful articles about the Balanced Scorecard in ”Articles” section at www.bscdesigner.com BSC DESIGNER MORE ABOUT THE BALANCED SCORECARD
  45. 45. BSC DESIGNER THANK YOU! Feel free to send us your questions using the contact form at www.bscdesigner.com

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