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.

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. PERFORMANCE
MANAGEMENT IS BASED
HEAVILY IN KPIS

3. PERFORMANCE MANAGEMENT IS
BSC DESIGNER
BASED HEAVILY IN KPIS
• It’s one of the most difficult tasks for any
manager.

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. 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. CLEAR OBJECTIVES HELP
TRACKING POSITIVE
CHANGE

7. CLEAR OBJECTIVES HELP TRACKING
BSC DESIGNER
POSITIVE CHANGE
6
problems
in target
setting

8. 6 PROBLEMS IN TARGET SETTING
BSC DESIGNER
1
Goals based
on the wrong
performance
measures

9. 6 PROBLEMS IN TARGET SETTING
BSC DESIGNER
2
Goals are
based on
past
performance

10. 6 PROBLEMS IN TARGET SETTING
3 Unrealistic
expectations
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11. 6 PROBLEMS IN TARGET SETTING
BSC DESIGNER
4
Placing all
expectations
on financial
goals

12. 6 PROBLEMS IN TARGET SETTING
BSC DESIGNER
5
Using
ineffective
data analysis
programs

13. 6 PROBLEMS IN TARGET SETTING
BSC DESIGNER
6
No
agreement
on action
plans

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. 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. 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. 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. AN EMPLOYEE’S
EXPECTATIONS MIRROR
THE STRATEGIC GOALS OF
A BUSINESS

19. BSC DESIGNER
FOR BUSINESS
• Long-Term Vision -- to increase direct sales
through demonstrator support

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. 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. IN BSC DESIGNER
AN EXAMPLE

23. BSC DESIGNER
DEMONSTRATOR GOALS FOR
EMPLOYEE
• Hold two extra parties per 30 day period.

24. BSC DESIGNER
DEMONSTRATOR GOALS FOR
EMPLOYEE
• Hold two extra parties per 30 day period.
• Increase sales by 10 percent per party hosted.

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. HOW TO DEFINE
EFFECTIVE KPIS

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. 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. 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. 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. 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. 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. KPIS IN BSC DESIGNER

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. 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. 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. 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. 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. 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. BSC DESIGNER

41. REINFORCE YOUR SYSTEM
WITH REWARD KPIS

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. 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. Find more insightful
articles about the
Balanced Scorecard
in ”Articles” section at
www.bscdesigner.com
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MORE ABOUT THE BALANCED SCORECARD

45. BSC DESIGNER
THANK YOU!
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