Key performance indicators

From Encyklopedia Administracji Publicznej

KEY PERFORMANCE INDICATORS (KPI), also known as key efficiency indicators – indicators that concentrate on the aspects of the organisation’s functioning, which are the most important for the current and future success of this organisation. In the broadest perspective, KPIs are financial and non-financial indicators that allow to assess all the most important (key) areas of the organisation’s activities from the point of view of achieving its strategic goals. KPIs in this approach are a set of indicators focusing on those organisational aspects that are key to the organisation’s current and future success. In a narrower sense, KPIs do not include Key Result Indicators, i.e. the measures of key performance effects (result and impact indicators). KPIs in a narrow perspective have seven features: non-financial nature, timeliness (they are often measured), they are supervised by senior management, they are simple (understandable), team-based, they have a significant impact on the organisation and they limit the “dark side” (undesirable behaviour). KPIs are used both in private sector entities and in public units within a management control system or task budgeting. It is recommended to define not more than nine KPIs for an organisation [ T. Strąk ].

Literature: D. Paramenter, Kluczowe wskaźniki efektowności (KPI). Tworzenie, wdrażanie i stosowanie [Key performance indicators (KPIs). Creation, implementation and use], Gliwice 2016 ■ T. Strąk, Modele dokonań jednostek sektora finansów publicznych [Models of achievements of public finance sector entities], Warszawa 2012 ■ Value Based Management. Koncepcje, narzędzia, przykłady [Value Based Management. Concepts, tools, examples], ed. A. Szablewski, K. Pniewski, B. Bartoszewicz, Warszawa 2008.