Stages of development and implementation of manager KPIs
Posted: Sun Jan 19, 2025 4:58 am
Let's consider the process of developing and implementing managerial KPIs.
Stage 1. Goal setting
Based on the goals and objectives, a motivation system is developed. It is important to define both short-term and long-term goals.
Step 2: Prioritize
There shouldn't be too many self employed data package tasks. Managers' KPIs should be focused on the company's strategic goals. For example, if a company needs to become a market leader, then increasing the customer base and sales volumes will be a priority.
Step 3. Formulating desired results and specific deadlines
When developing a plan, the results of the analysis of previous reports on the work of the departments are taken into account. At the same time, the desired results must be realistic and measurable. As a rule, enterprises set minimum, optimal and desired indicators.
Stage 4. Development of a motivation system
The manager needs to determine the amount of remuneration that will be paid for achieving specific results. It may consist of more than just financial incentives. The reward may include discounts on goods, additional vacations, free training, and so on. For example, the company provides the best manager of the year with a trip abroad.
Step 5. Testing the model in a focus group
It is necessary to select one or two departments and conduct an experiment with the new system on them. During testing, most likely, some shortcomings will be revealed that should be eliminated. If the results can be called satisfactory in general, then the implementation of the model begins in other departments.
Focus group testing
Source: shutterstock.com
Stage 6. Preparation of documentation
All rules for calculating the manager's salary based on KPIs must be officially documented.
Stage 7. Familiarizing managers with the new payment system
Each employee must clearly understand how the metrics will be calculated. Information can be disseminated by posting it on various media.
Stage 8. Monitoring
After a certain period of time (for example, a quarter), it is necessary to evaluate the effectiveness of the system. If managers do not meet the KPI, then it is necessary to find out the reasons for the problem. Often this is due to the unattainability of indicators. Often this is explained by insufficient motivation of employees.
Step 9. Analysis and change of KPIs
At least once a year, the level of compliance of managers' KPIs with the company's strategic goals should be assessed. If the situation in the organization changes, then it will probably be necessary to adjust the KPIs.
Download a useful document on the topic:
Stage 1. Goal setting
Based on the goals and objectives, a motivation system is developed. It is important to define both short-term and long-term goals.
Step 2: Prioritize
There shouldn't be too many self employed data package tasks. Managers' KPIs should be focused on the company's strategic goals. For example, if a company needs to become a market leader, then increasing the customer base and sales volumes will be a priority.
Step 3. Formulating desired results and specific deadlines
When developing a plan, the results of the analysis of previous reports on the work of the departments are taken into account. At the same time, the desired results must be realistic and measurable. As a rule, enterprises set minimum, optimal and desired indicators.
Stage 4. Development of a motivation system
The manager needs to determine the amount of remuneration that will be paid for achieving specific results. It may consist of more than just financial incentives. The reward may include discounts on goods, additional vacations, free training, and so on. For example, the company provides the best manager of the year with a trip abroad.
Step 5. Testing the model in a focus group
It is necessary to select one or two departments and conduct an experiment with the new system on them. During testing, most likely, some shortcomings will be revealed that should be eliminated. If the results can be called satisfactory in general, then the implementation of the model begins in other departments.
Focus group testing
Source: shutterstock.com
Stage 6. Preparation of documentation
All rules for calculating the manager's salary based on KPIs must be officially documented.
Stage 7. Familiarizing managers with the new payment system
Each employee must clearly understand how the metrics will be calculated. Information can be disseminated by posting it on various media.
Stage 8. Monitoring
After a certain period of time (for example, a quarter), it is necessary to evaluate the effectiveness of the system. If managers do not meet the KPI, then it is necessary to find out the reasons for the problem. Often this is due to the unattainability of indicators. Often this is explained by insufficient motivation of employees.
Step 9. Analysis and change of KPIs
At least once a year, the level of compliance of managers' KPIs with the company's strategic goals should be assessed. If the situation in the organization changes, then it will probably be necessary to adjust the KPIs.
Download a useful document on the topic: