Why are business performance indicators important?
Posted: Sun Jan 19, 2025 6:23 am
In addition, KPIs ensure objective monitoring of performance and provide a solid basis for triggering recognition and reward (granting bonuses, for example). And that clearly contributes to employee engagement .
Defining your KPIs: What about the SMART indicator?
However, to reap the benefits mentioned above, it is important to accurately identify which business performance indicators should be monitored on a priority basis, as it is difficult to observe them all under a magnifying glass
To select the most relevant KPIs, we advise you to use the SMART method . This kuwait whatsapp shopping data involves choosing metrics that are both:
Specific : They describe exactly what is being measured without leaving room for ambiguity;
Measurable : Quantify progress so you can objectively check whether it has been achieved;
Achievable : They are realistic and achievable with the resources and time available, with the aim of motivating employees without discouraging them;
Relevant : They are aligned with the company's strategy and have a direct impact on its success;
Time-limited : These include a deadline for achieving the goal.
The 5 different types of business performance indicators
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What are the main key performance indicators?
Each company has its own characteristics and ambitions. Therefore, it will not follow the same KPIs as its neighbour. However, here are the most common KPIs, classified into broad categories .
Financial performance indicators
These indicators allow you to assess the financial health of your organization, with a view to profitability and future prospects. They are key data for managers, but also for shareholders and other investors who wish to assess the value of the company.
There are KPIs linked to accounting and treasury management .
Examples of financial performance indicators:
sales ;
net cash ;
working capital needs;
overall net working capital;
Break even point ;
gross margin ;
sales margin ;
gross operating surplus ;
operating cash flow ;
EBITDA, etc.
More details in our article dedicated to financial indicators !
Defining your KPIs: What about the SMART indicator?
However, to reap the benefits mentioned above, it is important to accurately identify which business performance indicators should be monitored on a priority basis, as it is difficult to observe them all under a magnifying glass
To select the most relevant KPIs, we advise you to use the SMART method . This kuwait whatsapp shopping data involves choosing metrics that are both:
Specific : They describe exactly what is being measured without leaving room for ambiguity;
Measurable : Quantify progress so you can objectively check whether it has been achieved;
Achievable : They are realistic and achievable with the resources and time available, with the aim of motivating employees without discouraging them;
Relevant : They are aligned with the company's strategy and have a direct impact on its success;
Time-limited : These include a deadline for achieving the goal.
The 5 different types of business performance indicators
tile banner
What are the main key performance indicators?
Each company has its own characteristics and ambitions. Therefore, it will not follow the same KPIs as its neighbour. However, here are the most common KPIs, classified into broad categories .
Financial performance indicators
These indicators allow you to assess the financial health of your organization, with a view to profitability and future prospects. They are key data for managers, but also for shareholders and other investors who wish to assess the value of the company.
There are KPIs linked to accounting and treasury management .
Examples of financial performance indicators:
sales ;
net cash ;
working capital needs;
overall net working capital;
Break even point ;
gross margin ;
sales margin ;
gross operating surplus ;
operating cash flow ;
EBITDA, etc.
More details in our article dedicated to financial indicators !