What are some key performance indicators that are used by organizations in which you have been employed
Discussion 1:
Question:
What are some key performance indicators that are used by organizations in which you have been employed? How did managers explain the importance of these KPIs, and were any rewards tied to them?
Key Performance Indicators (KPI) is the measurable value that is used by an organization. The KPI is used to calculate the present business performance. In terms of the profit that some of the KPI’s are net profit margin, return on equity (ROE), Gross Profit Margin, and Monthly Recurring Revenue (MRR). The gross profit margin is the percentage of the total sales revenue is generated that determines the profit (Jahangirian, Taylor, Young, & Robinson, 2017). The Return on Equity used to measure the net income. The unit of shareholder helps in measuring the net income of the company. This will also help in measuring the profitability of the organization. And also used to measure the efficiency of the organization. By understanding the liquidity of the organization that the KPI of the current ratio will weigh the assets. This will helps in acquiring the solving ability of the business. The revenue growth rate is another term to understand the efficiency of the organization. The KPI is used to ensure the business that maintains the continuous increment at the rate of the target. The KPI will also play an important role in understanding the effectiveness of the brand. Social media mentions are an important measurement that will able to measure the effectiveness of the brand (Toader & Roibu, 2016). Social media is the best method used to mention the brand on Facebook, Twitter, etc. Basically, the KPI is one of the best methods to guide the business towards the strategic goals and objectives that will help to build effectiveness in the business. In order to increase the customer retention that the company will able to establish the KPI. To convert the measured and the qualified data into the actionable terms due to the goals and objectives are achieved by the company. If the KPI should not reflect the own business that should lead to affect any positive change in the business.
Question:
What are some key performance indicators that are used by organizations in which you have been employed? How did managers explain the importance of these KPIs, and were any rewards tied to them?
In order to monitor the performance of the business for better decision making, the organization in which I work employs several key performance indicators. Profit is one of the KPI that the organization uses to understand whether the organization is generating high returns or losses. The manager explained the profit KPI as the most important KPI that analyses both gross and net profit margins to analyse if the organization is profitable,
In addition, the organization’s management uses the customer satisfaction and retention as a key performance indicator. Basically is the customers gets satisfied they will always come back to make purchases to the organization and if the organization’s goods and services fails to meet customers’ needs they tend to seek the same services in another organizations. There are rewards tied in ensuring customer satisfaction such as providing quality goods and services, and allowing discounts to the customers who make purchases of goods and services from the organization (“Kingston University, Key Performance Indicators and Service Standards,” 2017).
Also, the employee turnover rate is another KPI that the organization employs in evaluating whether the organizations performance is good or bad. The high employee turnover rate means that the organization’s performance is performing negatively which requires the organization to evaluate the working culture and employment packages. In regards to the employee turnover rate, the employee satisfaction is important in that it motivates the employee to work hard to achieve the organizations objectives. There are rewards tied to the employee satisfaction such that the highly motivated employees through bonuses and incentives for the best performance tend to improve the organization’s productivity.