KPI (Key Performance Indicator)
A specific, measurable metric inside a KRA that tells you whether work is on track or off.
What is KPI (Key Performance Indicator)?
KPI stands for Key Performance Indicator. It's the actual number or yes/no measure that proves whether an employee is delivering on a KRA. Good KPIs follow the SMART rule: specific, measurable, achievable, relevant, and time-bound. Examples include 'close 10 deals per quarter', 'reduce attrition under 12%', or 'publish 4 blog posts a month'. Indian companies usually set 2-4 KPIs per KRA, giving 10-20 total KPIs per role. The trap to avoid is vanity KPIs that look impressive but don't move the business, like 'number of meetings attended' or 'emails sent'.
Example
Under the KRA 'Recruitment', KPIs could be: time-to-hire under 30 days, offer-to-join ratio above 80%, and cost-per-hire under ₹25,000.
How KPI (Key Performance Indicator) is used
Pick KPIs the employee can actually influence. If a marketing manager's KPI is 'company revenue', that's outside their control and feels unfair at review time.
KPI (Key Performance Indicator) FAQs
How often should KPIs be reviewed?
Monthly or quarterly check-ins work best. Annual review is too late to course-correct a missed target.
What's a leading vs lagging KPI?
Leading KPIs predict future results (calls made). Lagging KPIs measure past results (revenue closed). Track both.
Can two employees share the same KPI?
Yes, for shared team goals. But each person should also have individual KPIs so accountability stays clear.