Worksheet for Understanding Key Performance Indicators
INSTRUCTIONS
Use this worksheet to identify and understand your organization's and unit’s key performance
indicators (KPIs).
1. What are your company’s high-level goals? Consider the type of organization you work for, its mission,
and its strategy. For example, if your company is global, perhaps a high-level goal is to expand sales in
international markets. If your organization is a social service nonprofit, maybe a goal is to reduce the ratio
of administrative costs to total donations received. If you’re not sure of your company’s high-level goals,
ask your boss for clarification.
2. What measurements does your company use to assess how well it’s achieving its high-level goals? These
measurements are the company’s key performance indicators. Examples may include “Percentage of
income deriving from international markets,” “Total administrative costs as a percentage of donations
received,” “Customer service quality index” (from surveys),”Ratio of sales of new products to total sales,”
and “Number of benefits claims processed in current year versus previous year.” If you’re not sure which
KPIs your company uses, ask your boss for advice.
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© 2014 Harvard Business School Publishing. All rights reserved. Harvard Business School Publishing is an affiliate of Harvard Business School
3. Of your company’s key performance indicators, which are input KPIs? Which are process KPIs? And which
are output KPIs? Input KPIs might include investments in research and development, funding for employee
training, quality of raw materials, and other assets and resources used to generate business results.
Process KPIs might encompass order-delivery time, time to fill vacant positions, product repair cycle time,
and other efficiency-related measurements. Output KPIs might include revenues, return on investment,
economic value added, breakeven time, revenues, number of new customers, and other results of business
activities.
4. What KPIs has your unit defined? Each unit has different KPIs tailored to its function within the company.
For instance, the customer service department probably tracks the number of customers served during a
given time period. The product development unit likely assesses the number of new offerings introduced
and the ratio of new to existing products. And the human resources unit probably measures workforce
skill levels, hiring efficiency, and other human capital related activities.
5. Which of your unit’s KPIs are input? Process? Output? See the examples in question 3 for reminders.
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© 2014 Harvard Business School Publishing. All rights reserved. Harvard Business School Publishing is an affiliate of Harvard Business School
6. In what ways do your unit’s KPIs relate to and support your company’s KPIs? For example, suppose you
work for a global consumer goods company that has a KPI “Percent income deriving from international
markets” and you lead a group in the adult apparel unit. In this case, your unit’s KPIs might include
“Number of satellite offices established in Europe,” “Total sales for Europe, Middle East/Africa, and Asia,”
and other KPIs related to your company’s goals.
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© 2014 Harvard Business School Publishing. All rights reserved. Harvard Business School Publishing is an affiliate of Harvard Business School