Understanding the assessment indicators is only the first step. Next, we need to know how to set KPI indicators. Regarding KPI indicators and corresponding parameters, the team must formulate them according to their own actual conditions. There are 3 points to note in setting KPI indicators.
1. Consider the actual situation of the industry
Reasonably set KPI indicators according to the actual situation of the industry, that is, set KPI indicators according to the current industry and its own situation. For example, when a company sets KPI indicators, it is unreasonable to set them too much higher or too much lower than the industry average standard; for example, it is unreasonable for a startup company to set the same KPI indicators as a mature large company.
2. Consider time factors such as seasons
KPI assessment cycles are usually divided into three categories, namely annual, quarterly and monthly. But at the same time, they should also be set flexibly according to the actual situation of the industry. For example, in the fourth quarter of each year, the Amazon platform enters the peak sales season, and daily sales may be several times higher than usual, especially at several time nodes such as “Black Friday” and “Christmas”, there will be sales peaks. Therefore, for the peak sales season in the fourth quarter, the overall KPI indicators should be set relatively high.
3. Consider personnel resources
When setting KPI indicators, companies should also consider personnel resources. For example, in some Amazon startup teams, one person may be responsible for both account operations and product development. If he is assessed on multiple KPI indicators at the same time, he will not be able to grasp the focus of his work and thus be distracted.
At this time, it is necessary to allocate everyone’s key tasks and strictly follow the “80/20 principle”, that is, assess the output of their key business. If an employee is in charge of account operations, then he should be assessed mainly on the KPI indicators for account operations, supplemented by KPI assessments in other aspects.