Key Performance Indicators (KPIs) are a measurable way of assessing an employee’s performance. Setting KPIs allows for employers to tangibly set & measure targets for staff, aiding employers in forecasting and maximizing the potential of the workforce. As such, it is always advisable for an employer to revisit the matter of KPIs early in the New Year.
Before introducing the topic of KPIs to staff you should ensure that you have decided upon a set of targets which are achievable, measurable and realistic. Trying to introduce targets which are unachievable and un-measureable is likely to produce the opposite result to what you are aiming for; it could result in employees not agreeing to work under them as they know they cannot be achieved. You should talk to your employees and tell them what you are planning to introduce. You can do this in writing, by letter or email, as well as verbally and personally talking to them about your plans. You should consult with staff and let them discuss the introduction of KPIs with you. If you let the employees know the reasons for introducing these then they could come up with other suitable suggestions or methods that you haven’t considered before. If alternatives are put forward by the employees then you should take these into consideration during the introduction process. You should make your employees aware that, even though you are introducing set KPIs, they will be reviewed and updated constantly.
Introducing a performance management system such as this could be deemed a changing of the terms and conditions of existing staff and, as such, should you unilaterally enforce this without their consent the staff could resist and it could give rise to potential litigation. However, there would not be the same concern with regards introducing this with new hires as there would be no changes to their terms of employment.
Putting targets in to practice may apply at certain points of the year but may become invalid or ineffective after a set time, for example, if you implement sales targets KPIs then these might be affected during slow trade periods. When introducing KPIs, you should put thought into how you will take action if employees do not achieve them. You should consider each employee’s circumstances for not reaching their targets individually; their reasons might differ and if you apply the same principles to everyone this could be deemed to be unfair.
If you need any clarification on this issue then contact the 24 Hour Peninsula Advice Service on 01 855 50 50.
