Last week at the 2015 National Caravan Industry Association of Australia’s conference in Melbourne, FreeSpirit conducted a short workshop on how training your employees can actually reduce the costs of operating your business (in the longer term).
During this session, it was rewarding to see how many persons were interested in the discussion on the value of KPI’s and from this we thought it prudent to share some brief notes on this topic.
What is a KPI?
Put simply, these are the goals, targets or skills required for an individual staff member to achieve. Once these are set and the employees (and managers) achieve them, the OVERALL BUSINESS WILL BENEFIT.
What should be used to establish/build these KPI’s?
i. The aim of the company (mission statement).
ii. The individual employee Job Descriptions.
• FINANCIAL TARGETS
• POLICY AND PROCEDURES
• CUSTOMER SATISFACTION
• TIME MANAGEMENT
What factors should be considered when these KPI’s are issued.
i. These KPI’S should be mutually discussed and agreed PRIOR TO COMMENCEMENT.
ii. Must have TIME LIMITS ATTACHED.
iii. Have to be MEASURED AND ACHIEVABLE.
iv. Should allow for IMPROVEMENT of the SKILL BASE of the EMPLOYEE (and or the business).
v. EACH KPI SHOULD BE WEIGHTED AGAINST ITS IMPORTANCE.
vi. And most importantly, they must benefit BOTH BUSINESS AND EMPLOYEE.
Could the setting of KPI’s result as a financial burden to the business?
i. The business must budget for these when setting the annual budgets otherwise successful achievement
of these KPI’S by your employees may have a negative impact on the allowance for employment costs in the park/ business budget.
ii. WAGE/SALARY LEVELS/STRUCTURES/ BONUSES should be established with these rewards factored.
How will the business benefit from KPI’s?
i. If KPI’S are used as part of their employment contract, the employee remains motivated to achieve.
ii. If the employee is not performing as expected, employment contracts can be terminated; LEGALLY.
iii. If the employee does not achieve what is expected of them in their contracts, it may help the employee to realise THEIR OWN SHORTCOMINGS which they can address or choose to resign from.
iv. Overall the business itself should have these GOALS; sometimes these can be itemised in a business plan. However, often the very thought of preparing a full business plan can be daunting so make it easy for yourself and your employees, start with your GOALS or AIMs (KPI’S) and have everyone work towards these.
If you require some further assistance, we would be happy to guide you through the process, please contact us here.