What are "key performance indicators" (KPIs)?

Key performance indicators (KPIs) are essential metrics used by organizations to measure their progress toward achieving key objectives and goals. They serve as quantifiable measures that provide insight into various aspects of performance, such as productivity, efficiency, quality, and profitability. By utilizing KPIs, managers can evaluate how well the organization or a specific department is performing against its strategic targets.

KPIs help organizations to focus on the most important areas of performance, enabling them to make informed decisions, adjust strategies, and drive improvement. For example, a business might track sales growth, customer satisfaction scores, or employee retention rates as KPIs. Ultimately, these indicators are integral to facilitating effective management and ensuring that the organization remains aligned with its long-term strategic goals.

While other options mention important aspects of a business, such as employee satisfaction or customer feedback, they don’t encompass the broader evaluative framework that KPIs provide for overall organizational success.