How to define effective key performance indicators (KPIs)?
One of the most common questions people ask about performance dashboards is, How do we define effective key performance indicators (KPIs)? The answer is important because KPIs govern how employees do their jobs.
Metrics used in performance dashboards are typically called key performance indicators because they measure how well the organization or individual performs against predefined goals and targets. There are two major types of KPIs: leading and lagging indicators. Leading indicators measure activities that have a significant effect on future performance, whereas lagging indicators, such as most financial KPIs, measure the output of past activity.