7 Reasons why KPIs systems fail


When we start setting up KPIs and addressing it to people and teams, everyone specifically higher management of the company is excited. They assume that from the day after, the profit of the company will jump to the next level remarkably and all other problems including retention rate, effectiveness, employee satisfaction and etc. will be solved over a night.

We all know that it is not true!

Among all reasons, we would like to share these 7 important reasons based on our experience and observation:

1. Onboarding:

The system should be introduced to people carefully and properly. As I mentioned in our  previous articles they should know exactly "WHAT IT IS IN IT FOR THEM?"

-Transparency in evaluation and feedbacks.

-Improving promotion system

-Objective discussions


2. Disappointing Targets:

Motivating people to do more is awesome but pushing them for better results with no explanation and reason lead either to cheating and manipulating results or leaving you as soon as possible!

Solution: In all your excel sheets, soft-wares and systems set up two targets: Current target and Enhanced target. The evaluation will be based on current one but by showing people the enhanced one you actually tell them the expectation and possibilities to get motivated to do even better in long-term.

3. Lack of training, workshops and discussions:

In one word we call it lack of communication. The more you speak with people the better you get their support.

4. Lack of listening.

Listen to your people and their problems as much as possible. Don't give them the targets and leave them to struggle. They should know the reason of defining each and every KPI including the targets, enhanced targets and etc.

5. No reward. No recognition.

No matter how old employees are, no matter what position they have, they still would like to be recognized and rewarded. It's not about money. Sometimes just a simple email does miracle.

6. Explaining the big picture.

People should know what they are contributing for. Where the company is leading to and why? Let them know the strategy of the company. How you would like them to help and how much their role is important.

Show them the trust and let them play their role freely.

7. Not everything is confidential.

Show people financial results and financial KPIs of your scorecard. Not everything is confidential! Nowadays, by all rules of transparency and also with big thanks to internet and social media, there is almost nothing to be hidden for long-term from people.

Don't be scared of revealing the real situation of your company.

People are smart and honesty is the best policy.