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How to Use KPIs in Human Resources [+Free Template]

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Key Performance Indicators (KPIs) are already widely used in marketing and sales. However, more HR teams in Kenya are now using them to measure employee performance, track progress and align HR activities with business goals.

KPIs provide a reliable way to measure performance and set clear objectives. In this guide, we’ll explain what you need to know about HR KPIs and how to use them in your organisation. If you’re ready to start setting objectives, download our free template.👇

What is a KPI?

KPI stands for Key Performance Indicator. It is a metric used to measure the performance of an activity or process. It helps organisations track progress towards specific objectives and determine whether their current strategies are delivering the expected results.

Based on the results, businesses can decide whether to maintain, adjust or change their approach to achieve their goals.

Characteristics of KPIs

There are different types of KPIs that businesses can use. Some of the most common include:

  • Quantitative indicators: Performance measures that can be expressed in numbers.
  • Qualitative indicators: Measures based on non-numerical information, such as employee feedback.
  • Process indicators: Measures used to assess the productivity and efficiency of a process.
  • Directional indicators: Measures that show whether a business is improving or declining.

To ensure KPIs are effective and easy for employees to understand, they should follow the SMART criteria:

  • Specific: Each KPI should have a clear objective.
  • Measurable: You should be able to track progress using defined metrics.
  • Attainable: Set realistic targets that employees can achieve.
  • Relevant: Focus on activities that contribute to your organisation’s objectives.
  • Time-bound: Set a clear timeframe for achieving each objective.

How to Use KPIs?

Once you’ve defined your organisation’s KPIs, the next step is to organise and track them.

You can create an Excel spreadsheet or use our template to start measuring performance across key HR areas, including recruitment, employee retention, training and development, productivity and performance. The KPIs provided in our template are quantitative indicators, meaning they are measured using numbers. Each KPI should be assigned a weight based on its importance. You can use percentages or create your own priority scale.

The target represents the expected result, based on previous performance data and your organisation’s objectives. Record the actual results in the next column. The score reflects the percentage of the target achieved, giving you a clear picture of performance. With this information, HR teams and managers can identify gaps, track progress and adjust their strategies where necessary.

Access Reports and Analytics

Do you need more than just a spreadsheet? Try our reports and analytics feature.

Create personalised reports by selecting the data you need and choosing how you want to display it. The dashboard brings your data together, making it easier to review key figures, charts and performance trends at a glance.

Manage KPIs with Factorial

Keep your business goals on track with Factorial. Set measurable objectives, monitor employee progress and manage performance reviews in one place. Book a demo to see how Factorial can simplify performance management.

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