Which KPIs Are Best for Your Project?

The creation of a set of key performance indicators (KPIs) is almost always an effective measure of how a project has performed in relation to the agreed strategic objective. Without KPIs to determine success, reaching goals becomes a guessing game.

The types of KPIs vary depending on the critical success factors (CSFs) for an industry, product or service, business, and operational strategies. But they need to be clearly identified, achievable, quantifiable and appropriately defined and within specific parameters in order to be fully adequate for a given project.

Understand the Current Scenario

Before deciding on the KPIs to be used, it is necessary to clearly and accurately define the critical success factors and then identify the KPIs that are most directly connected to those CSFs. Again, KPIs and CSFs should be clearly defined and agreed upon by stakeholders and should be ranked in order of importance to the overall business objectives and strategy.

Here are some examples of types of project management with KPIs applied by the team to measure their performance:

• Financial: They are typically used when the measurement is monetary.
• Quantitative: When the relevant metric is not financial, but it is numerical.
• Qualitative: Used when numbers are not a reference.
• Processes: Used when priority is to ensure efficiency.
• Team Performance: Used to measure the strength of a team and its ability to perform defined tasks.

KPIs for performance evaluation of project teams should be used to measure the quality of those teams, but it is also possible to use process KPIs or quantitative metrics, depending on the nature of the project, product, service or industry, as long as individual and team activities involve processes or activities to which they can be applied.

The right metric depends on the clear understanding of what you want to accomplish. Imagine that, instead of working in IT, you are a highway policeman. If your goal is to catch anyone who drives above the maximum allowed speed, your metric will be the highest number of fines issued per agent per hour. If, on the other hand, your goal is to minimize the amount of speeding on the roads, you will ensure that each police car is highly visible, and the metric will become the smallest amount of fines issued.

In most cases, there are four different ways to do metrics wrong:

• Measure the right things wrong.
• Measure the wrong things, good or bad.
• Negligence in measuring something important.
• Extend the metrics to individual employees.

In order to identify the most appropriate KPIs for your project, you need to go through two indespensable steps.

Step 1: Clearly Define Team Duties

When you are trying to determine your team’s performance measurement KPIs, think about expectations and factors that will determine success against specific project objectives and all other goals. It is important to know, as accurately as possible, what you want the team to do before you can decide how to measure it. Here are some steps that will help you compose this list:

• Determine the specific characteristics, qualities and skills necessary for the professionals who are part of the team.
• Dedicate the determining factors of a successful team, considering how people work together, interact and communicate, as well as the level of professionalism and commitment of each and everyone.
• Understand the interaction and communication facilities of team members with stakeholders, front-line staff, managers, vendors and clients.
• Identify the collective and individual factors that you believe will have positive or negative impacts to the project.
• Give constant feedback on project goals and how close they are or far away from achieving them. At that time, seek to be precise and direct. Use examples of what went right and what did not work instead of doing ambiguous reviews.

This list will help you determine KPIs that will effectively and truly measure team strength and performance. But remember that KPIs must not only be clearly identified, but must also be quantifiable, appropriately, using correct parameters.

Step 2: Focus on Criteria Selection

Consider the 10 project management knowledge areas: scope, time, cost, quality, human resources, communication, risk, power, management, and stakeholders. Try to identify exactly how your team will manage each of them and respond to them. This will ensure that you have a holistic view of the project and take into account all the factors that can join the game before choosing the criteria that determine the KPIs.

As part of this exercise, keep in mind that team KPIs must meet some needs, such as:

• The level of independence and interdependence of team members.
• Demonstration of leadership skills.
• How team members help each other in solving variable tasks.
• How team members resolve conflicts and help each other through difficult times.
• Absenteeism and its impact on the team's agenda and development.
• The quality standards of work today in relation to those that have already been requested.
• The level of participation and commitment of the project, evidenced with imputs and outputs.
• Attitudes and interaction during the project.
• How clearly and effectively team members communicate in a variety of ways.
• The ability to deliver the complete project, within scope.

Here are eight KPIs that can be adapted to measure the performance of a team:

• Employee Satisfaction Indexing
• Level of employee engagement
• Staff score (Percentage of completed activities)
• Motivation of team members
• Rotativity
• Absenteeism
• 360 degree feedback score
• ROI

Most companies have not developed the internal capabilities required to effectively implement a performance measurement system. Some kind of technical support for implementation seems to be desirable for many companies. If that's your case, do not think twice. KPIs-based companies ensure that their teams are working to achieve project objectives and have feedback, data challenges or strategies. Remember, all KPIs must be appropriately identified and realistically measurable, as well as clearly communicated, documented, and accepted by all.