KPI
KAY-pee-EYE
/ˌkeɪ.piːˈaɪ/
Key Performance Indicator: a quantifiable measure used to evaluate the success of an organization or employee in meeting objectives.
A KPI must be measurable (a number) and directly linked to a strategic goal.
The story behind the word. The term emerged in the 1990s as part of the 'Balanced Scorecard' management strategy, which encouraged companies to look at more than just financial profit.
Word relationships
- metric: A metric is any number you track; a KPI is a 'key' metric that actually tells you if you are succeeding.
- vanity metric: A vanity metric looks good on paper (like social media 'likes') but doesn't actually correlate with business success.
Commonly confused with
- target: A target is the specific number you want to hit; the KPI is the category of what you are measuring.
Collocations
- track KPIs
- set KPIs
- meet a KPI
- financial KPI
Idioms & expressions
- what gets measured gets managed
Example sentences
- "Our primary KPI for this quarter is to reduce customer churn by 5%." Business Management
- "The manager sat down with the team to review their KPIs for the month." Performance Review
Memory hook
Think of a 'Key'—it unlocks the door to understanding how well you are performing. The number that matters.
When not to use
Don't use it for vague feelings; 'employee happiness' is only a KPI if you have a specific score from a survey to track it.
Fun facts
- The concept of measuring performance dates back to the Wei Dynasty in China (221-265 AD), where the Emperor rated the performance of family members.
Explore more words
metric, Dashboard, objective, Quantify, productivity, evaluation
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