A performance indicator is a metric used, in conjunction with other such metrics, to measure and thus help management to direct the functioning and success of an organisation such as a university. Many performance indicators are not of a financial nature and in fact the use of non-financial performance indicators is a key part of the balanced scorecard approach to management. It is in the nature of management that they can only oversee a relatively small number (say two dozen) of performance indicators key to the success of the organisation - others are left to more junior managers to oversee. The top-level performance indicators are the key performance indicators, KPIs for short.
Components of an organisation can also have their own KPIs, which are usually only performance indicators and not KPIs at the top level.
- The Wikipedia article on key performance indicators.
- There are some good tips on KPI creation from Microsoft.
- For commercial KPIs there is a useful guide to KPIs from BusinessLink called Setting Business Targets.
- Many universities in the UK are still uncomfortable with the idea of "reducing" their management of the organisation to the management of KPIs and prefer broader, vaguer or gentler indicators, which have the downside of being harder to measure and thus control.
- Note that the term KPI is used only once on the HEFCE web site, twice on the JISC web site and under 10 times on the DfES web site.