Key Performance Indicators – Proper Selection And Design From The Human Resources Perspective

Abstract :

Motivation. The connection between human resource management and company’s performance is a subject of discussion in the literature. Some practitioners discussed areas in which performance measurement might be useful. However, no widely accepted guideline has been presented to manage business performance so far. There are publications about guidelines for KPI development but this problem is treated in the literature selectively.?Objective. The objective of this paper is to attempt to integrate knowledge about KPI development guidelines and to propose guidelines for the development of the appropriate KPIs in the human aspect.?Design/methodology. The objective has been achieved through the literature studies, its critical analysis and the author's practical experience.?Findings. There are no universally accepted guidelines in the literature regarding the determination of KPIs for employees. The guidelines literature list should be supplemented by the following guidelines: a) the selection of assessment indicators should take into account these guidelines and include within its scope parameters affecting the increase of this value, b) the area that includes indicators should be narrower when determining KPIs for lower positions in the organizational hierarchy and include, for example, the volume of production and waste for direct production employees, c) the bonus percentage should be felt by the employee, d) the bonus should be a reward rather than a permanent salary supplement e) for all employees, and at least for the managerial staff, one of the KPIs should be the company's overall result such as net result, EBITDA, EVA, etc., which synthetically reflects activities at various levels, f) the payment of bonuses to everyone should be dependent on the implementation of a certain general synthetic indicator, such as: the overall result of the enterprise.?Limitations. There is a study and critical analysis of the selected publication, limited to the SCOPUS database.?Originality/value. Supplemented literature by guidelines the determination of KPIs for employees.