Key Performance Indicators (KPI): A Commentary

The companies Act 2006, section 417(6) defines KPIs as means of “…reference to which the development, performance or position of the business of the company can be measured effectively”. Put another way, KPIs, whether financial or non financial, help gather information when evaluating a company‟s success in reports on performance. KPIs should measure particular activities in which a company is engaged. This could be decided on the basis of achievement of predefined targets, the repeated periodic status of operational objectives, or the measurement of progress towards strategic goals. KPIs may be short or long-term: strategic; departmental or corporate. „Quantitative‟ or „qualitative‟ indicators can be presented with a number; „leading‟ indicators are designed to predict future outcomes; „process‟ indicators measure efficiency and so on.