4.3 - Key performance indicators

Question 1

What are KPI’s

Answer 1

Key Performance Indicators are specific criteria used to measure the extent to which a businesses has achieved its objectives.

Question 2

What is effectiveness

Answer 2

is the degree to which a business has achieved its stated objectives.

Question 3

What is efficiency

Answer 3

refers to how well a business uses resources to achieve objectives. Usually involves reducing costs, waste or reducing time taken to produce

Question 4

What is strategic management

Answer 4

The long-term planning undertaken by senior management in a business in response to key performance indicators that usually results in changes being introduced in order to improve business performance and achieve business objectives.

Question 5

What is benchmarking

Answer 5

a process in which a business measures its performance against that of other leading businesses known for their excellence OR against previous performance or industry averages.

Question 6

What is competitive advantage

Answer 6

is where one business is in a more favourable position, relative to its rivals and becomes more popular with customers due to lower cost or differentiation. Businesses can compete on cost/quality or speed of delivery.

Question 7

Examples of KPI’s

Answer 7

percentage of market share, net profit figures, rate of productivity growth, number of sales, rates of staff absenteeism, level of staff turnover, level of wastage, number of customer complaints, number of website hits, and number of workplace accidents

Question 8

What are net profit figures

Answer 8

is a financial indicator that measures the difference between revenue and expenses over a particular period of time.

Question 9

What is percentage increase in market share

Answer 9

measures the proportion of the total sales within a given industry in relation to its competitors, that a business controls, expressed as a percentage within a given period of time.

Question 10

What is rate of productivity growth

Answer 10

measures the businesses efficiency in its use of resources or time to create a greater number of outputs by using less inputs or time compared to the past periods performance.

Question 11

What is number of sales

Answer 11

measures the number of products sold or services provided to customers within a given period of time.

Question 12

What is rate of staff absenteeism

Answer 12

measures the number of days that employees are scheduled for work but do not attend.

Question 13

What is level of staff turnover

Answer 13

measures the number of staff who leave the business and are replaced over a given period of time

Question 14

What is level of wastage

Answer 14

measures the amount of unusable materials created that are not converted to outputs during the production process

Question 15

What is number of customer complaints

Answer 15

the number of negative written or verbal comments made by the purchasers of goods or services and reported to management to indicate their level of dissatisfaction with the performance of the business.

Question 16

What is number of website hits

Answer 16

Number of Website Hits measures how many times people or potential customers have sent a request to a web server by visiting a businesses website or responding to social media.
The data can be measured as the number of visitors, the average time spent on the website, the number of first-time visitors vs return visitors and shows the effectiveness of marketing campaigns and the amount of interest/loyalty that can be generated with the public using online strategies.

Question 17

What is number of workplace accidents

Answer 17

the number of interruptions to workflow caused by injuries or property damage sustained during the production process

Question 18

What to put in a answer on how to analyse KPI’s

Answer 18

Describe the KPI/blend definition with your description of the change in data, Assess whether the data has decreased/increased, improvement is weak/poor/improved/strong/successful, Outline factors that could have led to the poor performance – high staff turnover or a poorly managed merger. (you can make assumptions),
Link to case study info/any changes introduced (what are you measuring?)