Analyzing Key Performance Indicators (KPIs) for Organizational Success

This report, prepared for an Advanced National Diploma in Human Resource Management, analyzes the implementation and impact of Key Performance Indicators (KPIs) on organizational performance. It examines the use of KPIs in three different companies: DSI (footwear manufacturing), MAS Holdings (apparel manufacturing), and Sri Lanka Telecom. The report provides introductions to each company, followed by specific KPI examples for their respective departments, including Marketing & Sales, Production, and Service departments. It outlines goals identified for strategic, managerial, and operational employees, along with measures and targets. The report also details the importance of KPIs for organizations, highlighting how they facilitate performance measurement, goal achievement, and better decision-making. The assignment covers financial and non-financial indicators, emphasizing the selection of appropriate metrics and the importance of customer orientation in a competitive global environment.

Advanced National Diploma in Human Resource
Management
National Institute of Business Management –
Galle
“Key Performance Indicators
Implemented in Organization
performance”
GAANHRM192F-004 E.G.Maleesha
Sherandhi

18/07/2020
Date of Submission
ABSTRACT
Key Performance Indicator (KPI) are financial and non-financial
indicators that organizations use in order to estimate and fortify how
successful they are, aiming previously established long lasting goals.
Appropriate selection of indicators that will be used for measuring is of a
greatest importance. Process organization of business is necessary to be
constitutes in order to realize each efficient and effective system or
performance measuring via KPI. Process organization also implies customer
orientation and necessary flexibility in nowadays condition of global
competition.
Performance Indicators or KPI’s are important in estimating the
performance of the organization as well as the individuals. This assignment
estimates KPI performance in 3 different organizations, using suitable
examples.

TABLE OF CONTENT
1.0 Introduction to KPI……….…………………………………………….04
1.1 Importance of KPI to organization………..
………………………..04
2.0 DSI company (PVT)……………………………………………………05
2.1 Introduction to the company…………………………………….
….05
2.2 KPI for Marketing & Sales Department………..………….…….
…05
2.3 Goal identified for Strategic
Employees……………………………05
3.0 MAS company (PVT)………………………………………………….08
3.1 Introduction to company……...……………………………………
08
3.2 KPI for Production Department……………………………………
08
3.3 Goals identified for Managerial Employees...
……………………..08

4.0 Sri Lanka Telecom (PLC)……………………………………………..11
4.1 Introduction to company……………………………………………
11
4.2 KPI for Service Department …………………….
………………….11
4.3 Goals identified for Operational
Employees………………………..11
5.0 References……………………………………………………………..12
1.0 Introduction to KPI
Organizations perform all activities and operations within a framework,
which are built on its vision and mission. The performance of each
activity and operation can be measured using Key Performance Indicators
(KPI), which indicate the organization’s success in achieving is strategic
objectives. KPI is widely used not only by profit-oriented organizations but
also by non-profit organizations such as government agencies.
Each organization should measure its performance in terms of
achieving its goals. This measurement is intended to access both
qualitatively and quantitatively, all the activities have been performed.
Framework for the assessment includes effectiveness and efficiency in
optimizing the use of available resources. Using the framework the
organization can strive to improve the performance.
An indicator or more precisely a Key Performance Indicators (KPI) is
an industry term for a measure or metric that evaluates performance
with respect to some objectives. Indicators are used routinely by

organizations to measure both success and quality in fulfilling strategic
goals, enacting process or delivering products or services.
1.1 Importance of KPI for Organization
A Key Performance Indicators (KPI) is a measurable value that
illustrates how effectively an organizations use KPI to monitor their
success at reaching targets. KPI help evaluate an organization’s process
in accomplishing key objectives, these metrics are used at all levels,
helping executives, managers and employees identify where
improvements can be made. KPI leads to better decisions and more
effective goal execution. The most essential KPI is revenue, but many
others can be used based on an organization’s primary goals.
KPI are important to business objectives because they keep
objectives at the forefront of decision making. It’s essential that business
objects are well communicated across an organization, so when
employees know and are responsible for their own KPIs, it ensures that
the business’s overarching goals are top of mind.
A KPI measures the goals of the business against the actual,
quantifiable data over a specified period. Performance Indicators form an
importance part of the information required to determine and explain
how an organization will progress to meet its business goals. KPI also
ensure that performance is measured not blindly in pursuit of the KPI but
in relation to the larger business objectives. This means that every part of
work is done with intentionality and for the right purpose.
2.0 DSI private limited Company (PVT)
2.1 Company Introduction
DSI is a leading manufacturing and exporting of footwear in Sri
Lanka. D Samson Industries (DSI) the first Shoe Manufacturing Plant in Sri
Lanka was established in 1962. The company produces more than 60,000
pairs of footwear per day and has a workforce of 1500 employees. The
pioneer establishment of the DSI Samson Group and market leader for
footwear in Sri Lanka, DSS is the sole distributor for own branded apparel,
footwear as well as international footwear brands. DSS operates 200

company managed showrooms and services over 4000 dealers and 50
sales.
2.2 KPI for Marketing & Sales in DSI (Apparel Industry)
Marketing and Sales performance indicators help an apparel
company to judge the success of pricing strategy and marketing campaigns.
With the popularity of e-commerce and online retailers, it’s easier that every
get quantifiable data. Apparel companies looking to expand into a new
customer base can evaluate the percentage of unique visitors versus
returning visitors on their websites. Retailers can set goals and measure the
conversion rate of visitors at footwear stores.
2.3 Goals identified in year 2020 as an outcome of a goal process
carried about by Marketing Department for the Strategic level
Employees. The goals are mentioned as below.
 Increased qualified leads by 20% over the next 06 months
 Achieve order fulfillment excellent through online process
improvement.
 Improve Employee satisfaction by 10% (72-82) by end of 4th
quarter 2020.
 Reduce Marketing Department supply cost by 12% by end of 2nd
quarter of 2020.
2020 DSI Apparel Industry - KPI for Marketing
Department

Strategic Employee Positions – Director of Marketing/ Marketing Managers /
Senior Executive
Department – Marketing & Sales
Dep. Number – 00088-2800
Branch – Matara / Galle
Strategic
Objectives
Long -Term
1 Year- Goals Measure
s
Targets
01) Increased qualified leads by 20% over the next 06 months
Increase
Revenue
-Realize 5% of the company’s
annual sales from small
business market by end of next
year 2021.
Number of
small
business
clients
200 Clients
-Reduce the number of returns
due to shipping errors from 3%
to 2%.
Number of
returns due
to shipping
errors.
2%
-Increase billable hours by 10%
hour over the next 12 months.
-Percentage of site visitors that
convert to qualified leads in
February to March (Average
pages per visitors compared to
previous period)
Number of
Billable
Hours
1.2% for
each
month
02) Improve Employee satisfaction by 10% by end of 4th quarter
2020.
Employee
Satisfaction
-Provide employees with
challenging rewarding works
through implementing action
plans.
-Resurvey employees to assess
effectiveness of action plan.
Schedule
Completion
Date
Score of 82
–Increase of
10%
100
Employees
(January
1st)
January 15th

(72-82/100)
-Develop action plan to address
issues
-Identify employee issues
Final Action
Plan
Focus group
feedback
February
10th
March 15th
-Reduce Employee turnover
among sales managers by 10%
by the end of year.
Employee
Turnover
10%
(April 1st)
Hire and Train a human
relations director by the end of
year.
(This indicator shows the
percentage of employees who
stay in the organization after
the trail period)
Director
Hired
Achievemen
t
(July 1st)
Improve the punctuality of the
attendance by maintaining the
delay in daily attendance below
the stipulated levels & Increase
promotion rate
0-5 = 24
0>5 =12
Monthly
rate
85%
(September
1st)
03) Achieve order fulfillment excellent through online process
improvement.
Online Process
Improvement.
-100,000 website page-views
150% increase in overall site
traffic resulting in 87 additional
contacts to the sale teams.
Time on
Site
(TOS)
November
30th
-100 Online demo request
100 qualified leads initiated
contact with the sales team,
requesting in the potential of
10M in new revenue
Conversati
on
Rate
July 28th
-1M people reached via the
Social Media
Number
of
visitors
December
31st

Social brand exposure drove
10,000 unique visitors to
Company website and
generated 500 new sales leads.
3.0 MAS Holdings private limited Company (PVT)
3.1 Company Introduction
MAS Holdings is South Asia’s largest manufacturer of lingerie. The
company was founded in 1987 by Mahesh, Sharad and Ajay Amalean. MAS
Holdings began as an intimate apparel manufacturer and later diversified
into Sportswear, performance wear and Swimwear. The company
manufactures apparel accessories and fabric and also provides services
beyond apparel manufacturing. MAS Holdings’ current portfolio encompasses
businesses in IT, brands and industrial parks.
3.2 KPI for Production Indictors of MAS (Garment Industry)
Apparel companies that manufacture products should routinely
evaluate production indicators. Standard costing indicators help apparel
manufactures understand variances in production costs, quantity and
quality. Companies can measure the amount and cost of the machine hours
they used to create their products. They can measure the average defect
rate per product to identify areas of weaknesses. Purchase price variances
can help managers identify where cheaper raw materials may result in lower-
quality apparel products.
3.3 Goals identified in year 2020 as an outcome of a goal process
carried about by Production Department for the Managerial level
Employees. The goals are mentioned as below.
 Improve line efficiency and Factory efficiency 15% end of 2020

.
 Increase the labor productivity of employees & Individual
operator efficiency within next 06 months period.
 Improve on Time Sample Submission rate.
 Reduce Sample Rejection rate from 5% to 2.5%
2020 MAS Garment Industry - KPI for Production Department
(Sewing- Swimsuit)
Managerial Employee Positions – Line service Manager / Area Operation
Executive / Head of
Sewing Operator
Department – Production – Sewing Department
Dep. Number –100011-225
Branch – Battaramulla / Koggala
Strategic
Objectives
Long -
Term
1 Year - Goals Measured Target
01) Increase the labor productivity of employees & Individual
operator efficiency within next 06 months period.
Improve the
labor
productivity.
-Implement/ Conduct regular
performance appraisal using
numerical rating scale, Involve
rating to 1 – 5 or 1 -10.
Scale rating
200
employees
Evaluate
end of each
month
(1st -31st)
- Create spreadsheet with all
departments supply items.
Completion
by due to
date
March 15th

- Meet with department
employees, identify
unnecessary supplies and
prioritize supplies to cut.
Employee
supply list to
cut submitted
to manger
April 1st
- Monitor monthly supply
spending the 90 days.
90 day report
submitted to
manager.
June 30th
- Compare production supply
spending to budget reduction
Decrease
10%
January 1st
02)Reduce Sample Rejection rate from 5% to 2.5%
Reduce
Rejections
- Set standard operating
producers (SOP) for each task
performed by the employees.
SOP for quality control
for each production
department
100 < 5
100-200<8
(Sample)
2% of
production( e
ach month
onward)
-Reduce rate of rejection of
grinding marks from 2.8% -
0.5% Mark observed on
material during grinding
process which dissatisfied the
buyer/client
In visual
inspection
Grinding
mark should
not on
piston.
Total
rejection
parts*100/
Total reduce
parts
Monitor
monthly
rejection rate
(%)
-Get cart abandoners to
convert/ Bring cart
abandoners back into the
sales funnel
Number of completed orders
per total number of
abandoned orders (Desired
amount 50%) & Returns to
product pages per total
number of abandoned orders
(Desired amount 20%)
Visit to
confirmation
pages in a
cohort of
previous
abandoners.
50% - 30%

03)Improve sewing-line efficiency and Factory efficiency 15% end of
2020
Improve
efficiency
- Develop operator’s sewing
skills 5% through training on
the job. Train them on good
movements, correct material
handling and better method of
performing job.
Evaluate on
end of the
training.
Individually
end of
session (%)
- Motivate operators by
providing incentives based on
their performance (Efficiency-
Level)
Scale
rating
1st Monday
of each week
to each
month
-Decrease staff turnover <
30% & improvement in staff
engagement in > 10%
Quality
Accuracy &
Problem
Solving
>30%
<10% in
each quarter
4.0 Sri Lanka Telecom (PLC)
4.1 Company Introduction
Sri Lanka Telecom (SLT) is the national telecommunication
services provider in Sri Lanka and one of the country largest companies with
an annual turnover in excess of 40 Billion. The company provides domestic
and corporate services which include fixed and wireless, Internet access and
IT services to domestic, public and business sector customers. Sri Lanka
Telecom is the nation’s number one integrated communications service
provider and the leading broadband and backbone infrastructure services
provider in the country. The SLT group provides full range of ICT facilities and
services in the areas of voice, data, broadband, wholesale, enterprise TV and
mobile services.
4.2 KPI for Service Department of Sri Lanka Telecom (SLT)

Customer Service KPI or metric is a performance measurement
that is used by customer service teams and by the customer support
management to monitor, visualize, analyze and optimize customer relations
by taking advantages of an advanced 360-degree customer view. Customer
support metrics and KPI are valuable because they provide a look behind the
scenes at how business interact with the customer. The performance metrics
provide unbiased numbers for company to measure customer service
success.
Identifying and measuring the right customer service KPIs or
metrics help businesses to monitor and analyze customer relations by
considering company overall journey. Below is a list of importance KPIs for
customer service evaluation and acquiring actionable feedback.
4.3 Goals identified in year 2020 as an outcome of a goal process
carried about by Service Department for the Operational level
Employees. The goals are mentioned as below.
 Improve efficient and quick conversation between customer
and company.
 Reduce complaints rude employees by 90%

 Increase customer acquisition
 Improve customer satisfaction scores by 10% over the next
quarter.
2020 Sri Lanka Telecom - KPI for Service Department
(Mobile)
Operational Employee Positions –Telecom Network Engineer / Technical
Officer / Call executive officer
Department – Service (Mobile)
Dep. Number –21100 - 288

Branch – Colombo / Kandy
Strategic
Objectives
Long-Term
1 Year - Goal Measure
d
Target
01) Improve customer satisfaction scores by 10% over the next
quarter.
Improve
Customer
Satisfaction
- Improve representative
satisfaction by 10% by next
quarter. Happy representative
will lead to better for customers
and less churn.
Representativ
e satisfaction
measured
regularly by
internal
surveys.
1.2% for
each month
-Increase the employees who are
underperforming and put a plan
in place to help them become
better representative.
Send NPS
surveys to
customers
Monthly
Improve number of “Fully
Satisfied” customer ratings of the
support they received by 10%
over the next quarter.
A fully
satisfied or
rating on a
post support
survey.
Weekly of
daily
customers
Increase number of new paying
customers by 50%
Conversion of
new contact
within 2
months
50%
Increase number of former
paying customer by 25%
Renewing of
previously
relationship
that were
inactive
25%
Improve inventory terms Number of
inventory per
year
4-6
(Monthly)
02)Increase customer acquisition within 06 month time period
Increase -Increase customer acquisition Customer 100%