Key non-financial performance measures for business organizations

by meziesblog.com, posted in Articles
business trends Irobiko Chimezie
man drawing schedule of business growth

Examples Of Non-Financial Performance Measures

Taking the Balanced Scorecard approach, there are four perspectives involved in strategy management: customer, internal processes (operations), learning and growth (HR), and financial. Below are 15 examples of performance KPIs, organized by the three non-financial perspectives:

Customer

  1. Conversion Rate: The percentage of interactions that result in a sale. Formula: (Interactions with Completed Transactions) / (Total Sales Interactions) = (Conversion Rate)
  2. Retention Rate: The portion of consumers who remain customers for an entire reporting period. Formula: (Customers Lost in a Given Period) / (Number of Customers at the Start of a Period) = (Customer Retention Rate)
  3. Contact Volume By Channel: The number of support requests by phone and email. This allows the organization to not only compare which method customers prefer, but also to track the number of support requests month-to-month.
  4. Customer Satisfaction Index: Gauge of a company’s success at meeting customers’ needs.
  5. Net Promoter Score: The likelihood that customers will recommend a brand to others. A score from 1-10 that qualifies promoters (usually 9-10) and detractors (under 6). Formula: (Number of Promoters) – (Number of Detractors) = (Net Promoter Score)
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Internal Processes

  1. Customer Support Tickets: The number of new tickets, the number of resolved tickets, and resolution time.
  2. Product Defect Percentage: This will give you the percentage of defective products in a specified timeframe. Formula: (Number of Defective Units in a Given Period) / (Total Number of Units Produced in a Given Period) = (Product Defect Percentage)
  3. On-Time Rate: The percentage of time products were delivered promptly as scheduled. Formula: (Number of On-Time Units in a Given Period) / (Total Number of Units Shipped in a Given Period) = (On-Time Rate)
  4. Efficiency Measure: Efficiency can be measured differently in every industry, so this common KPI will vary. For example, the manufacturing industry can measure efficiency by analyzing how many units are produced every hour and the plant’s uptime percentage.
  5. Overdue Project Percentage: The number of projects that are late or behind schedule. This can be pulled from your project status dashboard. Formula: (Number of Overdue Projects in a Given Period) / (Total Number of Projects in a Given Period) = (Overdue Project Percentage)

Learning & Growth

  1. Salary Competitiveness Ratio (SCR): The competitiveness of compensation options. Formula: (Average Company Salary) / (Average Salary Offered from Competitors (or Average Salary Offered by Industry)) = (SCR).
  2. Employee Productivity Rate: Workforce efficiency measured over time. Formula: (Total Company Revenue) / (Total Number of Employees) = (Employee Productivity Rate).
  3. Turnover Rate For Highest Performers: The success of retention efforts for top performers and plans for talent replacement. Formula: (Number of High Performers Who Departed in Past Year) / (Total High Performers Identified) = (High Performer Turnover Rate).
  4. Average Time To Hire: The efficiency of the hiring process measured by time to recruit, interview, and hire.
  5. Internal Promotion Rate: The successful retention and growth of top performers. (The Number of Promoted Individuals) / (Total Number of Employees) = (Internal Promotion Rate).

Remember to track the non-performance measures that best fit your organization’s needs. There are hundreds of KPIs to choose from—focus on the ones that make the most sense for your strategy.