What separates a KPI system people work by from one that gets filled in quarterly and forgotten.
A performance system changes behaviour only when a specific person can name an action that will move their number this week. Without such an action, the measure stays a report.
Two practical rules follow. First: a measure needs one owner, not a committee. Second: the horizon of influence must be shorter than the horizon of review — otherwise nobody sees the link between effort and result.
A common mistake is to set weights by importance to the company rather than by controllability for the employee. Half the bonus then depends on things the person cannot affect, and the incentive stops working as an incentive.
Quantity matters too. More than five measures per person means none of them is a priority.
- One owner per measure beats collective responsibility
- Weights should follow controllability, not importance
- More than five measures per person devalues all five