A KPI is a key performance indicator: a number the employee can change through their own actions, connected to a business objective. The word "key" carries the weight — dozens of things can be measured, but only a handful actually steer the result.
Why KPIs usually fail
Three typical reasons. The indicator does not depend on the employee — a sales assistant is bonused on store revenue they cannot move. There are too many — with ten KPIs a person does not know what to look at and carries on as before. The data is compiled by hand — the bonus arrives a month later with no explanation, so the link to the action is lost.
Hence a simple test: the employee should be able to name their indicators, say which action raises them, and see the current value themselves. If any of the three fails, the KPI exists only in the bonus order.
How to choose an indicator
A good KPI satisfies four requirements at once — which rules out most candidates.
- Controllability: the result depends on this employee's actions, not on the season, the exchange rate or the next department's work.
- Measurable from a system: the value is taken from records automatically rather than set by a manager's impression.
- Count: two to four indicators per role. More cannot be held in mind and dilutes the priority.
- Gaming resistance: an indicator needs a counterweight — speed without quality, or revenue without returns and write-offs, turns into a loss quickly.
How this works in Verifix
In Verifix Perform KPIs are computed from data the system already holds: hours from the timesheet, completed tasks and checklists, figures from POS and ERP integrations. The value updates itself, so the employee sees it in the app during the period rather than after it closes.
The indicators then connect to pay and growth: the bonus component reaches the payroll sheet through the calculation, and period results accumulate into the history that performance reviews and grade decisions rest on.
In short
A KPI works when the employee can name their indicator, knows the action that raises it, and can see its current value without asking accounting.