What is a Key Performance Indicator (KPI)?

• A. Key Performance Indicator; a measurable value that demonstrates how effectively objectives are achieved.
• B. A strategic goal.
• C. A type of performance review.
• D. An HR policy document.

Answer: (A)

A KPI is a measurable value that shows how effectively an objective is being achieved. It serves as a concrete metric tied to a goal, allowing you to track progress, compare performance over time, and make informed decisions. For example, tracking quarterly sales growth, on-time delivery rate, or customer satisfaction scores turns abstract goals into something you can monitor and improve.

This isn’t a strategic goal itself; it’s the measurement used to gauge progress toward that goal. It isn’t a type of performance review, though KPIs can be part of performance assessments. It also isn’t an HR policy document, which would outline rules and procedures; a KPI is a performance metric.