Introduction. 🚀

People KPIs (Key Performance Indicators) measure how effectively an organization supports its employees. Unlike traditional KPIs, which focus on operational or financial metrics (e.g., achieving $5 million in profit), People KPIs track aspects like employee well-being. For instance, with Zoios, you might measure improvements in your company well-being score or the recognition driver, aiming for a score of 75 or 80. In this guide, we help you decide whether (and how) you should implement a People KPI in your organization and/or for the managers.

<aside> In this guide, we cover:

1. Why you should consider it
2. A case example **of how to do it
3. Potential challenges to be aware of
4. How to mitigate the potential challenges
5. An FAQ if you're still unsure how to proceed </aside>

Why You Should Consider Implementing People KPIs. 💪

1. What you measure is what you get: Focusing on well-being as a KPI encourages managers to prioritize it, leading to tangible improvements in employee satisfaction and morale.
2. Balanced success: In challenging times, People KPIs remind managers to maintain a balance between business goals and employee well-being, reducing the risk of neglecting the latter under pressure.
3. Accountability for well-being: By evaluating managers on their People KPI results, you incentivize them to cultivate a sustainable work culture, aligning team well-being with overall performance.

Case Example: How to Implement People KPIs. 🙌

Imagine an organization with 150 employees. Here’s how you might implement People KPIs:

• Context: The managers are "too busy" balancing high-priority business goals and KPIs, which results in less focus on team well-being. The organization is losing key employees, with exit interviews (and the well-being data) highlighting lack of recognition and development as major issues.
• KPIs: The organization decides to track each team’s well-being scores (with a focus on recognition and development).
  • Each manager decides (in collaboration with People and Culture) a team-specific goal to aim for within the next quarter, based on their team's baseline scores and company-wide benchmarks.
  • On a company level, the goal is set to reach 78 on recognition and 77 on development by the end of the year.
• Manager Evaluation: During performance evaluations for managers, they include a discussion on these People KPIs for their respective teams. They review how the well-being metrics have evolved over time, and use this as a foundation for a constructive dialogue - they take context into account, e.g. if something particular outside the manager’s zone of influence has happened in the past months.

Potential Challenges to be Aware of. ☝️

1. External factors: Some elements of well-being may be beyond a manager’s control, such as personal life challenges like divorce or illness.
2. Excluding low-scorers: A manager might not encourage sceptical employees or employees with lower well-being to answer because they know it will lead to worse results.
3. Avoidance of difficult conversations: Managers may avoid difficult and honest conversations with employees because they fear their scores will be negatively impacted by it in the short term.