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Sustainability and Key Performance Indicators (KPIs)

http://csrmanual4food.files.wordpress.com/2013/03/csr-commitment_large.jpg When it comes to sustainability companies need to understand the Key Performance Indicators (KPIs) in their company that target certain subjects they are looking to develop and manage.  A KPI can be defined as providing the most important performance information that enables organizations or their stakeholders to understand whether the organization is on track or not. For example, your business has internal processes that have to work well if the company is to be successful. Companies with superior organizations and operations typically have high levels of variables such as employee satisfaction, product quality and employee training. To track these variables, you have to identify factors that influence them. Employee retention and length of service are KPIs for employee job satisfaction. Product returns and final production test pass rates are KPIs for product quality. Number of employees signed up for training is a KPI for training levels. When you track such KPIs and work to improve them, the performance of your business improves as well. The KPI report gives summary and detailed information on how well or poorly these areas perform. These reports come in many forms–from handwritten reports to very sophisticated computer generated reports with multiple charts and graphs. The best KPI report provides accurate data information and actionable feedback for the user.

Companies are starting to look at Sustainability and CSR policies which refer to long-term maintenance of responsibility, that have environmental, economic and social dimensions. These Sustainability KPIs are reflective of Sustainability areas of interest, and are grouped into subcategories, such as Recycling, Energy Resources, Waste Management, Water Quality, Soil Pollution, Air Quality, Purchasing Analysis and Community Service Initiatives. Sustainability KPIs provide quantifiable measurements of factors determined to be important for the successful implementation of Sustainability strategies and aid in Sustainability Management.

Three reasons for measuring performance are:

  •  * To learn and improve
  •  * To report externally and demonstrate compliance
  •  * To control and monitor people

The most useful KPIs relate to your company’s objectives. When you analyze your goals for the factors that determine success, you have an indication of where to find KPIs that show you how well your company is performing and meeting its targets. Implementing such a KPI system gives you immediate feedback on problems with your strategies and allows you to make quick adjustments when necessary.

It is said that what gets measured, gets done. KPIs help you to define and measure progress toward achieving your organizational objectives. They give all organizational members a clear picture of what is important and what they are required to do to accomplish set objectives. You can use KPIs to motivate your employees toward achieving organizational objectives. Used as benchmarks, They can help you compare organizational performance with rival organizations in the same sector.

There are no ready-made KPIs that fit to all organizations, because they vary from sector to sector and from organization to organization. Thus, deciding which KPIs to use is vital for effective analysis. As you can’t measure every activity or transaction that your business performs. To set appropriate KPIs, you must identify factors that are specific, measurable, achievable, realistic and timely, or SMART. This means that your KPIs must be directly identifiable to your business and its nature. They also must be easily calculated. The factors should be logically within your reach and, therefore, must be realistic and not idealistic. And finally, the factors should be achieved within a specified period.

KPIs can be implemented to any part of an organization but are key to transparency and accountability for programs and policies, as well as, work on helping to develop the image and branding of a company through CSR.


This article was written by: mayacamou

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