PERFORMANCE MANAGEMENT BASED ON KEY PERFORMANCE INDICATORS (KPI)

Abstract

Key success Indicators (KPIs) are an important part of modern tools for managing success. This study looks at how well they work and what they add to company responsibility, strategic unity, and daily efficiency. A quantitative poll was used to get information from 312 workers and HR professionals in service-sector companies. A study used multiple regression analysis and structural equation modelling (SEM) to look at how KPI definition (β = 0.24, p < 0.001), measurability (β = 0.19, p < 0.001), and strategic alignment (β = 0.41, p < 0.001) affected employee performance. The model described half of the differences in how well people did (R² = 0.5). The results show that KPIs that are carefully linked are the best way to predict success. But signs that weren't well thought out were linked to less innate drive, focus on metrics, and reward systems that weren't matched. This study adds to the body of HRM knowledge by showing that KPIs are more than just ways to judge performance; they are also smart tools for changing people's behavior that affect responsibility, drive, and the efficiency of a company. There are real-world effects for HR managers who want to build evaluation systems that are more consistent and goal-based.