![\"Set](\"https:\/\/clockify.me\/blog\/wp-content\/uploads\/2025\/05\/Set-KPIs-That-Drive-Results-\u2014-Strategy-Examples-and-Tips-cover.jpg\")
<\/figure>\n<\/div>\n\n\nKPI definition \u2014 what are Key Performance Indicators?<\/h2>\n\n\n\n
Key Performance Indicators (KPIs) are quantifiable measures that show your performance against a specific goal or target. <\/strong>KPIs can track the performance of an individual, a team, or an entire company.<\/p>\n\n\n\n Track your KPIs now<\/a><\/p>\n\n\n\n For example, a streaming service like Netflix might set a goal to get 500,000 new subscribers by the end of the quarter. In this case, the number of new subscribers<\/em> is the KPI.<\/p>\n\n\n\n By tracking this metric, the company can see if it\u2019s more or less likely to hit its quarterly target. Together with other KPIs, Netflix can also use such data to answer fundamental business questions, such as:<\/p>\n\n\n\n So, which KPIs should you track? That depends on various factors, including the specifics of your business and industry.<\/p>\n\n\n\n Let\u2019s explore some of the different types of KPIs.<\/p>\n\n\n\n Economists and managers group KPIs according to various criteria. The 2 most common ones are:<\/p>\n\n\n\n We\u2019ll explain both below.<\/p>\n\n\n\n While a (well-run) company has a unified business vision, individual departments and employees have different goals and measures of success. This also means that Netflix\u2019s CEO and software engineering department track different KPIs. <\/p>\n\n\n\n Based on organizational scope, we divide KPIs into:<\/p>\n\n\n\n You can also classify KPIs by the value they bring to your company.<\/p>\n\n\n\n Based on how they help the organization, we can divide KPIs into 5 types:<\/p>\n\n\n\n This distinction is useful in management frameworks like balanced scorecards<\/a>, which require a combination of financial and non-financial KPIs. <\/p>\n\n\n\n Track projects & tasks with Clockify<\/a><\/p>\n\n\n\n Now that you understand KPIs and their different types, let\u2019s examine how to set KPIs and apply them in practice.<\/p>\n\n\n\n Before creating any KPIs, start by clearly defining the business objectives they will measure. For instance, having a higher market share <\/em>is a business objective you want to achieve, and current market share<\/em> is the KPI you\u2019d measure to check your progress. <\/p>\n\n\n\n Each company operates in a specific market environment, so you can\u2019t just copy KPIs from others. Adidas and Nike are both huge sports apparel brands and direct competitors, but they often measure different KPIs. <\/p>\n\n\n\n Your KPIs should be specific to your organization and directly tied to your success. <\/strong>Otherwise, you\u2019re probably wasting time and resources without achieving anything meaningful.<\/p>\n\n\n\n For example, you may want to improve your employees\u2019 productivity. In this case, your business objective is to reduce the time spent on each task<\/em> without compromising quality. <\/p>\n\n\n\n \ud83d\udca1 CLOCKIFY PRO TIP<\/strong><\/p>\n\n\n\n Need help setting daily goals and hitting them consistently? Check out this guide on setting and reaching daily targets:<\/p>\n\n\n\n Now that you\u2019ve set clear and relevant objectives for your company, it\u2019s time to link them to your KPIs. <\/p>\n\n\n\n Each KPI should be connected to a specific goal and help you reach it. Also, individual employees shouldn\u2019t track too many KPIs, or their productivity will be far from optimal. <\/p>\n\n\n\n Here\u2019s what Jensen Savage<\/a>, the founder and CEO of a digital marketing agency, thinks about setting the right number of KPIs: <\/p>\n\n\n\n \u201cIn my experience, 3 to 5 KPIs per team or employee is the sweet spot. It\u2019s enough to offer meaningful insight without creating KPI overwhelm. When teams track too many metrics, I’ve found that focus becomes fractured, which impacts performance as a whole.\u201d<\/em><\/p>\n<\/div>\n<\/div>\n\n\n\n In our productivity example, we\u2019ll keep things simple \u2014 each employee could track the time spent on daily tasks, and managers can track the total time for their teams. <\/p>\n\n\n\n Ironically, noting the time you spend on each task may seem time-consuming, but only if you do it manually. You and your team can use a free tool like Clockify by CAKE.com<\/a> to simplify time tracking. <\/p>\n\n\n In Clockify<\/a>, you and your staff just start a timer when you begin working on a task, and stop it once you\u2019re done. <\/p>\n\n\n\n Based on data from the timer, Clockify automatically fills in timesheets for each employee. <\/p>\n\n\n With Clockify, you can track your team\u2019s productivity without increasing anyone\u2019s workload. That way, you get a happy workforce that\u2019s laser-focused on reaching company objectives.<\/p>\n\n\n\n Track productivity with Clockify<\/a><\/p>\n\n\n\n \ud83d\udca1 CLOCKIFY PRO TIP<\/strong><\/p>\n\n\n\n Need help figuring out your priorities and managing your time better? Check out this blog on a practical method for improving your time management:<\/p>\n\n\n\n To see if you\u2019re achieving your goals, you first need to define what success looks like. This means identifying the key measurable results tied to your business objective. <\/p>\n\n\n\n In our productivity example, success might look like:<\/p>\n\n\n\n Once you\u2019ve defined your success criteria, the next step is to decide how you\u2019ll measure them.<\/p>\n\n\n\n \ud83d\udca1 CLOCKIFY PRO TIP<\/strong><\/p>\n\n\n\n Struggling to measure team productivity properly? Here\u2019s a guide detailing 8 proven methods of tracking staff productivity:<\/p>\n\n\n\n Once you\u2019ve set your success criteria, it\u2019s time to decide how you\u2019ll measure them in practice. Research suggests visual breakdowns of KPIs help companies make timely and informed decisions<\/a>. <\/p>\n\n\n\n In our previous example, the appropriate performance metrics would be:<\/p>\n\n\n\n Clockify by CAKE.com automatically generates visual reports showing both metrics for each employee and team. <\/p>\n\n\n The summary report shows how much time your team spent on every project and task. For a more detailed breakdown of tasks per employee, you can also check out the assignments report.<\/p>\n\n\n In the assignments report, you can easily see: <\/p>\n\n\n\n Clockify updates these reports in real time, so you can always check your progress towards KPIs. <\/p>\n\n\n\n\n
What are the different types of KPIs?<\/h2>\n\n\n\n
\n
Type #1: KPIs based on organizational scope<\/h3>\n\n\n\n
\n
Type #2: KPIs based on contribution to the organization<\/h3>\n\n\n\n
\n
How do you set KPIs?<\/h2>\n\n\n\n
Step #1: Define business objectives for your KPIs<\/h3>\n\n\n\n
\n
Step #2: Link your objectives with your KPIs<\/h3>\n\n\n\n
![\"Jensen](\"https:\/\/clockify.me\/blog\/wp-content\/uploads\/2025\/05\/Jensen-Savage.jpeg\")
<\/figure>\n<\/div>\n\n\n\n![\"timer](\"https:\/\/clockify.me\/blog\/wp-content\/uploads\/2025\/05\/timer-in-clockify.png\")
![\"timesheets](\"https:\/\/clockify.me\/blog\/wp-content\/uploads\/2025\/05\/timesheets-in-clockify.png\")
\n
Step #3: Define success<\/h3>\n\n\n\n
\n
\n
Step #4: Decide how you will measure success<\/h3>\n\n\n\n
\n
![\"summary](\"https:\/\/clockify.me\/blog\/wp-content\/uploads\/2025\/05\/summary-report-in-clockify.png\")
![\"assignments](\"https:\/\/clockify.me\/blog\/wp-content\/uploads\/2025\/05\/assignments-report-in-clockify.png\")
\n