What are Key Performance Indicators (KPIs)?

Key Performance Indicators (KPIs) are defined as measurable values that demonstrate how effectively a company is achieving its key business objectives. Organizations use KPIs to evaluate their success at reaching targets, which can relate to various aspects of business performance such as financial health, operational efficiency, customer satisfaction, and employee engagement.

The essence of KPIs lies in their quantifiable nature, allowing businesses to track performance over time and make informed decisions based on data. This focus on measurable values makes KPIs essential tools for strategic planning and performance management, as they provide insights into both progress and areas needing improvement.

The other choices touch on aspects related to business performance or operations but do not encapsulate the concept of KPIs. Costs incurred focus on financial metrics but do not address overall effectiveness. A method for assessing employee satisfaction is a specific assessment tool, while budgeting figures represent planned expenses rather than measurable indicators of performance. Thus, the definition of KPIs as measurable values demonstrating business effectiveness captures their role in strategic management and performance evaluation accurately.