The Key Performance Indicator (KPI) System as a Tool for Improving the Efficiency of the Personnel Management System

Abstract

The article examines the Key Performance Indicator (KPI) system as a tool for improving the efficiency of an organization's personnel management. The essence of KPIs is revealed, and the difference between this approach and traditional performance appraisal is shown. The necessity of cascading strategic goals to the level of individual employees, as well as compliance with requirements for indicators (specific, measurable, achievable, time-bound), is substantiated. The key areas for setting KPIs in the HR sphere are identified: recruitment and vacancy closure, staff turnover, training and development, employee satisfaction, and the economic return of the HR function. Special attention is paid to the integration of KPIs with the motivation and remuneration system, as well as typical implementation errors (excessive number of indicators, bias toward financial metrics, insufficient flexibility, lack of staff involvement).