Problems
In practice, overseeing key performance indicators can prove expensive or difficult for organizations. Some indicators such as staff morale may be impossible to quantify. As such dubious KPIs can be adopted that can be used as a rough guide rather than a precise benchmark.
Another serious issue in practice is that once a measure is created, it becomes difficult to adjust to changing needs as historical comparisons will be lost. As such measures are kept even if of dubious relevance, because history does exist.
Comparisons between different organizations are often difficult as they depend on specific in-house practices and policies.
Key performance indicators can also lead to perverse incentives and unintended consequences as a result of employees working to the specific measurements at the expense of the actual quality or value of their work. For example, measuring the productivity of a software development team in terms of source lines of code encourages copy and paste code and over-engineered design, leading to bloated code bases that are particularly difficult to maintain, understand and modify.
Read more about this topic: Performance Indicator
Famous quotes containing the word problems:
“I’m no good at being noble, but it doesn’t take much to see that the problems of three little people don’t amount to a hill of beans in this crazy world. Someday you’ll understand that.”
—Julius J. Epstein, U.S. screenwriter, Philip Epstein, screenwriter, Howard Koch, screenwriter, and Michael Curtiz. Rick Blaine (Humphrey Bogart)
“I am always glad to think that my education was, for the most part, informal, and had not the slightest reference to a future business career. It left me free and untrammeled to approach my business problems without the limiting influence of specific training.”
—Alice Foote MacDougall (1867–1945)
“As our disorderly, competitive technological society is piling up its victims and constantly developing new problems of maladjustment, we must use our scientific knowledge to determine the cause and prevention of suffering rather than putting all our emphasis on its alleviation ...”
—Agnes E. Meyer (1887–1970)