HR GLOSSARY · Analytics & reporting

KPI

Also known as: Key Performance Indicator, Performance metric

A KPI (Key Performance Indicator) is a measurable value that reflects how effectively an organization, team, or individual is achieving objectives. Unlike OKRs which target a quarter-specific shift, KPIs track ongoing health — metrics you monitor every week regardless of the current goals.

KPIs are the dashboard, not the destination. They tell you whether the steady state is healthy: revenue growth, customer churn, employee turnover, time-to-hire, gross margin. A good KPI set is short (5–15 metrics for a team), tied to outcomes that matter, and reviewed regularly. Bad KPI sets are long, lagging, and ignored — vanity metrics that look good on slides but don't drive decisions.

HR-specific KPIs that actually drive decisions

Time-to-hire — days from requisition open to offer accepted
Cost-per-hire — total recruiting cost divided by hires
Turnover rate — voluntary + involuntary departures over a period
Regrettable turnover — departures of high-performers or early-tenure staff
Offer acceptance rate — accepted offers divided by extended offers
Absenteeism rate — unplanned absences as percentage of working days
Engagement score / eNPS — pulse survey or annual measure
Headcount vs plan — actual vs forecasted, by team and function

Leading vs lagging KPIs

Lagging KPIs (turnover rate, revenue growth) measure what already happened — useful for accountability but slow to act on. Leading KPIs (pulse engagement, candidate pipeline volume, manager 1:1 frequency) predict what's about to happen — useful for early intervention. The best dashboards mix both: leading for forecasting, lagging for accountability.

Frequently asked questions

What does KPI stand for?

KPI stands for Key Performance Indicator — a measurable value that reflects how effectively an organization, team, or individual is achieving its objectives.

How many KPIs should a team have?

5–15 for most teams. More than that dilutes attention; fewer usually means you're missing important signals. Pick the metrics that drive decisions, not the ones that look good on slides.

KPI vs OKR — what's the difference?

KPIs track ongoing health (always-on, no end date). OKRs target a specific shift over a specific window (typically quarterly). KPIs tell you steady state; OKRs tell you this quarter's bet. Both have value — run them together.

What's a leading vs lagging KPI?

Leading KPIs predict future outcomes (pulse engagement, candidate pipeline). Lagging KPIs measure past results (turnover, revenue). Best dashboards mix both.