A KPI or key performance indicator is widely used as a tool to measure the effectiveness of a team, company, and business in achieving their objectives. While KPI sounds great to improve the performance of the employee, it has one big problem: it destroy the quality of the service from that respective business. Here’s why.
Organizational KPIs
In the organization, there are multiple level of KPIs. The high level KPI normally focus on business development and expansion, while the lower level KPI focus on the daily process to be done in departments such as sales, support, pricing, and others.
Throughout my career, I do not see any massive issues on higher level KPIs. But on the lower level KPI when it involve the operation department, here’s where the issue arises.
Lower Level KPIs Issue
In most of the case, the employee in the department is too focusing on getting as much KPIs as possible by sacrificing the quality of their services.
In fact, you do not need to involve in any organization to witness the issue happen with the lower KPIs in any organization.
Whether you realize it or not, you might faced it in your daily life as a customer perspective. Here are some of the common examples.
Support Chat & Customer Service
In almost all of the organization, the support chat service’s KPIs are the numbers of chats an agent can handle per day. The initial idea of this KPI is to determine how efficient an agent is.
I’m pretty sure that you’ve met some customer service agent that is rushing to solve your case without caring the quality of their services.
In most of the cases, the agent closed the live chat after the customer was being idle for just less than a minute.
The faster the chat getting solved and closed, the more KPI points that the support chat agent will gain.
Most of the companies did not think of this issue when they created the KPIs for the support chat.
If the agent end up did not solved the case due to rushing for the given KPI target, it ended up backfire to the business. Customers will end up leaving the company’s service when they found that they have a poor service.
Taxi Driver
In most of the taxi company, the driver’s main KPI is the number of rides completed for each day. The more passenger that the driver sent to, the closer they are to achieve their daily target.
The main issue of this KPI is pretty obvious: the taxi drivers are trying to complete as much ride as fast as possible. In some of the cases, the passengers found out that their taxi drivers are too KPI oriented and resulted in poor service delivered such as dangerous speeding during the journey. This is because, they can complete more rides by sending complete faster.
In other case, the passenger also experienced the driver dropped them not in the appropriate location just to save up their time. “My final drop location supposed to be across the street, but instead, the driver dropped me on the other side of the road just because it might takes him another 10 minutes to make a U-Turn due to the traffic”.
Pricing Strategy
In several organization, there is a pricing strategy team to make a deal and negotiation with clients in term of business deal or collaboration. Their main KPI is to get as much discount or rebates as possible, and sometimes it affect their incentive.
Several weeks ago, my company had a business deal with one big company in which the pricing team is negotiating personally with myself.
While the pricing team is asking for a discounted price, I told him that we implemented a fixed and flat rate to all our customers. However, the most surprising thing is that he asked if I can manipulated the receipt by markup my original price and put a “fake” discount in the invoice. This way, it will be beneficial for him as he will get a commission for getting the “fake” discount and in the same time I will get the earning from the normal price.
When I heard about this, it just gave me a total bad impression about this big company from the level of trust and manor from their employees.
Personally, I feel this KPI destroy the quality and reputation of the business.
Food Delivery
In the food delivery company, the number of food delivered is the main KPI of their employees. In some of the cases, it makes the employees are rushing to deliver the food to the customers. Sometimes, it end up delivering the spilled foods and drinks to the customers just because they’re rushing to chase their KPI.
Number Should Not be The Single KPI in Every Organization
Fixing how the employee’s perspective about KPI might sounds challenging. However, eliminating KPI in your organization completely can cause demotivation on the employee’s productivity and achievement.
So, how should you fix it?
The solution here is to not include the number of the chat as a single KPIs. It is important for the organization to add the customer’s feedback by the end of the service. This way, the organization can keep track of how effective and how well the agent handle the case, not just the effectiveness.
Remember, quality of the service is always more important than the quantity. A KPI in the organization should not always just be a number, number, and number. KPI is far more than that.
