Impractical KPI

Shadow (“S”) is an electronic components manufacturer. In order to improve efficiency, S issues “Rules of KPI”, a hundred-mark system is applied, in which 40 points for fulfillment of task, 40 points for attitude, 20 points for attendance, and points for attitude is scored by the direct supervisor. An employee shall be deemed as disqualified if he/she gets below 60 points, if so, S shall have the right to adjust his/her position to a lower rank, and cut down his/her salary.

At the end of the year, manager of Administrative Dept. Ms. Zhang only got 40 points, in which 20 points for fulfillment of task, 20 points for attendance, and she was deemed as disqualified. Ms. Zhang appealed to S, she said that her direct supervisor Mr. Liu had no reasonable reason to give her 0 points for attitude; there was no standard for the fulfillment of task for her position, and Mr. Liu had assigned too much tasks. However, S ignored her appeal, changed her position as a specialist, and cut down her post allowance. For this reason, Ms. Zhang filed arbitration.

In the arbitration process, S pointed out that Ms. Zhang had bad attitude, because she had contradicted with Mr. Liu 3 times, and she could not fulfill all the tasks. According to the email provided by Ms. Zhang, Mr. Liu would assign 30 to 40 tasks to her through email everyday on average. The arbitration committee interpreted that the standard for attitude in “Rules of KPI” was too subjective, and S failed to prove that Ms. Zhang had contradicted with Mr. Liu many times; there was no standard for the fulfillment of task for the management position, but the assignments were obviously overburden. Finally, the arbitration committee ruled against S.

KPI is very important for a company, however, if it is not practically designed, it will be the handicap for the management of the company. A practical KPI shall be designed in accordance with the principles of legal, reasonable and quantity-related.