Business Performance Management Key Performance Indicators and Metrics

Question 1

Which type of KPI measures outcomes that have already occurred and cannot be changed?

Accepted Answer

Lagging indicator

Answer

Lagging indicators reflect past performance outcomes, such as revenue earned or customer churn rates.

Question 2

What does the acronym SMART stand for when defining KPIs?

Accepted Answer

Specific, Measurable, Achievable, Relevant, Time-bound

Answer

SMART KPIs are Specific, Measurable, Achievable, Relevant, and Time-bound to ensure clarity and accountability.

Question 3

A company tracks 'number of new leads generated per month.' This is an example of which type of KPI?

Accepted Answer

Leading indicator

Answer

New leads generated is a leading indicator because it predicts future revenue potential before it is realized.

Question 4

Which of the following is the BEST example of a customer-focused KPI?

Accepted Answer

Net Promoter Score (NPS)

Answer

Net Promoter Score measures customer loyalty and willingness to recommend, making it a core customer-focused KPI.

Question 5

What is a KPI cascade in performance management?

Accepted Answer

Aligning organizational KPIs down from strategic to operational levels

Answer

KPI cascading aligns high-level strategic goals with department and individual performance targets throughout the organization.

Business Performance Management Practice Test