Performance Measurement & KPIs Flashcards

A company's customer satisfaction score drops from 87% to 79% over two quarters. What is the MOST strategic first response?

Answer: Conduct root cause analysis to identify drivers of the decline

Root cause analysis identifies the underlying drivers of performance decline before implementing corrective actions.

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

Answer: Lagging indicator

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

An organization uses a Balanced Scorecard. Under which perspective would 'employee training hours per quarter' be classified?

Answer: Learning & Growth

Employee training metrics fall under the Learning & Growth perspective, which focuses on organizational capability development.

What does a KPI cascade ensure in a large organization?

Answer: That executive KPIs are broken into aligned metrics at every organizational level

KPI cascading aligns departmental and individual metrics with enterprise-level strategic objectives.

Which of the following BEST describes an Objectives and Key Results (OKR) framework?

Answer: A goal-setting method pairing qualitative objectives with measurable key results

OKRs combine an inspirational qualitative objective with 2–5 quantitative key results that measure progress toward it.

A business strategist notices that a KPI is consistently met but the underlying strategic goal is not being achieved. This MOST likely indicates:

Answer: The KPI is a poor proxy for the actual strategic objective

When KPI achievement doesn't produce strategic outcomes, the metric is likely measuring the wrong thing.

In the context of performance measurement, what is 'benchmarking'?

Answer: Comparing an organization's metrics against best-in-class or industry standards

Benchmarking compares organizational performance against external standards to identify gaps and improvement opportunities.