Choosing the Right KPIs to Drive Organisational Success

The irony of modern work is that the more we measure, the less we see. Organisations track hundreds of key performance indicators (KPIs), yet struggle to answer simple questions: What does “good” look like? What truly drives “impact”?

McKinsey’s research shows that companies that deliberately focus on their employees’ performance are 4.2 times more likely to outperform their peers, achieving 30 per cent higher revenue growth and five percentage points lower attrition. This demonstrates that performance clarity is not just a people initiative, but a long-term growth strategy for any organisation.

Even as 61 per cent of employees in Singapore now work fully in-office, up from 54 per cent a year ago, the productivity paradox persists. Presence has become mistaken for performance, leading to “productivity theatre,” when the standard should be results over visibility. Culture and mindset still matter, but what organisations need next is practical clarity. This means clearly defining success and ensuring people understand how measurable outcomes and KPIs align individual contributions with collective goals.

When Performance Isn’t Measured Right

Common issues in performance management often stem from how KPIs are defined and used. Across industries, three key recurring problems stand out:

(1) Too many KPIs across managers and teams dilute focus by turning strategy into a list of metrics instead of a small set of clear outcomes;

(2) KPIs are frequently confused with tasks or action plans rather than outcomes;

(3) Success is measured by the completion of initiatives instead of their actual impact.

These patterns point to a deeper challenge. As recent research on long-term value measurement highlights, the explosion of data has made it easier to measure everything but harder to focus on what truly matters. Companies now need to determine which indicators genuinely convey performance and impact. When systems prioritise quantity over clarity, they create noise, weaken accountability, and make it difficult to see whether efforts genuinely drive strategic progress.

A simple analogy illustrates the problem.

Objective	Usual Approach (Unfocused KPIs)	Problem	Better Approach (KPIs with Clear Outcomes)
Be Healthy	Tracks everything that appears relevant: weight, blood pressure, muscle mass, hours exercised, steps per day.	Too many indicators, which may not even be relevant to each other, make success undefined and outcomes hard to evaluate.	Define the desired outcome first – e.g., "Lose 5kg in 3 months." Then, select KPI(s) that directly measure progress and reflect success, i.e., weight change.

The same principle applies in organisations. Without clarity on the desired outcome, KPIs become scattered and effort becomes difficult to evaluate. When leaders define success upfront, KPIs can prioritise resources, make progress visible, and help teams understand what matters most.

Defining Clear Expectations with KPIs

Effective KPIs serve as the bridge between expectations and results, translating organisational goals into measurable indicators of success. Within any performance framework, there are three key types of KPIs – outcome, output, and process – each playing a distinct role in defining what success looks like. Clarity about which type is being used, and why, ensures that teams are measuring what matters rather than what’s most visible.

A balanced KPI framework allows employees to be accountable not only for results but also for the quality and consistency of how those results are achieved. Equally important is how KPIs are agreed upon. Metrics should not be imposed unilaterally; they should be co-created through open discussion so expectations are shared and understood across levels. Regular check-ins, progress reviews, and transparent communication reinforce alignment, accountability, and trust, while allowing for adjustments as circumstances evolve.

Clear, shared expectations turn KPIs from metrics into a common language for success.

Understanding the Elements of Performance Management

An effective performance management system rests on four interrelated elements: strategic objectives, KPIs, targets, and accountability. Together, they form the structure that ensures every effort contributes meaningfully to shared goals.

Strategic objectives define where the organisation is heading and what success looks like at a macro level. These organisation-wide goals would then inform how the KPIs are defined.

KPIs are the measurable indicators that show progress toward those objectives. They answer the question, “How do we know we’re succeeding?” For instance, a strategic objective of higher customer satisfaction could translate to KPIs on customer response time and number of complaints.

Targets establish milestones for achievement, whether quantitative (less than 2% product returns) or qualitative (maintaining satisfaction above 4/5). They turn KPIs from abstract measures into tangible goals.

Accountability clarifies ownership. Every KPI should have a clearly designated person or team responsible for delivering results. When accountability is explicit, employees understand not only what is being measured but also their role in achieving it.

When these four elements align, employees see how their day-to-day work connects to organisational success, which in turn strengthens motivation, clarity, and engagement.

Cascading KPIs Across the Organisation

The value of strategic objectives lies in their translation into action, and KPIs are essential to making that connection – from top-level strategy to the individual contributor.

Cascading KPIs ensure that strategy becomes coordinated execution across all levels of the organisation. Senior management sets the overarching strategic objectives, while middle management translates these into measurable KPIs. In practice, KPIs cascade level by level, from enterprise strategy through business units and teams to each member, keeping intent, measures, and accountability aligned at each layer. When alignment is clear, success is measured consistently, and every employee can see how their contributions drive organisational progress.

In Singapore, organisations increasingly recognise that performance alignment cannot happen in isolation. Clear alignment across and within teams creates coherence, ensuring that everyone works towards outcomes that reinforce the organisation’s strategic intent. Effective cascading also strengthens accountability and agility, allowing priorities to shift without losing focus on shared objectives.

When done well, cascading gives every team a line of sight to strategy, tightening alignment, ownership, and momentum.

Choosing the Right KPIs

To determine whether KPIs are fit for purpose, leaders can ask:

• Does this KPI support our strategy and desired outcomes?

• Is everyone clear on what this KPI measures and how it differs from tasks, targets, or goals?

• Can this KPI be quantified or tracked with reliable data?

• What does success look like for this KPI? What target or outcome are we aiming for?

• Are we tracking too many KPIs, or ones that don’t meaningfully impact our objectives?

• Who is responsible for achieving this KPI?

• How will we monitor progress and adjust if needed?

  
  

These questions help distinguish between what is measurable and what is meaningful, ensuring that measurement serves management.

Boost Your Organisational Success with Refined Performance Management

Selecting the right KPIs is not about adding more metrics, but about achieving sharper focus. When performance indicators are clearly defined, transparently communicated, and regularly reviewed, they enable fair and consistent measurement. Clear KPIs also build trust as employees understand how they are evaluated, and managers know what success looks like.

This level of clarity does not happen by chance. It requires intentional alignment between strategy, leadership, and communication. At aAdvantage, we work with organisations to translate strategic goals into coherent KPI frameworks – connecting teams across levels, strengthening manager capability, and embedding performance dialogue into everyday practice.

When alignment and capability come together, performance management becomes a culture of clarity, accountability, and shared success. To learn more about how aAdvantage helps organisations strengthen performance alignment, visit our Human Capital Services.