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The KPI Problem |
People are your most important asset. |
Most managers either have no talent metrics or meaningless ones. KPIs become bureaucratic exercises instead of performance drivers. |
The solution isn't more metrics.
It's setting up a few to answer the right questions. |
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The Four-Question Framework |
Based on coaching hundreds of leaders, every effective KPI system answers four questions: |
1. Are we hiring the right people? |
What to measure: Quality of hires at specific intervals (90 days, 6 months)
Why it matters: Bad hires compound. Good hires multiply.
Metric: Percentage of new hires meeting/exceeding expectations at 6-month mark |
2. Are we hiring them fast enough? |
What to measure: Time to fill by role complexity
Why it matters: Speed and quality create tension—you need both
Metric: Days to fill vs. benchmark (30/60/90 days based on role level) |
3. Are we keeping the right people? |
What to measure: Retention of high performers vs. overall retention
Why it matters: Not all attrition is bad—you want stars to stay, underperformers to leave
Metric: Retention rate of employees with tenure >6 months meeting expectations |
4. Are the right people performing? |
What to measure: Performance ratings aligned with manager expectations
Why it matters: This is where hiring quality shows up in business results
Metric: Percentage of team meeting/exceeding performance standards |
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Making KPIs Work: The Integration Principle |
These four questions create natural tension. And that's by design. |
Quality vs. Speed: You can hire slowly and carefully OR quickly and fix mistakes. The metrics force you to consciously optimize that choice. |
Retention vs. Performance: You want people to stay AND perform. High retention with low performance means you're not managing, you're tolerating mediocrity. |
The Sweet Spot: High-quality hires, filled quickly, who stay and perform well. |
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What About Happy People? |
I will undoubtedly get a dozen email telling me I'm leaving out critical questions from the Gallup Employee Engagement survey. |
Don't people need to develop and grow? Shouldn't they feel aligned to the mission? What about satisfaction and basic resources?
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These are helpful. They're the basis of my Employee Pulse Check in fact. |
But they are a means to end. They're a level down from this executive view. They may help you diagnose why one of these headline KPIs is flagging, but they may also be a distraction. |
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Implementation: Start Simple |
Week 1: Pick your biggest talent challenge and establish baseline metrics
Week 2: Set realistic targets for each metric (don't aim for perfection)
Week 3: Create simple tracking (spreadsheet works fine)
Week 4: Review patterns and adjust one thing |
In four months (and honestly, probably faster since these KPIs connect and compound), you'll have top-level indicators on the state of talent in your business. |
Your Operating Rhythm: |
Weekly Accountability: Track your numbers Monthly Diagnostics: Make changes based on patterns Quarterly Reset: Adjust targets and align the team to the higher standard
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Common Mistakes |
Too Many Metrics: Stick to these four core questions
Perfectionist Targets: Work from real data not theoretical ideals
Blame Focus: Use metrics to improve the system, not to punish your people
Static Targets: Talent is a race; there's always a higher standard to chase |
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The Real Goal |
KPIs aren't about creating statistics. They're about creating a system of indicators that motivate your leaders to elevate your people. |
The four questions force you to: |
Hire better people faster Keep your best performers happy Help everyone succeed Make tough decisions when needed
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Because what gets measured gets managed.
And what gets managed well gets multiplied. |
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What You Missed This Week |
Our Sunday AM posts: |
📌 How to Cut Half Your Meetings (Dave on LI)
📌 Reinvent Yourself at Any Time (Mar on LI)
📌 Simple Ways Anyone Can Lead (Dave on X) |
And here are our most popular posts last week:
🔥 Attention is Currency (Mar on LI)
🔥 10 Bad Leadership Habits (Dave on LI)
🔥 How To Manage More People (Dave on X) |
Our goal is to build a community of 1 million thoughtful, curious leaders. |
You can help us by reposting anything that resonates with you. |
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Thank you for reading. Appreciate you! |
Dave |
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