KPI TRAINING MODULE

KPI AND HOW TO CASCADE DOWN

BY OMD

RPefR:OYMTO_CNhoRseenstJrisiscetne_d070317_rev1

TABLE OF CONTENT

01 WHAT IS KPI?
02 PURPOSE OF KPI
03 IMPORTANCE OF KPI
04 KPI SELECTION CRITERIA
05 KPI BEST PRACTICE
06 ELEMENTS OF KPI
07 KPI CASCADING
08 KPI STANDARD FORMAT
09 KPI PDCA
10 KPI EXERCISE
11 KPI GROUP EXERCISE

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1.0 WHAT IS KPI?
What is Key Performance Indicator (KPI) ?
• A type of performance measurement system.

What is KPI Management?
• A term used to describe the process of setting, performing, monitoring and

analysing specific key performance indicators (or KPIs) which helps companies and
organizations in measuring the level of success in reaching their business
objectives.

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2.0 PURPOSE OF KPI

1 • Company’s Goals and

Objectives are make
known to all.

5• Individual goals and 2

objectives are made clear • Help businesses evaluate
and know to superior, their success at reaching
peers and subordinates. specific targets.

4 PURPOSE OF KPI

• Division/Dept/Section’s 3 • All Division/Dept/Section
Objectives or ‘purpose of
existence’ is make known can align their KPIs/Goals
to their staffs. to the company’s
objective.
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3.0 THE IMPORTANCE OF KPI

• Critical for monitoring financial performance
• Help to improve employees’ morale, customer satisfaction and personal’s growth .

Why are KPIs Important?

• Managers are overwhelmed and distracted with day to day
activities and tasks

• Manager must make important decisions, quickly, with greater
consequences, and often with limited information on hand

• Managers concentrate on the tactical decisions and neglect the
strategic ones.

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4.0 KPI SELECTION CRITERIA

What items should be selected as KPI ?

1 Items that have significant contribution towards Company’s or
Division/Department’s Goals and Objectives

2 Items that require diligent monitoring/review or requires
constant/periodic attention

3 Items that we require support from other department/section or require
support from our superior
.

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5.0 KPI BEST PRACTICE

What Are KPI Best Practices?

1 Setting the KPIs that are aligned to your organisation goals
2 Define what you want to track by narrowing your list to avoid data

overload

3 Ensuring that key performance indicators are achievable
4 Using SMART practice

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5.1 SMART PRACTICE

What Are SMART Practice?

Specific: Start with a specific objective that can be isolated.

Measurable: Find a definitive way to measure the data that needs recording.

Attainable: Make sure the objective is something that can be readily attained.

Relevant: Ask if these goals are relevant to the target groups.

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6.0 ELEMENTS OF KPI

Target What to achieve

Important Method to achieve target
Measure

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6.1 ELEMENTS OF TARGET What to achieve

Target

1 Target Name What we want to achieve

2 Unit of Measure How to measure

3 Target Value What to score

* One (1) target can have more than one ‘unit of measure’ with its corresponding target value

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6.2 ELEMENTS OF IMPORTANT MEASURE

Important Method to achieve target
Measure

1 a. Control Item How we want to achieve the
b. Activity Plan target

2 Unit of Measure How to measure

3 Target Value What to score

* Each target must have method (important measure) to achieve the target.
** One target can have more than (1) method (important measure).

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6.3 KPI IN ACTION
• Key Performance Indicators (KPIs) are the critical (key) indicators of progress toward
an intended result.
• Managing with the use of KPIs includes setting targets (the desired level of
performance) and the important measures to achieve that target.

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7.0 KPI CASCADING

What is KPI Cascading?

Cascading represents translating and aligning organizational objectives and Key
Performance Indicators (KPIs) from strategic level down to departmental level and
finally, to individual level.

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7.1 VALUE OF CASCADING

Cascading KPIs adds value to the company from two angles:

1 The company ensures that its established strategic objectives are aligned
across the organization, which leads to clear distinction between tasks, synergy
between organizational entities and effective communication at all levels;

2 The employees have a clear and objective picture of their contribution to
organizational performance which leads to high levels of employee engagement,
an important indicator to successful companies.

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7.2 HOW TO CASCADEHEAD TARGET Top to bottom
Control Item Important Measure Activity Plan

TARGET

SUBORDINATE Important Measure

Control Item Activity Plan Activity – Acts/what to do.

* Head Control Item will be subordinate Target Control Item – item can be
control.
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7.3 KPI CASCADING

How subordinate decide on his/her target item (based on superior’s KPI)?

1 From superior’s Control Item
2 From superior’s target item (or partial target)
3 From self’s important items (not related to superior’s KPI)

Note: Superior’s activity plan cannot be taken as our target item.

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7.4 KPI CASCADING

TARGET

HEAD Important Measure

Control Item  Activity

TARGET How to set / Select target item
for Subordinate.
SUBORDINATE Important Measure 1. From Head Control Item
2. From Head Target
Control Item Activity 3. From own initiative
4. Head activities cannot be

subordinate target.

* Target Subordinate not compulsory in Control Item Head

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8.0 KPI PLAN FORMAT

BUSINESS PLAN FOR XXX

DIVISION KEY PERFORMANCE INDEX DEPARTMENT TARGET/KPI IMPORTANT MEASURE RESPONSIBILITY
SEC 1 SEC 2 SEC3
NAME UNIT OF TARGET NAME UNIT OF TARGET WEIGHTAGE CONTROL ITEM/ACTIVITY PLAN UNIT OF TARGET
MEASUREMENT VALUE MEASUREMENT VALUE MEASUREMENT VALUE

KPI Plan Format

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8.1 KPI PLAN - SAMPLE

BUSINESS PLAN FOR BUSINESS EFFICIENCY

OMD KEY PERFORMANCE INDEX TARGET/KPI IMPORTANT MEASURE RESPONSIBILITY

NAME UNIT OF TARGET NAME UNIT OF TARGET WEIGHTAGE CONTROL ITEM/ACTIVITY PLAN UNIT OF TARGET Op Big CIMO
MEASUREMENT VALUE MEASUREMENT VALUE MEASUREMENT VALUE Eff Data

Proton's Profitability RM ≥ RM 1. Proton's Profitability RM ≥ RM 30% Monitor cost reduction initiatives No of review once/month
200million 200million closely
No of review
Opex Cost Reduction % reduction 20% 2. Opex Cost Reduction (Business % reduction 20% 5% Conduct OPEX review meeting once/month ⃝ ⃝ ⃝
Efficiency, CIMO)

3. Cost Reduction Initiatives -

Cost Reduction Project 100% project rolled out according

to timeline

g. Reduction of energy consumption RM RM 275K a. Cost savings from Kaizen RM RM 1.5 M 5% Monthly review the activities with No of review once/month ⃝
h. Cost savings from Kaizen RM RM 1.5 M b. Cost savings from ICC RM RM 1.5 M 5% CIMO ⃝

i. Cost savings from ICC RM RM 1.5 M c. Reduction of energy consumption RM RM 275K 5% Fortnightly review activities with Big No of review 2 times ⃝
j. Reduction from 'max demand'. RM RM 45K d. Reduction from 'max demand'. RM RM 45K 5% Data /month ⃝

k. Shopfloor manpower optimization RM RM 10 M e. Shopfloor manpower optimization RM RM 10 M 5% Review plant capacity No of review once/month ⃝
No of review once/month
Review man-power planning (when
there's revision in plant capacity)

4. Increase Sales's conversion rate % conversion 30% 5% Fortnightly review activities with Big 2 times ⃝
utilizing Big Data 5% Data /month ⃝

a. From 'prospect' to booking

No of review

b. From 'booking' to registration % conversion 65%

Quality Improvement/PROTON Way 5. Quality Improvement/PROTON KPI Plan Sample
Way

a. Kaizen Completion of L4 Submission No of submission 5,000 a. Kaizen Completion of L4 No of submission 5,000 2.5% Implement Proton Production Way at Diagnosis Level 1.5 ⃝
Submission shopfloor
No of review once/month 19
b. ICC Project Completion No of projects 200 b. ICC Project Completion No of projects 200 2.5% Monthly review activites with CIMO ⃝

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9.0 KPI PDCA

• The PDCA cycle consists of four steps: Plan, Do, Check, Act. Key performance
indicators link these steps together, creating a process of continuous
improvement.

Action: Review 2 for non AP Plan: Establish KPI by aligning
achieving target to superior target/objective
KPI
Check: Conduct Periodical Do: Carry out daily
Review (Review 1) CD
activities towards achieving
the targets set.

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9.1 KPI MONTHLY REVIEW (REVIEW 1) FORMAT

Check: Review 1

Objective: To conduct periodical review on the performance

DIVISION/DEPARTMENT : CY 2020 INDIVIDUAL PMS
REPORT BY :
KPI MONTHLY REVIEW (REVIEW 1)
Target Name : REVIEW MONTH :

TARGET DATE OF REVIEW :
MONTH
TARGET IMPORTANT MEASURE
YTD
(NOTE : Only for non-achieving target / YTD target)

RESULT STATUS TREND NO. CONTROL ITEM / ACTIVITY PLAN UNIT TARGET VALUE RESULT STATUS

M EASUREM ENT

1

2

3

4

TARGET IMPORTANT MEASURE

Target Name : RESULT STATUS TREND (NOTE : Only for non-achieving target / YTD target) RESULT STATUS

TARGET NO. CONTROL ITEM / ACTIVITY PLAN UNIT MEASUREMENT TARGET VALUE
MONTH 1
2
YTD 3
4

KPI Review 1 format 21

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9.2 KPI MONTHLY REVIEW (REVIEW 1)

• Status for the results of Target Item will be following the below guideline:-
• Target items that scored 94.9% & below (Triangle, X & XX) need to have Review 2

(Recovery Plan)

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9.3 KPI MONTHLY REVIEW (REVIEW 1) EXAMPLE

DIVISION/DEPARTMENT : OMD/CIMO CY 2020 INDIVIDUAL PMS
REPORT BY : RAMLI AHMAD
KPI MONTHLY REVIEW (REVIEW 1)
REVIEW MONTH : NOVEMBER 2019

DATE OF REVIEW : 28 NOV 2019

TARGET IMPORTANT MEASURE

Target Name : ICC Completed Project (NOTE : Only for non-achieving target / YTD target)
Target: 200 Projects
UNIT
TARGET RESULT STATUS TREND NO. CONTROL ITEM / ACTIVITY PLAN M EASUREM ENT TARGET VALUE RESULT STATUS
XX 1 Manage ICC program Implementation Completion Rate (%) 100% 80% X
MONTH:NOV 25 projects 5 projects 2 Conduct Review with Section Head
3 To manage ICC Convention No of review 2x/Month 1X/Month STATUS
YTD: NOV 175 projects 158 projects 4 Prepare presentation materials for 2 x/Ye a r 2 x/Ye a r
No of convention 1x/Month
ICC Completed Project management update 1x/ Month
No of report RESULT
Plan Actual

No of Completed 220 153 158 200
Project 170 158
120 109 130
Dec Total
70 1111 2121 3142 44 59 74 89 20 21 23 200
20 10 15 15 15 158
-3 0 Jan
Plan 10 5
Actua l 11
Cumm Plan 10 Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Cumm Actual 11
10 12 10 14 15 15 20 21 23 25

11 12 10 15 15 15 20 21 23 5

20 32 42 56 71 86 106 127 150 175

22 34 44 59 74 89 109 130 153 158

TARGET IMPORTANT MEASURE

Target Name : Kaizen L4 Submission (NOTE : Only for non-achieving target / YTD target)
Target: 5,000 Submission
NO. CONTROL ITEM / ACTIVITY PLAN UNIT MEASUREMENT TARGET VALUE
TARGET RESULT STATUS TREND 1
2
MONTH:NOV 500 Submission 510 Submission 3
4
YTD: NOV 4,498 Submission 5,617 Submission

Kaizen Submission (L4)

Plan Actual Cumm Plan Cumm Actual
5,617
6,000 5,617
5,107 4,498
4576
Dec Total
No of L4 5,000 3920 4,498
Submission 3410 5,617
4,000 2763

3,000 303808 1,047133 1,385 1734 2273 490 647 510 656 531
2,000 333 333 344 433 500 400 500 500 505010
1,000 349 539
333 333 333
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Plan 333 333 333 333 333 433 500 400 50 0 500 500
349 539 490 647 510 65 6 531 510
Actua l 308 733 344 1332 1665 2098 2598 29 98 3498 3998 4498
1734 2273 2763 3410 39 20 4576 5,107 5,617
Cumm Plan 333 666 999

Cumm Actual 308 1,041 1,385

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9.4 KPI MONTHLY REVIEW (REVIEW 2) FORMAT

Action: Review 2

Objective: 1. To review progress of important measures of non performing target
2. To identify root-cause of non achieved target and to take necessary countermeasure.

DIVISION/DEPARTMENT : CY 2020 INDIVIDUAL PMS
REPORT BY :
KPI REVIEW OF NON-PERFORMING TARGET (REVIEW 2)
REVIEW MONTH :
DATE OF REVIEW :

TARGET IMPORTANT MEASURE ACTION PLAN

NO NON-ACHIEVING TARGET UNIT OF TARGET ACTUAL NO. CONTROL ITEM / ACTIVITY PLAN UNIT OF TARGET ACTUAL ROOT CAUSE OF NOT ACHIEVING TARGET COUNTER MEASUREMENT STATUS

MEASUREMEN MEASUREMEN

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9.5 KPI MONTHLY REVIEW (REVIEW 2) EXAMPLE

DIVISION/DEPARTMENT : OMD/CIMO CY 2020 INDIVIDUAL PMS
REPORT BY : RAMLI BIN AHMAD
KPI REVIEW OF NON-PERFORMING TARGET (REVIEW 2)
REVIEW MONTH : NOVEMBER 2019
DATE OF REVIEW : 28 NOV 2019

TARGET IMPORTANT MEASURE ACTION PLAN

NO NON-ACHIEVING TARGET UNIT OF TARGET ACTUAL NO. CONTROL ITEM / ACTIVITY PLAN UNIT OF TARGET ACTUAL ROOT CAUSE OF NOT ACHIEVING TARGET COUNTER MEASUREMENT STATUS
MEASUREMEN MTD: 25 MTD: 5 MEASUREMEN 100% 80% On Going
YTD: 158
1 ICC Completed No of Projects 1 Manage ICC program Co mp l e ti o n ICC Coaching not conducted as per plan To recovered ICC coaching for On Going
I mp l e me n ta ti o n Rate (%)
Unable to conduct review due to related group on Dec 19
Pro je cts YTD: 175 s ection head unavailability. To conduct review with res pective
e xe cu ti ve .
2 Conduct Review with Section HNeoadof review 2x/Month 1X/Month

3 To manage ICC Convention No of 2x/Ye a r 2x/Ye a r
co n ve n ti o n

4 Prepare pres entation No of report 1x/ Month 1x/Month
materials for management

u p d a te

KPI Monthly Review 2 Example

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9.6 KPI BOARD FORMAT

KPI MONITORING BOARD GUIDE

1 Department Organisation 1 4 7 10
2 5 8 11
2 KPI division 3 6 9 12

3 KPI Department

4 9 Graph base on KPI target
10 12 Others:

Review 1 / 2 (compulsory if
target not achieve),
Safety, attendance, CFT, etc.

*4-9 Numbers of monitoring graph depending on the
department KPI target

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9.7 EXAMPLE OF KPI BOARD

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10.0 KPI EXERCISE

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10.1 EXERCISE 1
1

• Objective: To do well in coming SPM examination.
• How to measure: No of subjects obtained ‘A’
• What is the target : 8 subjects

Important Measure/How to achieve:

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10.1.1 EXERCISE (1)
2

KPI FOR MR XX

DEPARTMENT TARGET/KPI IMPORTANT MEASURE

Name Unit of measure Target Control Item / Activity Plan Unit of Target
value measure value
Do well in SPM No of subject A
8
subjects

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10.1 EXERCISE 1 (EXAMPLE)

1

• Objective: To do well in coming SPM examination.
• How to measure: No of subjects obtained ‘A’
• What is the target : 8 subjects

Important Measure/How to achieve:
1. Attend tuition for subject a, b, c and d for 10 hours per week
2. Review with parents and tuition teacher once every fortnight.
3. Do ‘past years exam’ paper; all subjects at least one paper per week.

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10.1.1 EXERCISE (1) EXAMPLE
2

KPI FOR MR XX

DEPARTMENT TARGET/KPI IMPORTANT MEASURE

Name Unit of measure Target Control Item / Activity Plan Unit of Target
value measure value
Do well in SPM No of subject A 1. Attend tuition for subject
8 A, B, C and D No of hours 10
subjects /week hours/wk
2. Review effectiveness of
the tuition with parents No of once/
and tuition teachers review 2 weeks

3. Complete past year exam No of past 10
paper (all subjects) year papers papers/

done/wk week

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10.2 EXERCISE 2 Page 33
1
• Objective: To reduce weight
• How to measure: from 55kg to 50 kg

Important Measure/How to achieve: ?

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10.2.1 EXERCISE (2)
2

KPI FOR MS YYY

DEPARTMENT TARGET/KPI IMPORTANT MEASURE

Name Unit of measure Target Control Item / Activity Plan Unit of Target
value measure value
Reduce weight (current kg
55kg) 5kg

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10.2.2 EXERCISE 2 (EXAMPLE)
3
• Objective: To reduce weight
• How to measure: from 55kg to 50 kg

Important Measure/How to achieve:
1. Control food intake daily; maximum 2000 calories per day.
2. Go to gym twice a week and each time spend at least 2 hours in the gym.

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10.2.3 EXERCISE (2) EXAMPLE
4

KPI FOR MS YYY

DEPARTMENT TARGET/KPI IMPORTANT MEASURE

Name Unit of measure Target Control Item / Activity Plan Unit of Target
value measure value
Reduce weight (current kg
55kg) 5kg 1. Control intake of food calories < 2000
daily
No of 2 times
2. Exercise at gym visits/week

Total hours in 4 hours
gym/wk

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10.3 EXERCISE (3)
1
• Objective: To increase FTT rate from 80% to 90% by Dec 2020.

Important Measure/How to achieve: ?

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10.3.1 EXERCISE (3)
2

KPI FOR MS YYY

DEPARTMENT TARGET/KPI IMPORTANT MEASURE

Name Unit of measure Target Control Item / Activity Plan Unit of Target
value measure value
Improve FTT % FTT
90% by
Dec 2020

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10.3.2 EXERCISE (3) EXAMPLE
3

• Objective: To increase FTT rate from 80% to 90% by Dec 2020.

Important Measure/How to achieve:
1. Reduce off line DPU from 20 to 10
2. Weekly review the effectiveness of TQO program
3. Increase the number of Final Line rectifiers with “U” skill to 5 person.

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10.3.3 EXERCISE (3) EXAMPLE
4

KPI FOR MS YYY

DEPARTMENT TARGET/KPI IMPORTANT MEASURE

Name Unit of measure Target Control Item / Activity Plan Unit of Target
value measure value
Improve FTT % FTT
90% by 1. Reduce off line DPU Defect 10
Dec 2020 points/unit once/
Week
2. Review effectiveness of no of review
5 pax
TQO No of
rectifiers with
3. Increase no of skilful “U” skill level
rectifiers at Final line

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11.0 GROUP EXERCISE

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THANK YOU

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