What are key performance indicators (KPIs)?

Key performance indicators (KPIs) are measurable values that demonstrate how effectively an organization is achieving key business objectives. They are used to evaluate the success of an organization in reaching its targets and can encompass various aspects of performance, including financial results, operational efficiency, customer satisfaction, and employee engagement. By defining specific KPIs aligned with strategic goals, businesses can gauge their progress, make informed decisions, and motivate performance improvements.

The other options present elements that may appear relevant but do not capture the broader purpose of KPIs. Metrics focused solely on employee satisfaction, short-term financial gains, or historical financial analysis each represent a limited view of performance measurement and do not encompass the strategic, multi-dimensional nature of KPIs that help organizations assess their overall success in achieving long-term objectives.