KPI- abbreviation of key performance indicator. KPI performance appraisal, also known as "key performance indicators" appraisal method, is one of the methods of enterprise performance appraisal. It is an objective quantitative management index to measure the process performance by setting, sampling, calculating and analyzing the key parameters of the input and output of the internal process of the organization. It is a tool to decompose the strategic objectives of an enterprise into operational objectives, and it is the basis of enterprise performance management. Establishing a clear and feasible KPI system is the key to do a good job in performance management.

Its advantages are clear standards and easy evaluation. Its disadvantage is that simple work is difficult to formulate standards and lacks certain quantification.

There are three most common key performance indicators:

1, benefit indicators, such as asset profitability efficiency and profitability level;

2. Operational indicators, such as department management cost control and market share;

3. Organizational indicators, such as satisfaction and service efficiency.

When determining key performance indicators, there is an important SMART principle:

-S stands for Specific, which means that performance appraisal should focus on specific work indicators, not general ones;

-M stands for measurable, indicating that performance indicators are quantitative or behavioral, and data or information to verify these performance indicators can be obtained;

-A stands for achievable, which means that performance indicators can be achieved through hard work, avoiding setting too high or too low a goal;

-R stands for relevance, that is, the setting of annual business objectives must be closely related to the responsibilities of the budget responsible unit. It is the result of repeated analysis, research and consultation by budget management department, budget execution department and company management, and must be recognized and promised by them.

-T stands for a specific deadline based on time and focusing on the completion of performance indicators.