Productivity and efficiency of a company in reaching its business objectives.

Think of a KPI as something like an instrument on a car dashboard, such as a speedometer. If you are driving your car and you wish to maintain a speed of 60 KPH, you will use your speedometer to maintain that speed. You will drive a little faster if your speedometer needle drops below 60 KPH or you will slow down if it climbs above the required speed. You will use a KPI in the same way as your car’s speedometer. The only difference is that in most cases, you won’t wish to lower performance when a business activity exceeds the required standard. In fact, if your car has a fuel consumption gauge and you use this to try and drive economically, then you are making use of a bona fide KPI.