KEY PERFORMANCE

INDICATOR’S DEFINATIONS
ORIENT GROUP OF COMPANIES

MAY 16, 2016

Prepared By: Kiran Mehmood & Uzma Farooq
 KPI’s Calculation Parameters

Chapter 1: S A L E S

1a. Monthly Target Achievement:

This Defines Achievement %age of Actual Sales w.r.t Targets. But the Points Awarded will be
based on the Following Criteria

Achievements Points
70% 0%
70% to 100% Proportionate
=>100% 100%

1b. Follow up of Signed Annual Targets:

It defines the %age of Accumulated Annual Achievement w.r.t to annual Signed Targets. And
split the %age achievement Points in Categories (REF, AC etc.) based on the Gross Profit share
in Calendar year 2015.

Category %age

REF 45.0%

AC 25.0%

LED 15.0%

WD 7.5%

MWO 7.5%

Total 100%

1c. Follow up of planned dealer-wise monthly targets:

It compares Actual Achievement %age with monthly Dealer wise Targets and Computes
number of Channel Achieved as compared to target dealers assigned.

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Chapter 2: P L A N N I N G

2a. Signed Annual Qty. vs. Annual Target Quantity:

It Compares the annual target quantity with signed contracts and assign points according to
following Measures:

Criteria Targets>=Contracts
Status KPI Points
No 0%
Yes 100%

2b. Annual Target Planning Impact on Growth:

It equates Customer wise Plan Sales and Targets sales along with channel retention
consideration and assign Points by categorizing the result into 5 Slabs on Yearly Basis. Which
are prescribed below:
a. Over target: if Plan Sales or Plan channel is greater than targets (in either case, the
else condition should be equal to target) than it will be categorized as Over target.
b. Normal: if Plan Sales or Plan channel is equal to targets than it will be
categorized as Normal.
c. Share Lost: if Plan Sales quantity is less than target sales quantity than it will be
categorized as Share lost.
d. Dropped: if Plan Sales is less than target Channel than it will be categorized as
dropped.
e. Untapped: if target is not assigned it will be categorized as Untapped.

2c. Monthly Target Planning Impact on Growth:

It equates Customer wise Plan Sales and Targets sales along with channel retention
consideration and assign Points by categorizing the result into 5 Slabs on Monthly Basis. Which
are prescribed below:
a. Over target: if Plan Sales or Plan channel is greater than targets (in either case, the
else condition should be equal to target) than it will be categorized as Over target.
b. Normal: if Plan Sales or Plan channel is equal to targets than it will be
categorized as Normal.
c. Share Lost: if Plan Sales quantity is less than target sales quantity than it will be
categorized as Share lost.
d. Dropped: if Plan Sales is less than target Channel than it will be categorized as
dropped.
e. Untapped: if target is not assigned it will be categorized as Untapped.

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Chapter 3: C H A N N E L

3a. Number of Active Customers in a Month:

It computes the number of active customers in a month as compared to history channel (set as 4
preceding years).
 If Employee covers its target channels than he will get KPI 70% points.
 For the sake of channel expansion, 30% new target channel are assigned to every SO if he
complete its target channel and expand its channel list, by making sales to new customers
than he will get points in addition to 70%.
 If employee expand its market size by making sales to new customers, but does not meets
its history target channel, than he will not get additional 30% KPI points. The new
expansion will be net off against old target.

3b. Number of Active Customers in a Year:

It computes the number of active customers in a Year as compared to history channel (set as 4
preceding years).
 If Employee covers its target channels than he will get KPI 70% points.
 For the sake of channel expansion, 30% new target channel are assigned to every SO if he
complete its target channel and expand its channel list, by making sales to new customers
than he will get points in addition to 70%.
 If employee expand its market size by making sales to new customers, but does not meets
its history target channel, than he will not get additional 30% KPI points. The new
expansion will be net off against old target.

3c. Channel Expansion

Channel Expansion is computed in the following parameters:

 If sales against a customer in a history year repeats eight times than this customer will be
considered as “Active”.
 Sum of Active customers is called History Channel.
 New customer (not existing in History Channel) as compared to history channel are
getting 50% weightages.
 In order to consider the impact of new channel expansion on sales, 50% weightages is
allotted to New Channel’s sales Vs. Total sales.

3d. Reactivation of dead Accounts

This head outlook the Customers who have done the Business with Company in History years but
Discontinued in preceding year. In Current Year if those Dead Customers are Reactivated then
Points will be assigned according the %age of Total dead accounts.

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Chapter 4: A C C O U N T R E C E I V A B L E S

4a. Recovery against due/overdue balance

It calculates the points on the bases of Due/ overdue balance’s recovery according to the following
slabs:

criteria %age
Advanced cash 135%
Within half credit days 115%
Within due days 100%
Till 30 days of over due 50%
Past 30 Days 0%

The resultant percentage is divided to 200 for the sake of restricting the KPI Point Scale as 0% to
100%.
4b. Recovery of Bad Debts
The KPI Points are assigned at the recovery of bad debts on the bases of following parameters:

 Overdue balance standing for more than 365 days will be considered as “bad debts”
 KPI Points are equal to Recovery of bad debts divided by total balance of bad debts.

4c. Monthly Account Reconciliation

This definition based on that Sales Officer wise Customer’s Accounts should be reconciled monthly.

 It compared the Company Account Balance with Customer account balance and determines
the status of reconciliation (i.e. Reconciled / Not Reconciled).
 Numbers of Reconciled and not reconciled are computed through count.
 KPI points are equal to number of Reconciled Customer Accounts divided by Total number of
Customer Accounts.

Chapter 5: M A N A G E M E N T

5a. Employee Turnover

It calculates the employee turnover sales district wise on yearly bases.

 It considers the approved strength as per organogram and compares it with actual employed
employees. If there are some positions vacant which needs to be filled it will consider as in-active.
 KPI points are equal to Number of Active Employee divided by Total Employee in respective
year and sales district.
 This definition is not for Sales officer as it specifically relates to management cadre.

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 5b. Area Visits
To compute Area Visits the following measures are suggested however no computation is done due to
lack of data availability.

 Frequency of visits
 number of working hours spent in market
 Dealer's feedback
o Highly Satisfied.
o Satisfied.
o Dis- Satisfied.

Chapter 6: M I S C E L L A N E O U S

6a. Market Displays

This definition covers two below mentioned aspects:
1. Whether the market displays are designed at dealer’s site or not.
2. The display is up to required standard or not (Quality measure)
It depends on the feedback provided by the branch’s Head. KPI Points are assigned on the bases of
following table:

Status Points
Outstanding 100%
Excellent 80%
Good 60%
Average 50%
Poor 0%
Bad -10%
The weightages between these two indicators is assigned equally in order to calculate the final KPI
points.
6b. Sales Order Processing Time
This definition computes the SO wise Sale Orders Time and average out the Total time of Processing.
The Standard time for Sales Order Processing is one Days or less. So the KPI Points will be awarded
according to following Criteria.

Points Criteria
Processing Time Less than or Equal to 1 Day 100%
More than 1 day 0%

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