Empirical Research On KPI Orientation Mechanism

Since KPI was introduced into China in 1992, it has been used as one of the main methods of performance appraisal. Its core functions for decomposition of organizational goal, bounding employee behavior, evaluating work effectiveness and distribution achievement are used usually, but its guiding function has been always neglected.So, it brings about numerous questions when designing or implementing KPI. Such as, the employees boycott KPI because they don't know why they are assessed by KPI; Some illegal things are brought on by the employees just because KPI is impractically designed; KPI brings internal contradictions to organizations; KPI causes conflict with other management system because of its inadaptability; and so on. In order to fundamentally solve these problems, we suggest that enterprises should recognize the essential purpose of KPI to orientate the employees'enthusiasm, rather than just to assess and control employees.Firstly, we explicated that KPI system played a key role in guiding staff's enthusiasm. Based on Management Mechanism Theory, we deeply analyzed how KPI Orientation Mechanism worked. We thought that the enterprises can deliver their expectations to the employees, unite employee's personal goal with organizational goal through KPI system. Then, we put forward to the core hypotheses of this article. Secondly, on the basis of theoretical analysis and literature study,we developed the KPI's Orientation Mechanism Scale, which included four dimensions-Objective Definiteness, Objective Orientation, Goal Congruence and Staff Initiative. Thirdly, according to the empirical research, we proved that:there are significantly positive correlation between each other during the four dimensions; The enhancement of Objective Orientation and Goal Congruence can improve staff's initiative. Finally, we gave some advices for practicing KPI.