What do "key performance indicators" (KPIs) measure?

Key performance indicators (KPIs) are specific, quantifiable metrics that organizations use to evaluate their success in achieving key strategic and operational goals. They serve as benchmarks to measure progress and performance over time. By setting KPIs, businesses can focus on what is most important to their objectives and assess how well they are doing in reaching these desired outcomes.

For instance, a company might have KPIs related to sales growth, production efficiency, or customer retention rates. These indicators help guide decision-making, inform resource allocation, and ensure accountability across teams. Therefore, the correct approach to measuring success is centered around aligning KPIs with overall strategic goals, making option B the most accurate representation of what KPIs measure.

While employee satisfaction, market share, and customer feedback are important aspects of a business's performance and can be measured through various metrics, they do not encompass the broad scope of strategic and operational goals as effectively as KPIs do.