What Is a KPI in Aviation SMS
Key Performance Indicators (KPIs), also called SPIs (Safety Performance Indicators), are data metrics that indicate the baseline performance of your SMS for managing safety. The term Key Performance Indicators are indicative of the scope of KPIs:
- “Key” means that KPIs assess only the most critical areas of your SMS, namely a data representation of Safety Objectives;
- “Performance” means that you monitor aspects of your SMS that indicate how well it is functioning (safety, quality, operational, financial); and
- “Indicators” means that you are using data metrics to monitor your performance.
KPIs are created in direct response to your company’s safety objectives. When you monitor key performance indicators, you monitor how you are or aren't meeting your objectives.
Some best practices for KPIs are:
- They should change over time as your company updates safety objectives;
- They should be regularly reviewed;
- Each KPI should always be created in direct response to a safety objective; and
- KPIs should address front-line employees, middle management, and upper management.
Leading indicators prove to be excellent KPIs in aviation safety programs. You will monitor the progress of KPIs with classifications during issue management.
1 – Understand Relationship Between KPI and Safety Objectives
Key performance indicators should always be developed in direct reference to your organization’s safety goals and objectives. If you are reviewing a KPI and notice that no longer directly reflects a safety objective, it should be updated or removed:
As KPIs relate to safety objectives, here are important considerations for them:
- Relate to every level of company structure;
- Be short, medium, and long term in scope;
- Be SMART – Specific, Measurable, Achievable, Realistic, and Timely;
- Outline what types of performance are most important to the safety program; and
- Be clear about which objective each KPI relates to.
KPIs are the data representation of your objectives.
2 – Correctly Choose Key Performance Indicators
Here are several things to consider in order to correctly choose KPIs:
- List each safety objective, go through each objective, and document the KPIs that relate to that objective;
- Gather a large list of data metrics to use as KPIs, such as this list of40 leading indicators;
- Remove data metrics that are:
- Not quantifiable,
- Not able to be monitored,
- Not aligned directly with objectives, and
- Not specific to your company;
- Keep a list of KPIs that is as long or a bit longer than your list of safety objectives.
Similarly, here are the 5 rules for selecting KPIs – each KPI should be:
- Directly related to a safety objective;
- SMART (see above);
- Regularly updated, such as each time a KPIs parent safety objective changes;
- Manageable, which is another way of saying the you should be able to influence the performance of a KPI; and
- Custom tailored to your organization.
3 – Set Objectives for Key Performance Indicators
Each KPI should have objectives set in relation to how many times that KPI is classified in safety issues. For example:
- If you have a KPI for “Less than 5 employee injuries per year”; then
- You should set an objective of 5 for the Type of Issue classification “Employee injury”.
While not all of your KPIs will be able to have objectives set for them, many of your KPIs will. Some KPIs will require you to set objectives for multiple classifications. For example, with a KPI “Aircraft damage of less than 1,000,000,”, then you will set objectives for the Hazard “Aircraft accident” and Type of Issue “Damage to aircraft resulting in $$”
While the above classification examples are not real, they should get the point across.
4 – Set Automatic Notifications for KPI Classifications
Finally, you need to set notifications that are based off of your KPI objectives. This can be done automatically if you have a professional aviation safety database and SMS software.
It’s as simple as this:
- If you have a KPI classification with an objective of 5; then
- You should give that classification a notification threshold of 4; and
- If that classification is classified 4 times within a given time frame, you will be automatically notified.
Notification thresholds should all be set at one or two classifications before the objective, thus notifying you ahead of time that an objective is about to become non-performant.
Final Thought: Signs of Good KPIs
Here are some good signs of KPIs:
- Can be monitored with classifications;
- Are considered leading indicators;
- Touch on every level of organization (front-line operations, management, upper management);
- KPI list similar length to safety objective’s list;
- Regularly updated, with documentation to prove it; and
- Very clear correlation between each KPI and a safety objective.
These two resources should prove useful when developing or reviewing your KPIs: