key performance indicator

Definition

A metric supposedly measuring what matters, inevitably gaming behavior as people optimize for the KPI rather than actual success. Commonly abbreviated to KPI by people who measure many things and understand few.

Example Usage

Our KPI is customer satisfaction scores, which is why we now bribe customers to rate us highly.

Origin

Management theory from the 1980s-90s, part of performance measurement frameworks

Fun Fact

Goodhart's Law states that 'when a measure becomes a target, it ceases to be a good measure'—a lesson KPI-obsessed managers never learn.

Source: Performance management and business analytics terminology

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