Key Performance Indicator (KPI)

A quantifiable metric used to monitor and evaluate how effectively a project or organization is meeting its objectives.

Key Points

  • KPIs are numeric measures tied to clearly defined objectives and success criteria.
  • Each KPI should have a formula, data source, target threshold, owner, and review cadence.
  • Use a balanced mix of leading (predictive) and lagging (outcome) indicators.
  • KPIs enable timely decisions, transparency, and continuous improvement.

Example

On an agile software project, the team tracks defect escape rate as a KPI: the percentage of defects discovered after release, with a target of under 2%. The data is pulled weekly from the issue tracker. When the rate exceeds the target, the team adds automated tests and improves code reviews to bring the metric back in range.

PMP Example Question

Which statement best describes a Key Performance Indicator (KPI) in an agile project?

  1. A qualitative observation of team morale captured in retrospectives.
  2. A quantifiable measure with a target used to monitor progress toward objectives.
  3. A hierarchical list of deliverables in the work breakdown structure.
  4. A predefined plan for addressing high-priority risks.

Correct Answer: B — A quantifiable measure with a target used to monitor progress toward objectives

Explanation: KPIs are numeric, goal-aligned metrics. Team morale is useful but not a KPI unless measured; the WBS and risk response plans are project artifacts, not performance indicators.

How To Land the Job and Interview for Project Managers Course

Take the next big step in your project management career with HK School of Management. Whether you're breaking into the field or aiming for your dream job, this course gives you the tools to stand out, impress in interviews, and secure the role you deserve.

This isn’t just another job-hunting guide—it’s a tailored roadmap for project managers. You’ll craft winning resumes, tackle tough interview questions, and plan your first 90 days with confidence. Our hands-on approach includes real-world examples, AI-powered resume hacks, and interactive exercises to sharpen your skills.

You'll navigate the hiring process like a pro, with expert insights on personal branding, salary negotiation, and career growth strategies. Plus, downloadable templates and step-by-step guidance ensure you're always prepared.

Learn from seasoned professionals and join a community of ambitious project managers. Ready to land your ideal job and thrive in your career? Enroll now and take control of your future!



Launch your career!

HK School of Management delivers top-tier training in Project Management, Job Search Strategies, and Career Growth. For the price of a lunch, you’ll gain expert insights into landing your dream PM role, mastering interviews, and negotiating like a pro. With a 30-day money-back guarantee, there’s zero risk—just a clear path to success!

Learn More