Step 1: Identify Key Performance Areas

Authors: Phil Kenkel, Oklahoma State University,, and Bill Fitzwater,
Oklahoma State University

Key performance areas (KPAs) are the few factors that greatly influence a business’ success. The number of KPAs depends on the company and the industry. One of the difficult tasks of the board is to identify (with the manager’s assistance) those areas in which performance vitally affects the success or failure of the firm. Some potential KPAs for agricultural cooperatives include:

  • Facilities. Does the cooperative have and maintain the necessary facilities to operate efficiently, relative to competitors’ plants?
  • Finances. Can the firm pursue plans and meet current and future obligations?
  • Productivity. How well do human resources, facilities and finances combine to provide marketable products and services?
  • Sales volume and market position. Are sales sufficient for efficient plant utilization and effectiveness in the marketplace?
  • Personnel. Are formal recruitment, training, performance and compensation policies in place and being adhered to?
  • Member relations. Do members understand and accept company objectives? Do the services of the cooperative match member needs?
  • Departments. Sales volume, productivity and financial performance for the major departments of the firm can also serve as KPAs.