Can a KPI Be Binary?

Yes, a Key Performance Indicator (KPI) can be binary, offering a simple "yes/no" or "achieved/not achieved" measurement. Binary KPIs are particularly useful for:

  • Compliance checks
  • Project milestones
  • Quality control pass/fail criteria

Advantages:

  • Clear and unambiguous
  • Easy to track and report

Limitations:

  • Lack granularity
  • May oversimplify complex situations

Example: Regulatory Compliance KPI

Compliance Status = {
    1 if all regulatory requirements are met,
    0 if any requirement is not met
}

Best Practices:

  1. Use in conjunction with more nuanced KPIs
  2. Clearly define criteria for "yes" or "no" outcomes
  3. Regularly review relevance and effectiveness

For strategies on effectively implementing binary KPIs, see our guide: Leveraging Binary KPIs for Clear Performance Measurement.

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