Deutsche Lufthansa AG operates one of the biggest aircraft fleets in the world and employs more than 115,000 people throughout its passenger and air-freight divisions, logistics functions, catering operations, maintenance and repair operations, and IT.
But until recently, the company’s KPIs were not centrally aligned. Because of decentralized governance, each business unit and division had its own definitions and data standards, and only a small percentage of the several hundred KPIs used could be applied across the entire organization.
The HR function realized that it needed to align its KPIs in order to assess its impact across the entire company. Therefore, Lufthansa conducted an audit of all potential KPIs—such as those currently in use by individual divisions, those required to align with the company’s overall people strategy and financial-reporting requirements, and those identified as external best practices. The total tally: 461 possible KPIs.
The process took several steps, but Lufthansa managed to consolidate the list and distill the number of KPIs to the 35 most strategically relevant, grouping them in four main clusters: financial HR indicators, workforce overview, HR and organizational efficiency, and HR core processes. (See the exhibit below.)