CHALLENGES WHEN DEVELOPING PERFORMANCE INDICATORS Brindusa Maria POPA Regional Department of Defense Resources Management Studies, Brasov, Romania Developing key performance indicators (KPIs) represents one step closer to the achievement of objectives and strategic vision of the organization. They are important elements of the pathway towards performance, they evaluate and indicate the level of progress, guide the organizational strategy, they can be considered even the qualitative or quantitative expression of the execution of the strategy. Building reliable and appropiate measurement systems is one of the most difficult stage in the performance evaluation process. Such systems of management will help the executives and the management teams identify and build upon the elements that create competitive advantage and opportunities for better results. Key words: KPI, KPQ, measurements, culture, strategies, goals, objectives. 1. ORGANIZATIONAL STRATEGY AND PERFORMANCE Nowadays, the trend in societies and in economies is a constant growth in complexity and volatility. Organizations, as part of the social and economic environment, are influenced by these phenomena thus, establishing accountability and strategy has became a crucial, but very sensitive matter for managers. With the purpose to respond as accurateley as possible to all these changes, measurement systems have been developed in order to evaluate organizational performance. Developing reliable and appropiate measurement systems is one of the most difficult stage in the evaluation process. Such systems of management will help the management teams identify and build upon the elements that create competitive advantage and opportunities for better results. One of the buzz terms of the decade is KPI (Key Performance Indicator). Everyone agrees on the importance of KPIs since they are closely linked to the accomplishment of objectives and of the organizational strategic vision. They are important elements of the pathway towards successful achievent of objectives, they evaluate and indicate the level of progress, guide the organizational strategy, they can be considered even the qualitative or quantitative expression of the execution of the strategy. According to Dennis Mortensen “A KPI: 1) Echoes organisational goals, 2) is decided by management, 3) provides context, 4) creates meaning on all levels of the organization, 5) is based on legitimate data, 6) is easy to understand and 7) leads to action.” [1] Despite their important role, we should be very careful when establishing and using KPIs. One of the most frequent problems arises from the overusage of such indicators, meaning that, not everything should be measured. According to specialized literature (some say Peter Druker, others say Edward Deming), „what gets measured, gets done”. This is true, but should everything be measured? We should measure only what helps us make better informed decisions in order to diminish uncertainty and to clarify the direction to be taken. We should measure only the things that can tell what is most important in and for the organization. Therefore, establishing the right indicators is not simple. A KPI is a metric, but a metric is not always a KPI. However, if the metric can be used as source for recommendations that could impact positively present or future ways of action, it can be a KPI.