Glossary
Utilization rate
Utilization rate is the share of available hours that are billable or productive: forty hours paid, thirty billed, seventy-five percent utilization. Professional services firms live on it. The trap is that a target set too high has only one way to be met, which is people quietly working longer than the hours in the denominator.
01
Setting a utilization target that does not eat the weekends
A weekly row where you can get the hours weekly, and a goal band suits it better than a single target. Green between a floor and a ceiling, red on both sides of that. The ceiling is the point of the band: a week at ninety-five percent is a warning about next quarter's resignations rather than a result to repeat.
Utilization is a ratio, so both halves move. It rises when work comes in and it also rises when somebody resigns and the remaining hours absorb the same workload. Read it beside headcount and hours worked, or the board can show three green quarters while the team burns out. The measure is honest; the target is where the damage gets done.
Worked example: A twenty-two-person design studio ran a target of eighty-five percent. It was met for two quarters, during which unpaid overtime went from occasional to normal and three designers resigned within five weeks of each other. The row became a band of sixty-five to seventy-eight, with hours worked beside it and the studio lead owning both.
Sources: kpi.org/kpi-basics; klipfolio.com/resources/kpi-examples
Goal band
A goal band replaces a single target with a range: green above one number, red below another, and a middle zone that means watch this.
02Ratio metric
A ratio metric divides one number by another: win rate, cost per lead, revenue per employee, the percentage of orders shipped on time.
03Revenue per employee
Revenue per employee divides annual revenue by full-time equivalent headcount and gives one crude read on how much a company produces per person.
04KPI examples by department: sales, ops, finance, HR
Concrete KPI examples for each department in a small company, tagged leading or lagging and weekly or monthly, to help you build a Scorecard that works.
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