{"id":42046,"date":"2020-11-30T14:42:33","date_gmt":"2020-11-30T19:42:33","guid":{"rendered":"https:\/\/balancedscorecard.org\/staging\/?p=42046"},"modified":"2021-01-05T10:05:24","modified_gmt":"2021-01-05T15:05:24","slug":"kpi-development-when-to-use-ratios","status":"publish","type":"post","link":"https:\/\/balancedscorecard.org\/staging\/blog\/kpi-development-when-to-use-ratios\/","title":{"rendered":"KPI Development: When to Use Ratios"},"content":{"rendered":"\n\n[et_pb_section fb_built=”1″ _builder_version=”3.22.3″][et_pb_row _builder_version=”3.25″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”][et_pb_column type=”4_4″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_text _builder_version=”4.6.6″ hover_enabled=”0″ sticky_enabled=”0″]

\"\"Let\u2019s say you are managing a large organization and your HR director comes to you with bad news. The total number of employees leaving the company has skyrocketed. They show you the chart to the right to indicate that the raw number of employees leaving last year was below 20 and this year it is 50. Should you panic?<\/p>\n

The answer is that it depends. What if I told you that this year the company acquired a competitor and that the total number of employees had expanded from just over 500 to over 2200 (see the chart below), and so the turnover percentage<\/em><\/strong> (# leaving \/ total # of employees) had actually decreased slightly (see Turnover ratio). Would that make you panic? Probably not.<\/p>\n

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The point is that raw counts can be misleading if you are not careful about the comparisons you are making relative to the underlying population. You might have seen debates in the news about how political leaders or writers have highlighted raw COVID 19 counts to support an argument when a per capita ratio suggests a different conclusion. It\u2019s not that raw counts aren\u2019t sometimes useful, but it is important to be aware of what you are comparing and how the overall population might impact interpretation. We recommend that any measures that could be misinterpreted be expressed as a ratio. Common examples of ratios include:<\/p>\n