Weighted Averages

1 Embedding Weight Constants in Formulas

For example if you have three KPIs that you want to weight at 40%, 35% and 25% respectively:

Annual_Weighted_Score = (KPI1 * 0.4 + KPI2 * 0.35 + KPI3 * 0.25)

This approach works well when:

• Your weights are predetermined and don't change frequently
• You have a relatively small number of KPIs to combine
• The weights add up to 100% (or 1.0)

2 Calculated Proportional Weights

This is used When weights should be proportional to another business metric, you can calculate them within the formula.

For Example:

If weights should be proportional to revenue contribution:

Annual_Weighted_Score = (KPI1 * Revenue1 + KPI2 * Revenue2 + KPI3 * Revenue3) / (Revenue1 + Revenue2 + Revenue3)

3 Creating Pre-Weighted Metrics

Create a new set of calculated metrics that are already weighted versions of your original KPIs.

Example:

Create Weighted_KPI1 = KPI1 * 0.4

Create Weighted_KPI2 = KPI2 * 0.35

Create Weighted_KPI3 = KPI3 * 0.25

Then: Annual_Weighted_Score = Weighted_KPI1 + Weighted_KPI2 + Weighted_KPI3

This approach works well when:

• You need to use the weighted versions of KPIs in multiple calculations
• You want to maintain transparency about which weights are applied to which KPIs

More information on adding KPIs can be found here.
More information on creating calculated KPIs can found here.