Indicators come in two directions. One reports what already happened; the other predicts what will. Every question in this unit turns on that split.
The two definitions
- Lagging indicator: a metric describing an activity or change in performance that has already occurred.
- Leading indicator: a metric describing an activity that can change future performance and predict success in achieving strategic goals.
Learn the leading-indicator wording exactly. SHRM's glossary phrasing is "predict success in achieving strategic goals," and the keyed choice usually reproduces it.
What they are not
- A metric comparing actual spending with budgeted spending is budget variance, one use of budgets among the BASK's financial analysis terms. It is not an indicator category.
- A metric measuring the consistency of a survey instrument is reliability, a measurement concept under Analytical Aptitude.
- "Trend analysis" is a business intelligence technique listed in the BASK, not a category of indicator. Choices that offer it as a third indicator type are inventing a term SHRM does not define.
The scorecard link
The balanced scorecard depicts performance against goals, lagging indicators and leading indicators. That is why the scorecard is the tool that fixes a backward-looking dashboard: it holds all three.
The scenario pattern
A leader complains that reporting is "all last quarter's numbers" with no warning of trouble ahead. The keyed action is to add measures that can change future performance and predict success against strategic goals alongside the existing results measures.
- Do not delete the lagging measure. Turnover is a valid lagging indicator; the answer balances it, it does not discard it.
- Do not report the same backward-looking data more often. Weekly lagging data is still lagging.
- Do not trade measurement for narrative opinion from department heads.
Carry this in: add, do not swap. The keyed answer keeps the existing results measures and puts predictive ones next to them.