For every KPI you devise consider if the measurement is fair, if the information is useful and accurate, and if there is a benefit. If the answer to all of these is yes, you are almost there. If you can also say that the KPIs are used to consider and create further improvements then you will have cracked it.
Well thought out, accurately compiled payroll performance measurements managed in a spirit of no blame can provide the management with the confidence that the service provided to employees, HM Revenue & Customs and other third parties is accurate and compliant. As with any quality management process, buy-in at every level will maximise the benefits of the work involved.