Employee performance metrics aren’t just benchmarks for performance reviews and promotion considerations. They’re also a key to driving business growth and success.
The right measurements can improve employee wellbeing, productivity, and retention. But it’s not always easy to know how to evaluate employee performance in a helpful way. To get the most out of these powerful tools, you need to know which metrics to track.
In this article, we’ll define employee performance metrics and share why they’re so influential. We’ll also look at some of the top metrics that will help you and your employees perform
What are performance metrics?
Performance metrics are measurements that show how well employees are performing in their jobs. The metrics that matter most to your results are also a reflection of how well your organization is performing.
These noteworthy metrics are known as key performance indicators (KPIs) or objectives and key results (OKRs) and are a way of setting measurable goals and tracking their outcomes to gauge company health.
Performance metrics can cover quantifiable measures like productivity, quality, or efficiency. However, many of the performance indicators that affect business success can’t be boiled down to numbers (think soft skills like communication or effective listening).
Because strong team communication can impact your results just as much as the number of deals closed or in a week, it’s vital that you measure and track both types of data.
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Why use performance metrics to evaluate employees?
Measuring results helps both employers and employees impact the company’s progress. Tracking employee performance may seem strict at first glance. But it’s actually a way to understand how your team is progressing and gives you a chance to recognize your people’s efforts.
For instance, tracking employee performance can help you:
- Recognize and address performance issues. Seeing the numbers linked to KPIs for employees can help employers identify skills gaps in their teams.
- Motivate productivity. If you want people to care about customer service, share numbers from customer satisfaction surveys. If you’re concerned about productivity, share this month’s numbers compared to previous months. When employees see what’s important to leadership, they’ll prioritize those areas in their work.
- Drive career development. KPI reports set expectations. They let team members compare their current performance with where they want to be, which helps them set clear career goals.
- Build a culture of appreciation. Records of employee progress help leaders recognize achievements. Knowing which metrics matter will show them how to recognize hard-working employees in a way that supports improvement goals.
All of these are good reasons to start tracking key metrics today. But what are the metrics that matter?
5 key employee performance metrics to track
Not all measurements are created equal when it comes to influencing company results. And, as mentioned, some are more difficult to turn into tangible KPIs for employees.
Here are five employee performance metrics examples to get you started as you determine which are right for your organization.
1. Quantity
These are the easiest to measure and are likely the first that come to mind when you think about employee metrics. These apply to productivity that can be directly measured in numbers.
For instance, “how many units are produced per hour” or “how many sales calls are completed in a week.”
The numbers are a clear indication of work getting done, so they’re important to track. But they don’t tell the whole story. You can’t rely solely on this metric as an indicator of success. Be open to learning more through additional KPIs like those on the rest of this list.
2. Quality
The quality of an employee’s work affects customer satisfaction and team productivity. Substandard work can hurt your image and lead to rework, which can harm team morale. Staying on top of any issues helps you avoid these problems.
Quality may seem like an abstract idea, but you can take measurements that are good indicators of how good employee work is. For instance, “the number of bugs in a product” or “the number of faulty units.”
For jobs with less concrete products, say, customer relations, you can measure the impact they’re having, like customer satisfaction scores.
3. Effectiveness
An employee’s effectiveness is often evidence of their problem-solving or innovation skills. Someone who gets their work done correctly and on time shows they know how to tackle problems or optimize processes.
Effectiveness measures can include things like “whether employees consistently meet deadlines,” “how much overtime they take,” “how often they reach their goals,” or “if they correctly prioritize tasks.”
These numbers can help leaders know how to help employees progress. For instance, an employee racking up lots of overtime may need help prioritizing their work, especially considering if they are exempt or non-exempt employees. Or, those who are consistently on time may have strategies for streamlining work that could benefit the whole company.
4. Teamwork
Working well in a team is a vital skill in many industries. Companies are stronger when people are willing and able to brainstorm together, collectively solve problems, and reach out to other teams to lend a hand.
Again, these measurements aren’t as straightforward as quantity. But you can gather feedback on a scale by running pulse surveys asking employees about how they or others step up to help out their team. You can also have leaders track how often employees volunteer to help out with things not formally assigned to them.
Teamwork metrics help you see where your strongest team players are but also give you a sense of which employees could use some coaching to improve the overall team dynamic.
5. Learning and development
Employee development is crucial to keeping your company competitive in an ever-evolving workplace. Track how successful your training programs are to make sure you’re keeping up.
Training success can be partly measured by things like completion rates and quiz scores. But you can also gauge whether the skills and knowledge from training are being applied back on the job.
L&D metrics should include things like knowledge ratings from before and after the training and feedback scores from 360 surveys of managers and colleagues around how performance has changed.
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Make the most of your metrics
Tracking the right KPIs is key to understanding your company’s health and developing a successful performance improvement plan. But it’s not enough to choose strong metrics and begin tracking. Effective metrics measurement requires several steps:
- Include employees in planning. It’s hard to determine which metrics matter in a vacuum. Get a sense of what really matters in your company by asking employees and getting their take on your proposed KPIs. You may get insights that will help shape your initial plan.
- Share metrics frequently. Don’t just communicate the numbers during performance reviews. If you want the measurements you track to have an impact, make them front and center. Do regular reviews in team meetings or send out daily email updates. The more often people see the numbers, the more they’ll be motivated by them.
- Adjust your goals regularly. Review your employee performance metrics and the impact they’re having constantly. If the numbers are improving but you’re not getting closer to your employee performance goals, you may be measuring the wrong thing. Priorities can also shift with a changing market, and sticking to metrics that don’t support new goals will waste time and resources. Revisit your KPIs for employees regularly to ensure they’re always relevant.
Prioritizing employee performance metrics will help you motivate and develop your people. With the right goals and information, their career paths will be clear. And when your employees succeed, so do you.
