With the wealth of ways to stack up data out there, it’s important to separate out the ones that matter. Getting the most out of your team is critical to maintaining a competitive advantage. Accomplishing this requires monitoring and evaluating employee performance consistently.
It’s also useful to have a track record established when you decide to promote or demote an employee. Here are five key performance metrics that every good manager keeps track of:
This is one of the most difficult metrics to measure, as it appears to be entirely subjective. However, in an era with no shortage of meaningless numbers, quality is also one of the most important metrics to keep in mind. After all, if your employees aren’t producing quality work, then why are they working for you?
In Blink: The Power of Thinking Without Thinking, author Malcolm Gladwell has this to say: “The key to good decision making is not knowledge. It is understanding. We are swimming in the former. We are desperately lacking in the latter.” He contends that subject experts make strong determinations about the quality of a given subject without the use of statistics.
Trust your managerial instincts when making judgments about an employee’s work. Perhaps the challenging aspect of this is regularly keeping track of each employee’s performance. One way you can do this through having employees set individual goals, then following up with them.
02. Revenue per employee
On the opposite end of the spectrum is this straightforward way to measure your whole team’s performance. This is a simple calculation: total revenues for a given time period divided by the number of employees. This provides a snapshot of how well you’re doing overall.
This metric is most useful for determining employee engagement. How many days are employees missing? Are they coming in late or leaving early? All of these are usually indicators of a problem, whether it be related to health or motivation.
Conversely, you can also see employees who never miss a day, always show up early, and always leave late. While they might be doing great work, these employees are candidates for burnout.
The Society for Human Resource Management has a helpful sheet for calculating turnover cost. While there’s plenty of data out there about the cost of turnover, determining the actual cost for your business is important.
Keeping track of the quality of employees you lose and why they leave is important too. Use exit surveys to find out if there’s anything the business could improve on to retain a talented workforce. Or better yet, use an effective tool to solicit employee feedback before that rock star team member leaves.
Like quality, this isn’t always easy to measure. Each employee has a slightly different approach. An employee who works slowly but methodically is still getting the job done.
But there are certain indicators that efficiency is down. For example, if an employee is consistently missing deadlines or using a lot of overtime, it may be time to talk to them about time management.
We have more data available to us than ever before. It’s finding and utilizing relevant, meaningful data that’s key to keeping your business running.