It is essential to measure employee productivity to align their performance with the core objectives of the business and also identify potential shortcomings and the scope for improvement. Several parameters can be used to measure employee performance. Let’s explore some key employee performance metrics in this article.
Employee Performance Metrics: An Overview
Employee performance metrics or key performance indicators are used to measure the performance of employees in the workplace. These metrics can vary from organization to organization, depending upon their business goals. In a nutshell, these indicators show how well an individual or a team is performing against predetermined objectives.
Human resource teams and business owners should measure the performance of their employees to ensure business productivity, avoid any pitfalls, and identify the scope for upskilling and improvement.
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Key Employee Performance Metrics
Companies use a wide variety ofsystems to measure employee performance and productivity. Here are a few key employee performance metrics used in all modern-day organizations.
Work Quality
The quality of work produced by employees is arguably the most vital metric to measure employee performance. However, it can be the most challenging to define. It’s more complicated than only looking at the number of sales secured or calls made. It’s more about the quality of the results produced.
Are the connections made by the salesperson meaningful and helpful for the organization in the long run? Was your customer support executive able to fulfill your customer’s expectations? These are the kind of questions that refer to the quality of an employee’s work.
Work Quantity
Work quantity is also a vital employee performance metric. It could refer to things such as the number of products manufactured, sales, invoices, and others such aspects of employee performance that can be quantified.
Let us discuss some examples:
Sales/Units Produced: Work quantity is more than just measuring the numbers of customers won by a sales rep. It can also refer to a wide range of employee performance metrics such as the number of calls attended, lines of code written, reports created, etc.
Active Task Volumes: Nowadays, most work environments require employees to multitask and handle a couple of projects at the same time. The employee’s ability to multitask and handle timelines is also a critical employee performance metric.
Units Per Time Period: An employee’s potential to resolve a customer’s query or specific business challenges quickly is another important KPI. With call centers, for example, the number of calls taken is a direct indicator of productivity.
Employee Work Efficacy
Employees must complete their work on time. They need to be good at handling deadlines and time limitations and also utilizing the resources available to get things done efficiently. Missed deadlines can cause substantial setbacks to a business. Employee performance metrics to measure the work efficiency of an employee include:
Overtime Rates: Overtime rates are not perceived in the same way as they were five years back. Now, employees working more than their scheduled time can lead to higher overheads and impact your EBITDA margins.
Error Frequency: It is crucial to measure error rates. If errors occur more frequently, it will affect the project quality and also delivery timelines.
Time to Close Leads: The investment of time and effort that an employee makes in closing a lead is also another excellent KPI.
Organizational Efficiency
This metric indicates the return on the human capital investment on an employee for the organization. Some critical organizational efficiency indicators are as follows:
Revenue Per Employee: The amount you are earning per employee on an average is a straightforward way to measure the overall efficacy of an employee.
Human capital ROI: Calculating the benefits gained from human capital investments act as an accurate metric for evaluating employee performance. HR investments should translate into revenue for the company.
Other Indicators
The way businesses function has changed. Remote work has become mainstream, which has also led to a significant shift in employee performance metrics. However, there are still some parameters that remain constant indicators of employee performance and efficiency. These include the following:
Attendance
A few years back, attendance used to be one of the most crucial employee performance indicators. While it may sound counterintuitive, the relevance of attendance tracking has increased with the rise in remote work. With employees working from different locations, not ‘showing up’ for work is easy.
Employee absenteeism can put up added pressure on other team members, which can affect the quality and quantity of their work. Poor attendance can be due to various reasons, such as lack of motivation, burnout, or health issues. It is the responsibility of the business leaders and the HR department to take note of these factors and ensure that the organization is never understaffed or that their employees are overworked.
Employee Helpfulness
Employee helpfulness is also a key employee performance metric for many companies. It can be measured by asking simple questions like “who in your team or department has helped you the most?”
Helpfulness might not directly add to business revenue, but it is crucial for fostering teamwork, enabling a team to work together to complete complex tasks and overcome operational hurdles. Since helpfulness is not a quantitative metric, asking questions can be a great way to determine which employees tend to help their team and department the most.
Initiative
Leadership is an exceptional quality, and you need to nurture employees that show leadership potential. Some employees will proactively reach out to you to understand what they can do better to get ahead in their careers. Some of them even take the necessary steps to improve their performance entirely on their own.
However, like helpfulness, employee initiative is also a difficult metric to measure, and the best way is to do that is by keeping track of the number of times you notice an employee proactively taking charge.
Summing Up
HR managers need to set up measures and metrics to evaluate the performance of their employees. However, at the same time, it is crucial to remember that employees are humans and not mere resources. Therefore, qualities like helpfulness and relationship building, which might not add directly to the business objective, are also valuable and should not be overlooked.
What do you think of these employee performance metrics? Would you like to add some more to the list? Do let us know in your comments.