101: Performance metrics

Employee performance metrics are values tracking how a team member is performing for a company. Data points can vary, of course, depending on the industry and position. And some metrics are easier to quantify than others, especially when it comes to soft skills like active listening. Here are points of consideration when it comes to capturing employee contributions. Benefits of performance metrics go beyond reviews. Reducing turnover is one of the many positives of having them in place, according to Robert Izquierdo in The Blueprint, The Motley Fool newsletter. “Without performance metrics, [employees] have no way to gauge if they’re doing well,” he writes. “When it’s time for a performance evaluation, the lack of metrics conveys a feeling that review ratings and compensation increases are arbitrary. This leads to reduced morale and increased likelihood of turnover.” Setting expectations, metrics also improve performance, he said. Align performance metrics with what your clients value. “Think about what employee behaviors are most valuable to your customers … Put that at the center of your measurement methodology,” advises Jon Picoult at Hiring.Monster.com. Organizations suffer with poorly designed methodology, he said, for example: A service center measuring the speed with which staffers handle calls and then wonders why customers’ issues aren’t thoroughly resolved; a company putting too much importance on quarterly sales targets as opposed to the long term, resulting in executives making short-sighted decisions; or manufacturing firms measuring workers on production volume and then struggle with quality of finished goods. Consider metrics as management infrastructure. “I’d argue they’re foundational,” writes Forbes.com’s Victor Lipman about employee performance metrics, helping managers. “Without them, how exactly do employees know what's expected of them? And how do exactly managers know what to manage to? It can easily dissolve into a ‘he said-she said’ guessing game – not the kind of rigor you want to bring to the management process.”