5 Key Performance Indicators for Employees for Performance Management

Key performance indicators for employees indicate job performance and gauge individual success as it relates to departmental and company-wide goals. KPIs quickly show where performance is high and where support is needed or expectations should be adjusted. Leadership can use performance management software to set and track goals for every employee, which are known as key performance indicators (KPIs).

Why should you measure key performance indicators for employees?

When managers set and track KPIs for employees, they unlock key insights about performance and productivity. KPIs help you identify employees’ strengths and implement strategies that produce results. If teams are falling short of their KPI goals, they can make adjustments and monitor the impact of those changes. The insights gained from setting and tracking KPIs have an effect across the business: they inform strategies from recruiting to sales to marketing, give everyone a realistic picture of output and achievements, and help guide individual performance goals.

Employee key performance indicators are a great benefit to the entire organization:

  • Create transparency around real efficiency and output
  • Establish realistic goals and metrics for success at individual and company levels
  • Provide performance insight to identify A Players and growth opportunities
  • Enable leadership to adjust expectations according to patterns and trends
  • Motivate and engage employees to do their best work with clear, attainable goals

Five examples of employee key performance indicators:

Key performance indicators for employees vary across industries and roles, but they all have one thing in common: they measure whether goals were met, exceeded, or fell short. Effective KPIs align with business and departmental goals but are flexible depending on how success is defined at your organization.

Here are five KPIs for employees that provide a more complete understanding of both individual and overall performance:

1. A financial KPI: Quarterly sales goals or money saved through employee retention

Revenue-generating teams like sales usually have straightforward financial key performance indicators, like quarterly and yearly sales. When the sales team isn’t hitting their KPIs, leadership can see if one employee is falling behind or if sales are down across the board and address the issue appropriately. HR teams might set goals for reducing hiring and onboarding costs through retention efforts, and can track whether their efforts are working or need adjustments.

2. A productivity KPI: Number of tickets or number of parts produced

Productivity key performance indicators for employees give a quick overview of both team and individual output and enable managers to gauge those who are under vs. over-performing. Managers of customer support teams can measure employee key performance indicators like the number of tickets completed or the number of calls handled. Manufacturing plants can track the number of parts completed per employee or per shift. Tracking productivity KPIs regularly shows how output varies over time so that managers can adjust KPIs according to changes in team size, seasonality, and other factors.

3. A customer KPI: Customer retention rate or repeat website visitors

Tracking a customer KPI is a great way to determine if customer-facing strategies are hitting the mark. Marketing teams look at metrics like the number of repeat visitors to the website and the open rate of customer emails to see if their digital marketing strategies are effective. Sales and customer support teams can keep tabs on overall customer satisfaction by sending satisfaction surveys after a customer completes an order or talks to a representative. Retention rate is another useful metric since acquiring new customers is as much as five times more expensive than retaining your existing customers. When employees improve one of these customer KPIs, like increasing the average customer satisfaction score or click-through rate in customer emails, you can recognize their success and include achievements in their performance reviews.

4. A people KPI: Employee engagement score or retention rate

Just like customer experience determines their retention and satisfaction levels, employee experience determines theirs. Monitoring employee engagement and implementing a regular performance review process, like with performance management software, can help you identify excellent employees, as well as those who are at risk of quitting or need additional training. By giving employees clear goals, measuring performance, and checking in with them regularly, you get a comprehensive picture of overall engagement and productivity levels. Key performance indicators that look at both employee feedback and performance help create a better employee experience and support a productive, motivated workforce.

5. A time-based KPI: Hold time reduced, faster call resolution, or overtime hours logged

Time-based key performance indicators show when a process becomes more efficient or issues are resolved more quickly. Customer support teams can use time-based KPIs to monitor efficiency for individuals and teams. Tracking customer hold times and average time to resolution helps management set realistic expectations and focus on improving customer experience where it counts. Managers can also keep track of overtime hours to see if output expectations are realistic or if overtime hours should be adjusted.

KPIs offer insight into employees’ efficiency, productivity, and engagement levels. They give managers a framework for addressing successes and challenges during performance evaluations. KPIs are an excellent way to set clear, achievable goals and keep up with each person’s output and growth. Following an especially tumultuous year, it’s essential to develop performance management strategies that center your people, prioritize transparency, and recognize their achievements. Define the most important KPIs for your employees and create a performance management strategy that sets everyone up for success.

ClearCompany’s award-winning Performance Management System can help your organization evaluate employees and track performance over time. Interested in a faster, more effective performance management solution? Sign up for your free Performance Management demo today.

This article was originally posted on ClearCompany’s blog.

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As a Digital Marketing and Events Manager for ClearCompany, Meredith coordinates best-practice content and brand-awareness events with HR practitioners.

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Meredith Wholley

Meredith Wholley

As a Digital Marketing and Events Manager for ClearCompany, Meredith coordinates best-practice content and brand-awareness events with HR practitioners.

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