Four “Must-Have” Company Perfomance Metrics For Any Business
In our discussions of office productivity, we’ve mentioned publishing performance metrics as a way to keep your employees motivated and moving forward. Today, we are going to go more in-depth on some of the most basic, and effective, types of metrics that can help boost your company’s productivity and engagement. While we’re going to cover the four general categories of metrics that can apply to most offices, it’s also important to note that many departments require more specialized metrics to help them understand what their particular goals are.
Effective performance metrics are ones that can easily be compared to established benchmarks or objectives.
What is a Performance Metric anyway?
To begin with, a performance metric is a measurable quality that is used to monitor and track the status of a specific process. They can cover a wide range of categories, such as business and marketing, as well as individual performance and customer satisfaction. The important thing to remember is that effective performance metrics are ones that can easily be compared to established benchmarks or objectives. By comparing them to previously achieved goals, the metrics are given context, which allows individuals to better understand the progress they’ve achieved.
Aside from helping promote productivity, this infographic from forteresearch.com outlines a few other reasons metrics are important.
What are the four basic types of performance metrics?
Though metrics are highly qualitative, the four generally accepted metrics categories are:
- Efficiency and Productivity Metrics
Efficiency and productivity metrics aren’t focused on who creates the most output per day. Efficient and productive employees are the ones who use their time wisely and are able to complete tasks the most effectively.
Measuring efficiency and productivity is based on comparing the time spent on a project to how much work was done. But don’t forget to include quality! Having a high quantity of output may look good, but work that was done with fewer errors and higher quality will produce a better value.
- Training Metrics
Whether an employee has been at the office for five days or five years, training is an important part of keeping your employees’ efficiency and productivity at its best. In fact, training is just as important at five years as it is at five days. Regular training is required in order to ensure that your employee keeps up with the ever-changing business landscape.
However, providing that training, whether it comes in the form of seminars, workshops, or professional learning events, can be costly, and learning for learning’s sake is not usually a wise use of time or money. The best way to measure the ROI for training opportunities is not only to take note of how many employees are participating, but how often they’re applying the techniques they’ve learned to their daily work.
- Goal Setting Metrics
Out of all the metrics, goal setting metrics are the most focused on individual performance. By sitting down and discussing their goals with their manager or supervisor, an employee is able to define their objectives: all the things they hope to achieve by the end of the day, the month, the quarter, or the year. Measuring goal-oriented metrics is fairly straightforward; it’s just a matter of checking to see that the employee is completing their objectives in the allotted time frame. The key to getting good metrics here is to make sure your employee is setting attainable, but challenging goals.
- Customer Satisfaction
The primary purpose of customer satisfaction metrics is to establish a baseline number for tracking how your customers feel about your product/service, and whether or not changes made have had a positive impact. A business is nothing without its customers, and tracking their approval ratings will help you make informed decisions regarding your product or service. There are a great number of ways to monitor customer satisfaction, such as the Customer Satisfaction Index (ACSI), the Net Promoter Score (NPS), and the Customer Effort Score (CES).
How do I create good metrics for my entire company?
With these four general categories in mind, how do you start narrowing down to more specialized metrics? The main thing to keep in mind is that good metrics are:
- A ratio or rate
Being comparative means that the metric can be compared to itself over a period of time, such as once a month, or every quarter. An understandable metric is one that can be shown to anybody, not just the people how came up with it, and have what it’s measuring be easily recognized and understood. Ratios and rates make good metrics because they are inherently comparative, making it easy to spot trends and changes in performance. And finally, a good metric is one that is actionable. As metrics change, they need to be responded to in some way. If a metric changes, and you know exactly what to do in response, then that is a good metric.
Choosing the right metrics for your business can be a matter of trial and error as you work out what’s relevant to your company, and your department, but with these guidelines in mind, you can find the right metrics for you a little faster.