- Tracking employee performance metrics is critical to business success.
- HR teams can often be overwhelmed by the sheer amount of data points available.
- Using an HRIS helps teams view the most critical HR data in one place.
A team is only as good as the sum of its employees. Measuring employee performance metrics, from lateness to overall productivity, is one of the most important duties of a manager today, especially in high-pressure jobs like sales, finance, and IT.
Fortunately, many companies have no shortage of data to draw upon. According to a study conducted by ExpressVPN, a privacy and security software company, 78% of companies with remote or hybrid workers already use software to monitor employee performance. Even in office-bound companies, HR professionals regularly track employee headcounts, salary and benefits trends, and disciplinary information.
The issue for many employers is managing the vast amounts of data at their fingertips. What statistics are worth considering? Are there unhelpful or even misleading data points to avoid when assessing employees? Perhaps most importantly, how can studying the right employee performance metrics help a team perform at its best?
One of the best ways to gather all employee performance metrics and determine which ones are important is with the help of a Human Resources Information System (HRIS).
What are employee performance metrics?
Employee performance metrics are the benchmarks a manager uses to determine how valuable an employee is to their organization. Sometimes these metrics are numerically based; for example, the number of deals a salesperson closes in any given month. Others are less quantifiable, like a team’s cohesion when carrying out complex tasks.
These metrics can measure whether or not an individual is good at their job, but they also cover other aspects of an employee’s tenure. They might indicate rates of absenteeism, salary level relative to performance, or the attitude other team members have towards a particular employee. All of these metrics give managers a birds-eye view of a particular employee’s contribution to their organization.
There are two major overarching systems that use employee performance metrics to improve a business:
Key performance indicators (KPIs) are used by businesses to track numeric goals. For example, requiring that a salesperson closes five deals in a month is a KPI, a simple and straightforward numerically driven goal. These can be applied to employees, teams, or even entire organizations.
Objectives and Key Results (OKR) can be used for both numerical and non-numerical goals. This is more of a step-by-step model that allows you to break down the end goals into smaller components. For example, an OKR might be to improve customer satisfaction when using an online platform, which would involve individual steps by employees to improve the platform’s overall web design, customer service, or marketing efforts.
Why should you track employee performance metrics?
With the help of an HRIS, it’s easy to come up with information on your workforce. But, why is tracking employee performance metrics a worthwhile job?
Help employees improve their game: About 71% of employees who believe their boss can identify their abilities are more engaged and enthusiastic at work, according to a Gallup poll. One of the best ways to really understand the strengths and weaknesses of an employee’s performance is to track the right metrics with the goal of helping them improve.
Find your business’s weak spots: Employee performance metrics can also identify problems that stem beyond individual workers. If employees with differing skill levels, salary levels, and backgrounds are all unable to meet the same KPI, the problem and solution might be systemic. Understanding where those weak spots lie is the first step towards fixing them.
Help customers understand your value: There is a reason why real estate and brokerage firms routinely mention their sales rep’s performance on their advertisements. Showing off your team’s impressive performance lets customers know they’ve picked the right company to meet their needs.
Employee performance metrics worth tracking
There are a plethora of employee performance metrics that an HRIS is capable of tracking. However, not all of them are relevant to your department. For example, the total number of monthly sales calls is not a useful metric for a non-sales team. Nor does the concept of ‘quality’ or ‘quantity’ always fit. For example, a coder working on a mass-produced piece of software can’t be evaluated with the same metrics used to judge a coder creating a bespoke software package for a client.
But there are a few employee performance metrics worth considering, regardless of a company’s size or purpose. A good HRIS can track the following:
Whether your employees work in sales, marketing, engineering, or customer service, productivity is perhaps the most important metric to consider. This metric can be broken down further into quality (how effectively employees close deals, finish products, or execute campaigns) and quantity (how many deals, products, or campaigns they finish in any given period).
Understanding an employee’s productivity is one way managers can assess whether they are a good fit for the company. It isn’t the only metric worth considering, but it can give a decent baseline of whether an employee is able to meet a company’s KPIs or OKRs, and not just for disciplinary purposes. In one initiative run by a call center, an individual reward system improved call times, frequency of calls, and customer service ratings by 43% within a year.
An HRIS can help managers track employee performance across a company from one convenient dashboard. It can list everything from employee notes to past performance reviews and scores, or anything that is necessary to judge the contribution of an employee to the company’s bottom line, in one convenient platform.
Employees can miss work for a whole host of perfectly legitimate reasons: personal illness, parental leave, or well-earned PTO. But chronic absenteeism can also be a sign of poor motivation, incompetence, or deeper personal problems such as mental health.
Absenteeism rates can be a canary in the coal mine for serious personal or workplace issues. For example, call centers have high absenteeism due to low motivation and feelings of underappreciation. If left unobserved or unchecked, this issue can blossom into high turnover rates, which are ultimately very expensive for a company (and time-consuming for HR staff).
Companies using HRIS can track exactly who is missing to build a fuller picture of employee performance and determine the factors driving absenteeism. The solution may call for more involved HR practices. For example, through its use of an individual reward system, the call center used its individual rewards initiative to reduce absenteeism alone by 75%. This initiative was successful only because company leadership understood that poor workplace motivation, rather than personal crises, was to blame for poor attendance.
Training and improvement
Employees come to the office with a myriad of skills and education levels. Some may arrive from completely different industries, and each bring their own qualifications to the table. Figuring out exactly how employees are using these skills is essential for a company. Not only does it help learning and development officers ensure that their training programs are up to snuff (96% of L&D managers want to measure the impact of training programs) but it also helps create a more motivated workforce.
This is especially true for millennial workers. Around 87% told one survey that professional development and career growth are essential for them. Their decision to stay with a company, and put in their best effort every day, depends on them using new skills to improve their performance. Of course, it is impossible to know whether employees are adequately trained if you don’t track the skills, tools, and resources they rely on to do their jobs every day.
Using an HRIS, companies can assess the past experience and education of individual workers and compare it to their current performance. With just a few clicks, HR managers can cross-reference these metrics to see whether an employee is struggling (or succeeding) because of their skillset. Through the use of employee notes, managers can also leave comments on an employee’s performance to address at a check-in or formal performance review.
Compensation is a vital piece of information for companies to consider when evaluating employee performance, especially in today’s highly competitive labor market. High turnover is a persistent problem for certain industries, especially in the service sector, and low wages and inflation rates are major reasons why.
Are your best-performing employees rewarded for their hard work? High performers might consider moving on to another opportunity if they feel their compensation falls below that of a less efficient worker. With 10.7 million unfilled jobs in the U.S. in June alone, there are plenty of positions available. Companies need to consider how much they are paying out in compensation based on productivity and performance—and whether the resulting equation is valuable.
An HRIS allows companies to track everything about their employees’ wages and salary, overtime pay, benefits, and proposed pay increases. Using these tools, management can easily cross-reference this information to determine whether a raise will help keep a valued employee.
Using employee performance metrics
Measuring both employee productivity and the factors that might impede it, from absenteeism to poor pay, can help companies retain their competitive edge and keep their workforces happy, sharp, and loyal. An HRIS is the perfect all-in-one solution for HR teams to track employee performance metrics. Speak to a Product Expert about employee performance metrics with SentricHR.