Managers and business owners take productivity as one of the most important aspects of business success. To achieve that, managers offer employees with various incentives in order to keep them motivated and to improve their overall productivity.
However, to keep employees self-driven and motivated, many businesses make use of measures that are quantifiable in nature. These measures include performance metrics as one of the most valuable tools to gauge employee’s performance criteria.
To assist you further, let us have a look at the need of performance metrics and how they shape business success efficiently.
The Need for Performance Metrics
You cannot expect an employee to improve unless you provide them constructive and timely feedback. Similarly, employees appreciate feedback as it helps them in improving their performance at work. Feedback should, however, always be based on statistics rather than personal judgments or estimations.
Providing feedback that is based on accurate statistics is possible by using performance metrics. It helps the employees to see the clear picture of their performance and also helps employers in performance reviews or appraisals.
Similarly, this data is further used to plan projects and to delegate tasks effectively. When employers know the standing of their team in terms of performance and capabilities, only then can they do strategic planning and set benchmarks.
In addition to the basic productivity metric that shows the productivity rate of each employee, there are several other metrics which can be used to know the strength of your business. These performance metrics include;
Total Cost of Labor
Total cost of labor is the performance metric that is basically the sum of all benefits, compensations, contractors and any other expenses that are related to maintenance of a team. These performance metrics help in providing an insight regarding your workforce expenses and are highly effective for an employer at the time of making major strategic decisions.
Time Spent on Tasks
As per Center for Creative Leadership, 96% of employees say that a lot of their time is wasted in checking irrelevant emails every day. While you think that emails are part of your business operations and should support in increasing productivity, it depends on how your employees are responding to these emails and how much time they are taking in carrying out the tasks.
This metric is not limited to emails, but also meetings and other BAUs. To know how much time is spent by each employee in carrying out their tasks, many organizations follow daily performance metric which shows the amount of time spent on each task and how productive these tasks were.
This is a very effective performance metric as it helps in figuring out the amount of gross profit of your company against every dollar spent on labor. This performance metric is not related to time and gives an insight of team effectiveness as a whole.
Performance metrics are not set in stone and are flexible in nature. These metrics should be designed, depending on the undertaken projects and available technology. This means that you can keep updating and revising the metrics in order to measure the outputs more accurately.