How do you measure and track employee performance using key performance indicators (KPIs)?

The big issue that is essential is determining which KPI's actually impact a company's success and how often to monitor them. It might be tempting to track KPI's for hundreds of different criteria every day or every week, but managing and conveying the data into tangible tasks becomes a huge distraction.

To measure and track employee performance using key performance indicators (KPIs), start by defining clear and specific KPIs aligned with organizational goals. Use quantitative metrics like sales targets met, project deadlines achieved, customer satisfaction ratings, or error rates. Track these KPIs regularly through performance reviews, feedback sessions, and performance dashboards. Analyze trends over time, compare against benchmarks or industry standards, and adjust KPIs as needed to ensure relevance and effectiveness. Remember, KPIs should be SMART (Specific, Measurable, Achievable, Relevant, Time-bound) and tied to individual roles for accurate performance assessment.

Using an OKR framework can simplify this. Hopefully the organisation won't have more than 3 objectives for the year. Taking these objectives and making child objectives for the department will help make them relevant to the team, changing the wording so their work can support the objectives. Each Individual then creates their own objectives as a child of the team goals. Then their KPI as set themselves as part of the key results for the activities they perform each month." The big win with this is everyone sees how their work helps to contribute to the overall objectives of the organisation. It helps create simple focus on the goals.

Meetings to discuss the Dashboards are crucial to get everyone on the same page and help explain action items assigned to staff members. Also goals set without input from the people "in the trenches" can be off putting and demotivating. Nothing worse than unrealistic Ivory Tower Goals set by ignorant, unilateral managers. If people feel part of the process, their "buy in" to the goals and performance measure is extremely higher.

A lot of time companies report KPI that are irrelevant to the employee. Instead the employee should track and report the relevant KPI for their role. KPIs at a company level should be reported by the leadership team as they are responsible for the overall performance.

In my experience, without graphical KPI performance monitoring that compares specific past data to current data and goals then displays the deviation as well as trends, the data becomes a fog. Special focus must be given to convey performance data in a separate, graphical, clear, and understandable format, so that action items can be assigned to correct issues ASAP. This is why dashboards are essential to KPI monitoring and control.

Monthly cadence is important for this, senior leadership and team leaders should share organisation & team KPIs. Individuals should share with their manager and team if relevant their KPIs. People don't want to read long reports, visuals really help.

Sometimes priorities will change or it may become difficult to get reliable information. Don't be afraid to challenge the relevance of reporting, these days there is an overload of information, this can result in analysis paralysis. Keep things simple and accurate.

My take on it is to have a nimble Dashboard that can display DIFFERENT relevant data for SPECIFIC departments, by the week, by the month, by the quarter, by the year. Then be prepared to modify and improve the KPI tracking in accordance to team feedback. The implementation and modification is not as hard as one would think. Most CRM, Accounting, and ERP systems easily output reports directly into Excel, and Pivot Table Charts are fairly easy to build into highly effective Dashboards.

A few things to consider: Shared objectives: At the highest level, your executive should have shared objectives linked to company priorities. For example, if customer experience is a priority for your company, then your executives should all share your company's customer experience measure as a common objective, regardless of whether they have a customer facing team. This is one step in ensuring leaders of non-customer facing functions put the customer at the center of everything they do and don't, for example, deliver half-baked products that the frontline can't support. Regardless of the individual's level in the organization, objectives should focused on outcomes rather than activities (ex: number of meetings attended).