How to Effectively Measure Performance for Your Team

Rulers, measuring cups, mile markers: You can picture the instruments for measuring inches, flour, and stretches of road. But when it comes to evaluating performance within your organization, measurement methods might seem less concrete. In reality, the question of how to measure performance has many answers, all of which can identify opportunities for improvement.

There’s no single best approach to measuring team performance – in fact, there are many. That means you can choose whichever long-trusted method proves best for your employee goals and talent management – or, better yet, create your own! In this article, you’ll learn how to measure performance among your team so you can seamlessly reach your goals.

• How to measure performance
• Key employee performance metrics

How to measure performance

Whether during a performance review meeting or a one-on-one meeting with a team member, you have all kinds of options for how to measure performance. Below is a summary of the most prominent types of reviews and tools designed for thorough and accurate assessments.

• Graphic rating scales
• 360 feedback
• Self-evaluation
• MBO (Management by Objectives)
• Checklists

1 Graphic rating scales

A graphic rating scale is an appraisal tool designed to help you assess your employees’ strengths and weaknesses. There are two types of graphic rating scales: discrete and continuous. 

• A discrete scale uses specific responses for evaluations. For example, the options on a discrete scale assessing how often an employee arrives on time to work might read: “never,” “sometimes,” “usually,” and “always.”
• A continuous scale lists two numbers on each side of the scale, with other numbers evenly spaced between the two. You’ll often see it as 1 to 10, with all whole numbers two through nine present as well. To evaluate an employee, a manager chooses the number on that scale that measures a range of behavior, such as timeliness (never on time being 1, and always on time being 10) or ability to meet deadlines (always missing deadlines a 1, while never missing a deadline being 10). At the end of the review, the manager can tally all respondents’ grades and average them to come up with an overall score.

Graphic rating scales can provide a quick and straightforward approach to assessing your team’s performance. The grading technique for these scales can give employees a clear picture of how you view their performance and their potential room for improvement. 

However, the ratings these scales produce can vary largely depending on who conducts the review. The numerical grade you give an employee on a continuous scale might be two points away from the grade another manager gives them. On a scale with only 10 points, a two-grade difference can be significant. 

Additionally, when analyzing average grades, you might not get an entirely accurate view of your employees’ performance. Let’s say one employee consistently receives average grades while another employee receives both high and low grades. Though their performances are entirely different, these employees will have similar overall scores.

• Graphic rating scales use numerical scales or concrete descriptors to measure employee performance.
• Discrete graphic rating scales assign certain phrases to employee performance, whereas continuous rating scales are numerical.
• Graphic rating scales are easy to understand and use, but they can result in unfairly balanced evaluations.

2 360 feedback

The 360-degree feedback review aims to give you a team-wide perspective on your direct reports. Sure, you’re the lead contact for your team, but you’re not the only person who interacts with them. Your employees engage with plenty of other people – coworkers, customers, even other teams’ managers. With 360 feedback, everyone – yes, even customers – can contribute to an employee’s review. That’s a lot more meaningful than centering solely your own perspective!

With this performance measurement method, multiple people anonymously submit feedback about a team member. You’ll provide reviewers with a list of questions about the employee’s behavior and performance. (That survey you can answer whenever you end a call with a customer service rep is a great example you’ve seen outside of work!) You can give the reviewers a grading scale to answer the questions or ask them for written responses.

The 360 feedback method can give you a good idea of an employee’s behavior and performance. The employee can also look at their reviews to understand how others perceive them and how they can improve. Because this method uses anonymous feedback, reviewers can provide feedback they might not feel comfortable giving during a peer feedback session.

The drawback to 360 feedback is that it’s based on outward expressions of an employee’s performance. It can overlook aspects such as personal objectives and highly specific skills. For example, your colleagues might be clueless about how well you set goals for yourself. However, 360 feedback can also be biased. Workplace friends might share overly positive reviews of each other, and colleagues with animosity might give each other overly harsh feedback.

• 360-degree feedback incorporates perspectives from your whole team rather than just management.
• 360 feedback is typically anonymous, so it can present employees with helpful feedback they might not receive otherwise.
• Though powerful, 360 feedback can be subject to bias, and some reviewers might not have adequate insight to meaningfully comment on certain performance areas. 

3 Self-evaluation

Employees involved in self-evaluations receive others’ feedback and contribute their own. The result is employees who more actively engage with their performance appraisals. After all, self-evaluation requires employees to be introspective and reflect on their accomplishments, goals, and workplace conduct. The employee then gets to include their thoughts in their review, giving them a more intimate understanding of their performance.

This approach also benefits you as a manager. Think about it: Day after day, you work hard to understand your direct reports’ strengths, weaknesses, and processes. Asking an employee to complete a self-evaluation can help you answer questions about all these factors that you simply couldn’t answer yourself. A thorough self-evaluation can really help you understand your employee’s preferred work methods and why they go these routes.

To conduct an effective evaluation, invite your employee to share honest answers to several performance questions. You can provide a list of your company’s core values and ask your employee to briefly explain whether their performance aligns with each value. The employee can also share any obstacles or concerns they feel might be prohibiting their growth. You can then ask your employee to share objectives they’ve been working toward or set future goals.

Of course, there’s an obvious limitation to self-evaluation as a performance evaluation method. Nobody, not even the most perceptive person, can fully understand how others perceive their workplace conduct, workflows, things of that nature. So while self-evaluation is valuable, it might be best paired with another performance measurement method.

• Self-evaluation incorporates the employee’s own thoughts into the feedback process rather than including solely their colleagues’ input.
• When employees contribute to their own reviews, managers learn things about their processes they simply couldn’t determine on their own.
• Though valuable, self-evaluation includes no external feedback, so you should pair it with other measurements for maximum impact.

4 MBO (Management by Objectives)

MBO is a management model that you’ll apply over several months, perhaps as long as a year. MBO allows you to break your company’s larger key objectives into smaller goals toward which employees can work. This process allows you to assess each employee’s individual performance while encouraging them to achieve growth that aligns with your company’s direction.

With this approach, you and your employees will create a list of objectives that directly relate to your company’s values. Your employees will then work to accomplish those objectives within a designated timeframe. To start this process, you and your employees will clearly define several objectives – let’s say five to 10 to keep it reasonable. You’ll also need to decide on a time at which you’ll reconvene to discuss and evaluate your employee’s progress.

Throughout the designated timeframe, you should regularly touch base with each team member about how they’re progressing. You might need to adjust their goals based on any challenges they’re facing. These check-ins are also a good opportunity to offer feedback so the employee knows how well they’re meeting your expectations. Once the review period has ended, you and your team member will evaluate their progress and achievements. 

While this method can be beneficial, MBO may focus too heavily on setting goals without creating a clear plan to accomplish these goals. If you choose to use MBO, try not to direct all focus to the overall objective – spend some time creating a plan. Consider setting OKRs alongside this strategy for a clear roadmap that your employees – and you – can follow.

• MBO is a long-term evaluation strategy that evaluates your employees against certain goals and objectives.
• The long-term nature of MBO gives you plenty of time to check in with your employees and adjust their approach to maximize their performance.
• Managers using MBO often fall into the trap of setting goals without outlining paths toward them. You can set OKRs when you use MBO to avoid this pitfall.

5 Checklists

Checklists can be one of the easiest ways to evaluate your employees’ performance and track their progress as they complete their work. Using checklists can be as simple as creating a spreadsheet with a list of ideal team member traits and accomplishments.

For example, one of the lines on the list could read, “Arrives to work on time.” Next to that line, you’ll check “Yes” or “No” depending on an employee’s punctuality. Another line might say, “Works well with colleagues.” You can then set a discrete grading scale within your checklist to analyze this trait.

There are endless aspects on which you can grade your direct reports in a checklist – perhaps too many. Really, you could argue that checklists are too rudimentary, but their simplicity is part of their charm. To make the most of them, list the values that most align with your company. This way, you can communicate the areas in which your team members are performing well or need improvement.

• Checklists comprising ideal employee values and their performance may be the simplest evaluation method.
• Checklist items can have simple yes-or-not outcomes or graded scales.
• Checklists are so flexible you could wind up adding in extra, less meaningful values or taking an approach too rudimentary to be effective.

Key employee performance metrics

Just as you can evaluate your team’s performance in all kinds of ways, there are also several types of numbers you can use. You can loosely classify these all as performance metrics. These figures and data points help track your team’s and organization’s success in specific areas.

It’s important to tell your team members which metrics you’ll use to monitor their performance. This way, they can best position their efforts to contribute to larger organizational goals. Below, you’ll find some key types of performance metrics that can be easy to obtain – and, of course, implement into performance reviews.

• Work quality metrics
• Work quantity metrics
• Work efficiency metrics
• Organizational performance metrics

1 Work quality metrics

As a manager, you’re largely focused on producing high-quality products and services. Work quality metrics can help you prioritize this goal in your employees’ work habits. They help you measure how well an employee performs and set each individual team member’s expectations. This way, team members can know if they’re meeting your organization’s standards.

Whereas qualitative performance management can be subjective, work metrics are more concrete. They take several aspects of an employee’s work and numerically compare them to your organization’s larger goals. A prominent example is net promoter score, which puts numbers to customer interactions with your team. You can also create your own metrics – that’s part of the fun of employee performance measurement!

Any good work quality metric directly relates to an employee’s line of work. This way, you can create a more accurate assessment for that team member than if you used the same general metrics for all your employees. Say, for example, you want to review a sales team member’s performance. You might choose to formulate a ratio between the number of positive and negative customer reviews they receive per month. You could also examine how many calls ultimately resulted in sales. 

The MBO approach can be a great way to set work quality objectives and metrics for your team. You can also calculate how many errors an employee’s products contain or the number of return customers a sales rep brings to your company. To start implementing these metrics into your assessments, communicate your expectations during 360 feedback reviews or one-on-one meetings.

• Work quality metrics measure each team member’s performance as it pertains to your company’s values.
• A good work quality metric is specific to an employee rather than applicable to your whole team.
• MBO can help you determine work metrics, and 360 feedback reviews can help you keep employees aligned with your metrics.

2 Work quantity metrics

Work quantity metrics directly assess employee productivity, and that’s important. Research from IZA World of Labor has found that measuring employee productivity can give an organization valuable insight into its teams’ performance. At the same time, these metrics can provide leaders with valuable data for planning effective organization strategies.

A great work quantity metric example would be assessing a sales rep based on the average number of calls they make per week. If this number falls below expectations, you can help your employee spend less time on the phone while making just as many sales.

Other examples include the number of posts a social media manager creates each week and how many projects an employee completed in the last quarter. With just about every employee, there are work aspects you can quantify to evaluate performance and productivity.

• Work quantity metrics directly reflect employee productivity rates.
• Virtually all employee work involves aspects that you can track numerically.
• Examples of work quantity metrics include monthly sales, projects completed per quarter, and plenty more.

3 Work efficiency metrics

On their own, quantity and quality might not form a complete picture of a team member’s contributions. Work efficiency metrics complete the picture. Think about it like this: A sales member can generate $5,000 in sales calls, and that’s great. Or maybe it’s not great. Whether those calls occurred over a two-hour or one-week span makes all the difference. 

Efficiency metrics primarily concern the amount of time an employee spends creating a product or service or how much money results from it. Efficiency measurements help you understand how your teams prioritize tasks, how they go about completing them, and at what rates. In the above example, putting a timeframe to the $5,000 figure determines whether the employee deserves a promotion or more training.

An employee’s efficiency is measured by their total output divided by their total input. In the above example, the employee’s output was the $5,000 they generated in sales. If their input was two hours, you know your employee can produce $5,000 / 2 hours = $2,500 in sales per hour.

To measure an employee’s efficiency, you first need to determine an output to examine. Outputs can include profits generated, sales emails sent, or number of tasks completed. From there, you can set a timeframe in which you’ll monitor that employee’s work. Once that period has passed, you can calculate your employee’s efficiency rate. To help you set realistic expectations and maintain a standard of comparison, try calculating the average efficiency of similar employees.

• Work efficiency metrics complete the partial picture that work quality and quantity metrics paint.
• Work efficiency is the ratio of an employee’s total output to total input.
• To determine fair work efficiency standards to which to hold your team, you should determine their colleagues’ efficiency as well.

4 Organizational performance metrics

Organizational performance metrics combine all your teams’ work into metrics that describe your entire company. They directly correlate your employees’ performance with your organization’s performance as a whole.

Examples of organizational performance metrics include revenue per employee, overtime per employee, and company-wide absenteeism rates. Each of these metrics looks at statistics that apply to individual employees and converts them into data that speak for your entire company. 

Key performance indicators (KPIs) include several types of metrics that can help you track organization-wide performance. Revenue, employee satisfaction, and innovation are all examples of KPIs. Once you’ve selected the metrics that best fit your company, you can perform analyses to get a practical perspective on your organization.

You can then compare your results to other similarly-sized organizations within your industry to determine potential improvement areas. Analyzing these metrics can benefit your organization – and, just as importantly, the individuals contributing to its success.

• Organizational performance metrics summarize individual employee performance metrics to describe your whole company.
• Organizational performance metrics typically pertain to larger concerns such as revenue, overtime, and absenteeism.
• Widely used KPIs are typically organization performance metrics, and you can compare your KPIs to those of similar companies to evaluate your output. 

Measuring success

You’ve probably heard the saying, “Quality over quantity,” but plot twist – adequately assessing your team’s performance involves both. Incorporating specific metrics into several types of employee assessments can help you include quality, quantity, and more in all your performance reviews. Whether your performance reviews involve 360 feedback or one-on-ones, Fellow can help you gather and share data that takes your team’s performance to the next level.