STAFFING RESOURCE CENTER

Why Measurement Matters.

Metrics help you prove the value of a team, process or project. They can also help improve performance among both leadership and team members by offering clear goals.

What Should You Track?

As work evolves, so do the parameters that define managers' effectiveness. Here are the performance metrics that matter most in 2020:

1. Productivity
   Productivity measures how well a company or individual uses its resources. It's the relationship between inputs and outputs. A productivity metric can help you spot ways to do more with less. To calculate, divide units of input by units of output.
2. Gross Profit Margin
   This bottom-line metric gives a quick, simple way to see how well your company or division is doing. Subtract total costs from total profit, then divide by 100 to see the percentage of each dollar earned that is profit.
3. Actual Cost
   Many managers can estimate costs accurately, but how much of that estimate actually gets spent? Add up the actual expenses over a project's timeline to evaluate estimates and understand actual cost.
4. Cost Variance
   How well did your managers estimate? To find out, subtract actual cost from the budgeted cost of work. Ideally, projects will land at zero or slightly in the positive, meaning they're under budget.
5. ROI
   How much did you get back for each dollar put into a project? Return on investment (ROI) looks at the benefit of a project divided by cost. Calculate it by dividing net benefits by costs, then multiplying the result by 100.
6. Earned Value
   How much has your spending on a project to date paid off? Also known as budgeted cost of work performed (BCWP), this metric helps you see whether an in-progress project is a good value. To find it, divide the percentage of work completed by the budget at completion.
7. Cost Performance
   How efficient is your team when it comes to controlling costs? To find out, divide earned value by actual costs. The result is your cost performance index - a useful tool for creating budget estimations.
8. Schedule Variance
   "Is the project on budget?" is a question that can be asked about time as well as money. Find the budgeted cost of work scheduled, then subtract the earned value. If the number is zero, the project is on schedule; if negative, the project is behind.
9. Customer Satisfaction Score
   How high quality is your product or service? Create a custom CSS measure by weighing variables like customer survey results, revenue generated, repeat and lost clients, and complaints or repairs to track improvement over time.
10. Employee Satisfaction Score
    Employee morale is directly correlated to project success, so tracking it is a must. Use factors like employee turnover, absenteeism, and direct employee feedback to understand your team's satisfaction.
11. High-Performer Resignation Rate
    Overall turnover rates don't tell you about the skills of the employees leaving. To see whether you're retaining top performers, choose a time period, count the number of top performers who resigned, and divide by the total number of top performers.
12. Promotion Rates
    Identify how many people you promoted in a certain timeframe, then divide that number by the average headcount on the team. If promotions are low or zero, the leader may be a talent hog - which can hurt morale and increase turnover.

DIY Metrics

To create your own metrics, first understand the purpose of a task. Then decide what success at the task looks like. Finally, choose an objective measurement of that success.

Measure It, Manage It

As the saying goes, "You can't manage what you don't measure." Adapt metrics to your management needs and reduce the risk that your team will be taken by surprise.