Working in a team can create synergy, since a good team will likely produce better results than individuals working separately. However, measuring team performance is even more challenging than measuring the performance of each employee separately, since you have to take into consideration each and every member’s performance, in relation to the others’, as well as the overall team’s.
In general, employees are members of departments. A department is a subdivision of an organization and an individual, generally, can only be part of one department. That being said, nowadays, teams are more flexible in how they are formed and how they operate: a team can be a temporary group formed to work on a specific task or project. Therefore, employees can be members of only one department, but several teams.
The first step is to link the team results to the organization’s goals, by cascading the objectives and KPIs from the organizational level to the team level. It is not very productive to have a well-performing team whose work does not help the organization reach higher performance goals.
There are many indicators and measurements that can be useful when considering measuring your team’s results. In what follows, we’ve put together a list of the most widely employed benchmarks, so that you may get a general feel for what is considered useful to keep track of.
Employee attendance: Employee attendance is an important aspect of team performance since absenteeism incurs excess costs and will have an unwanted effect on team productivity & employee morale.
Moreover, late employees can be the source of annoyance or frustration, which will reduce team cohesion and further reduce a working unit’s effectiveness. Therefore, attendance related KPIs should be the first ones to track, when we talk about team performance:
% Absenteeism: Indicates the percentage of employees within the team who are repeatedly and/or unexpectedly absent, out of the total team members.
$ Lost time accounting: Measures the potential revenue lost because of idle workers or wasted hours within the team.
# Time lost by starting work late: Measures the volume of time lost due to employees starting their working hours late.
Client satisfaction: Every team has an internal/external customer, which is why satisfaction can be a good measurement unit. Improving customer satisfaction will eventually result in a more efficient production process, better service and ultimately, lead to more satisfied external customers. The most important KPI to measure in this regard is the following:
% Customer satisfaction: Measures the level of satisfaction exhibited by the team’s customers (current employees, distributors, vendors, departments, or external clients), towards the inter-functional services provided, be it communication, productivity and/or responsiveness.
Employee retention within the team: A low retention level or a high turnover level is usually connected with low levels of efficiency and productivity, which in the end can lead to a negative impact on an organization’s overall results.
This aspect can be influenced not just by the team performance, but also by the HR department’s performance, the working environment and work policies, the supervisor, as well as the promotion and professional development opportunities for the future. However, high level of employee turnover within a specific team could indicate team-related problems.
The most important employee retention KPIs to measure are the following:
% Employee turnover: Measures the rate at which employees leave the team in a given time period (e.g., month, quarter, year).
% Employee retention rate: Measures the total number of employees retained at the end of the reporting period, expressed as a percentage from the total number of employees that were in the team at the start.
Employee satisfaction: Studies suggest a direct correlation between employee satisfaction, employee engagement and increased performance. Employee engagement can be increased through various company efforts, such as facilitating the development of skills for its employees, giving them a sense of trust and integrity, and clarifying their opportunities for future career development. The most important indicators to take into consideration, when looking to improve or maintain employee satisfaction, are the following:
% Employee satisfaction: Measures the employees’ satisfaction and motivation level, with aspects regarding their job and working environment: job responsibilities, team and management, workplace, and professional development.
# Employee Engagement Index: Measures the engagement level of employees in their work activities and responsibilities, in terms of enthusiasm, commitment and discretionary effort.
Productivity of individuals: Productivity of individuals is a key element of team performance. The following KPIs help measure a team’s contribution to the organizational goals, and the contribution of its members to the general team results:
$ Profit per employee: Measures the team’s contribution to the overall profit pool. It is a particularly important ratio in customer-focused businesses, such as those in the service sector.
$ Sales per employee: Measures a team member’s productivity and efficiency in generating sales.
% Human Capital Return on Investment (ROI): Measures the return on investing in a team’s human capital, after adjusting for the cost of financial capital.
$ Human capital value added: Measures the value added through productive activities, by a team’s members. Reflects the adjusted operating profitability figure, calculated by subtracting all expenses except for labor expenses, from revenue, and dividing the adjusted profit figure by the total headcount.
In some specific cases, where the productivity of a team is not directly linked to the organizational revenue or profit (ex. support teams), it is more advisable to use OKRs (Objectives and Key Results), instead of KPIs (Key performance indicators), to measure productivity.
OKRs contain a well-defined objective and one or more key results. OKRs help define how to achieve a goal through concrete, measurable actions. So, in case of the support teams, these results should be measured to track team performance, as they will be able to paint a more accurate picture of their efforts.
Conclusion
It is a complex process to measure team performance; therefore, it should be analyzed from numerous angles, according to each team’s specialization and workload. It should be noted that the aforementioned indicators are not the only ones which can portray a group’s results. However, if you are looking for a quick introduction into this topic, these KPIs will serve as a sustainable foundation on which you can build your employee management system.
Culture is an intriguing component of the organizational system, wouldn’t you say? Although most professionals agree on the importance of building a strong organizational culture, measuring the extent to which this goal has been achieved is quite challenging, and the tools for doing so have been few and far between. Fortunately, one such tool enables us to get the pulse of the organizational culture—the Global Performance Audit Unit’s performance culture audit.
Another way to get an idea of the state of an organization’s culture is to use metrics. For example, Sears uses what it calls Total Performance Indicators (TPIs) to monitor employee attitudes and retention. Similar to key performance indicators (KPIs), TPIs also relate to the more quantitative aspects of measurement. Using metrics to monitor performance or inform decision-making is always useful, but can we actually capture organizational culture in one metric or index?
Culture is a phenomenon that happens naturally in any group without necessarily being guided. Thus, it will always be a reflection of the people’s attitudes within that group. Culture appeals more to emotion than reason. Elusive and intangible, culture is something that can be easily felt but difficult to explain or justify.
Organizational culture embeds the beliefs and values that define a company, which serve to guide employees in their daily actions. Culture is a reflection of the company’s spirit, and to a large extent, I believe that an organization’s worth is equal to the value of its people.
Performance is a concept usually associated with processes that are more technical than cultural, such as financial performance or machinery performance. So why would anyone want to have a performance-oriented culture? For many people, this may seem like a very cold and profit-oriented working environment. In practice, there are several reasons to embed performance within your organizational culture:
Impact on Internal Stakeholders
Increases accountability regarding the quality of their work
Raises awareness on the importance of being efficient and results-oriented
Nurtures constant learning and professional improvement
Brings clarity on their roles and contributions to the organizational strategy
Increases engagement by rewarding performance
Impact on External Stakeholders
Positions the organization as a trustworthy and reliable partner
Influences the quality of products and services positively
Enhances customer experience
Improves employer brand and market image
A change management initiative to shift organizational culture to a performance-driven perspective can become quite an advantage for companies wishing to get ahead of their competition. To have more clarity around what a performance-oriented culture looks like, consider the following key attributes:
Shared Vision
Strong leadership is essential for any organization. Strong leaders can communicate their vision and inspire employees to follow them. This shared vision brings and keeps people together, empowering them to work as a team.
Communication
Intense and effective communication increases employees’ awareness and understanding of the company strategy. This impacts how they work and can help them make better decisions in full alignment with strategic directions.
Transparency regarding decisions and performance levels establishes greater levels of credibility and confidence in relation to leadership and generates employee interest towards understanding the impact of their actions on bottom-line results.
Continuous Learning
A performance-oriented culture acts as an enabler for implementing a performance management system (PMS) within the company. Monitoring performance facilitates the development of a constant learning process for the entire organization.
A performance-oriented culture not only sets targets but also provides employees with the necessary training or mentoring to achieve these targets.
Process Improvement
A common characteristic of performance-oriented organizations is their concern for constant optimization. By not being satisfied with “good” and always striving for “great”, the people in the organization adopt a state of mind in which they are constantly striving for efficiency.
Data Analytics
In the age of big data, we need to make sure that both the younger and older generations are accustomed to working and making use of data in their decisions. Modern organizations must have the competencies and habits of data analysis.
Technology
Progress in today’s business environment is limited without the support of modern technology. A performance-driven organization will invest in technology to support business processes.
Innovation
Technological growth will be conditioned by the organization’s ability to adapt to market dynamics and innovate to stay ahead of the competition. Innovation comes from employees, but what can make a difference between two companies that have the same talent pool is how each one manages to nurture innovation among its employees.
Rewards
A performance-oriented culture reflects a working environment where effort and success are acknowledged and rewarded. Rewards don’t have to be exclusively financial.
Engagement
A performance culture should nurture employee engagement through its employee-centered initiatives.
Authenticity
Organizations should be able to identify their uniqueness and acknowledge and promote it among stakeholders. This is what makes a company feel real and meaningful for its employees, customers, and business partners. For example, Zappos prides itself on its authenticity, which is reflected in one of its corporate values—weirdness.
The myriad of benefits that stem from a performance-oriented culture should be reason enough for any organization to adopt it. However, it’s worth noting that culture can be inherently divisive, especially when change is in the air. Leaders must take care when shifting from a culture that many of their employees have grown accustomed to in order to mitigate friction and foster buy-in.
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Editor’s Note: This article was originally published on March 12, 2016. It has been updated as of April 16, 2025.
Key performance indicator (KPI) reporting is an important stage in the performance management process. However, managers can sometimes fall into the trap of considering it as the end of the performance cycle. Merely reporting performance data will not deliver improved results—this is only possible when decisions are made based on data-driven insights.
Some common issues in KPI reporting are information overload (which makes it hard to focus on what is important), the unavailability of timely information (which hampers decision-making), and inaccurate data (which can lead to misinformed directives). By following these 10 pieces of advice, you can solve these aforementioned problems, ensure better KPI reporting, and consequently improve your decision-making process.
Ensure data timeliness by clarifying the responsibilities of data custodians and the data-gathering process. Sending reminders also helps in receiving data on time.
Verify data accuracy by requiring raw data and analyzing it before compiling the report. Frequent data audits ensure higher accuracy.
Make sure performance results are accompanied by comments. Data custodians should also provide the context in which either high or low levels of performance occurred.
Display data in tables and graphs by maintaining a simple and appealing visual design of the report.
Send the performance report to all stakeholders at least three days before the performance review meeting to ensure data is reviewed before the discussions.
Inform all participants about the performance review meeting agenda and make sure to stay on topic to ensure important issues are solved in due time. Should you be interested in conducting efficient and effective performance review meetings, make sure to include topics such as:
Presentation of results
Discussions on the KPIs that are far from reaching targets
Analysis of the possible causes of underperformance
Review of the portfolio of initiatives
Decisions upon the next steps
Prioritize discussing the KPIs in red to identify the root cause of the problems.
Avoid finding responsible persons for poor performance. Instead, focus on finding solutions and assigning accountability to ensure the agreed-upon initiatives will be implemented.
Keep it short by assigning a meeting coordinator to keep discussions on the right track. A performance review meeting should not last more than two hours.
Send a follow-up email with the meeting minutes and all initiatives established, along with their responsible persons and deadlines.
Improving the KPI reporting process leads to a better, more informed, and more efficient decision-making process. To track your progress, use our GPA Unit’s free tool, which offers maturity level assessments via its performance management audit!
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Editor’s Note: This article was originally published on January 7, 2015. It has been updated as of April 11, 2025.
