5 must-have short-term KPIs to measure your performance management

To stay on track to reach your long term performance management KPIs such as improving employee engagement, turnover and productivity, it's a great idea set yourself some smaller milestones that you can continuously measure and work towards to ensure you're heading in the right direction.

The difficult part about change management is that it’s not something that happens overnight. Especially when it comes to revamping a decades old process, organizations only get as much as they put into that first year of promoting, measuring and adjusting.

Measuring the impact of a new performance management system isn’t as straightforward as measuring the impact of a new accounting system or customer service tool, but it isn’t impossible to assess either. Remember time is money, so even if saving time on performance reviews or increased time spent on coaching is your objective, there are ways to attach a dollar value to that.

The first step is to identify the underlying reasons for low employee engagement, productivity and turnover. If you haven’t already, here are 15 questions to ask in your next engagement survey to learn where you could make the most impact. Based on your results, below are examples of five different KPIs you can measure to determine success.

1. Reviews participation rate

Completing performance reviews can be a drag. They often take lots of time to complete and there’s never a time when absolutely everyone is in the office. One of the major advantages of switching to a people enablement platform is that, unlike Google Docs or traditional paper and pen processes, it allows more flexibility and a completely user-focused experience. For example:

With this enhanced user experience, we encourage our clients to set a goal of reaching 80% completion rate during their first review. The more people participating in the process, the closer your organization will get to feeling the full benefits of an enhanced performance management experience.

2. HR process efficiency

Another benefit of moving from a manual paper and pen process, or even Google docs based performance review process, is that it cuts down the time it takes for HR to administer, process and return the results. Meanwhile, it also reduces the time it takes for managers and employees to complete them. This can mean cutting the process down from 2 months to as little as 2 weeks. If your long-term goal is to increase productivity, saving time on performance reviews can have a major impact

Shortening the HR process

Feedback is most effective when it’s delivered in a timely manner. If too much time passes between the moment it’s given and then received it can greatly reduce the potential impact it can have.

To calculate this, simply subtract the time in days it took to complete performance reviews using your old process by the time it takes with your new tool.

(Old system: Date of completion - start date) - (New system: Date of completion - start date) = # days saved in performance review turnaround

Reducing completion time

In an internal study, Adobe found their managers were spending 17 hours per employee on performance reviews. To calculate your potential savings, start by sending out a survey to see how long managers in your organization are currently spending on performance reviews. Subtract this figure by the amount of time managers spend using the new tool. Then multiply this by the average salary of managers to get your target.

(Avg. time spent on old process) - (avg. time spent on new process) = hours saved | (hours saved) x (Avg. salary of managers per hour) = $ saved

3. Quantity of feedback exchanges

Simply increasing the amount of feedback managers give their team can help to clarify expectations, give timely advice and celebrate achievements in the moment. In fact, 43% of highly engaged employees receive feedback at least once a week. However, in a study by OfficeVibe 65%, of employees actively stated they wanted more feedback than they’re currently getting.

Not only does more manager led feedback increase engagement, managers also play a key influencing role in the creation of new team habits. The more managers share feedback with their team, the more likely employees will be to share feedback with each other.

Set a feedback goal with your management team. If continuous feedback is completely new to your company start by setting a goal of sharing at least one piece of feedback with each team member every month. Next, increase that to every 2 weeks. With Impraise managers can:

With our HR analytics dashboards, admins can see how much feedback is being exchanged within teams and pinpoint which ones might need more feedback training and support.

4. Feedback quality

Introducing a performance management tool is a great facilitator to improve the feedback experience, but simply receiving more feedback isn’t enough. It’s essential to also help people learn how to give feedback more effectively. According to a survey by Trinet and Wakefield, 59% of employees have complained that their manager was unprepared to give feedback.

To measure the effectiveness of your feedback training, after your next review send out a survey simply asking, “Was the feedback you received helpful?” using a rating scale of 1-5, for example.

Set a goal for how much you want this answer to improve every quarter. Do you want to see a 10% increase in positive responses? The more time you spend training your company on how to give and receive feedback effectively the faster you’ll see this number increase. If you’re already sending out a quarterly engagement survey, consider including this question so as not to overload employees with too many different surveys.

5. eNPS score

If your long-term goal is to increase employee engagement, it’s time to start measuring and setting eNPS goals each quarter. Similar to NPS, eNPS stands for Employee Net Promoter Score. It’s a quick and painless way to gauge happiness within your organization continuously. Simply send out a one question survey asking your people, “On a scale of 0-10 how likely are you to recommend our company to a friend as a good place to work?” Include a space for those who scored under 9 to elaborate on why they gave this score.

eNPS = (% of Promoters) – (% of Detractors)

Score of 0-6: Detractors

Detractors are the group who are most likely to be disengaged and may even be actively seeking a new job. The more you can decrease your number of detractors by creating targeted strategies to address their concerns the better.

Score of 7-8: Passives

Because they're neutral, Passives aren't included in your eNPS score but they can have a huge impact. This group is important to watch because they can be more easily swayed by finding out and addressing the issues preventing them from being net promoters.

Score of 9-10: Promoters

Promoters are your company’s ambassadors, willing to promote your brand even outside of office hours.

Your score can range from -100 to +100, but a healthy eNPS score is between +10 and +50. Depending on where you are, consider adjusting your eNPS goal each quarter to ensure you reach your long-term engagement goal at the end of the year.

Remember, only send out an engagement survey if you’re willing to make improvements. Sending out a survey and failing to act on it will only worsen the situation.

Next steps

We know it's sometimes hard to imagine what this might look like in reality, so here's a story on how Bynder shaped their talent management strategy to reach their key HR goals after their implementation of Impraise.

For more resources on how to set up your performance management processes for the future, download our 2019 Guide to Modern Performance Management, below.

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