Performance Metrics Used by Business Managers
Management is an integral part of an organization. The productivity of employees and, in turn, the overall organizational success depends on the effectiveness of the managers’ ability to bring out the best in the employees.
And so, to better understand this pivotal role and ensure proper functioning, growth and communication, the following performance metrics can be used:
1. Engagement Score
Engagement score refers to the level of commitment and satisfaction an employee demonstrates towards his job.
Since a manager acts as a link between the organization as a whole and the employees, it is crucial for them to support employees and engage them at an individual level.
And this degree of engagement can be determined through pulse surveys, employee Net Promoter scores or even one-on-one interviews.
A low engagement score indicates that the management is failing to uphold the required dynamics of the department and, consequently, can lead to high absence rates or resignations.
2. Direct compensation variance
One of the prime responsibilities of a manager is to incentivize the employees while using the resources of the organization efficiently.
Managers often have the responsibility of controlling the raise in the basic pay of the employees. This is where direct compensation variance from plan comes in, which is a measure of how well this compensation is managed based on the cost of work and resources available.
This measure reminds the organization to make note of big pay-outs or increased volume of work in order to maintain an optimum level that is beneficial for the company.
3. Promotions actioned
A manager must be capable of spotting potential and enabling growth wherever necessary. So, the number of the employees receiving promotion in a certain group or a period of time is an important metric for understanding whether a manager is good at improving the workforce.
A high promotion rate indicates the manager’s effectiveness in developing a promotable workforce while a low promotion rate reflects the managers’ stingy attitude towards hogging talented staff at the expense of employee and organizational progress.
4. Resignation rate
Resignation or turnover rate is a broad metric for determining the skills of the managers. In specific, the turnover rate for high performers provide a true picture of manager’s ability to make quality decisions.
If the resignation rate for such performers is higher than the general pool of employees, this implies the inefficiency of the workgroup and, in turn, the manager.
A high resignation rate in the case of high performers also reduces the overall performance quality of the workgroup since the more productive population decreases. Hence, it is essential to monitor this metric and determine the cause behind any surge in the rate.
Absenteeism of the employees can be measured in terms of Absent Days Per Full-Time Equivalent, which provides a general score of the absence rates of employees in a group in comparison to another group.
This measure helps to identify patterns of behaviours that can indicate issues with employee engagement, work assignment, management inefficiency and so on.
Hence, absence rate must be measured on a regular basis to determine any consistencies or fluctuations so as to identify dissatisfied employees and help them become more involved.
In conclusion, relevant performance metrics can help an organization to understand which aspects of their management eeds improvement. This, this article should act as a guide to analyse the skills of managers in an organization and help them make well-informed decisions.