All Articles
It is no secret that your people are instrumental in the 
success of your business. To have a great company, you have to hire the right people and get them in the right seats, but as Jim Collins says, you must also work to retain and engage those people once you have them. The best companies use key performance indicators for employees to drive performance and ensure that they get the most out of their most important investment - their employees. Having the correct set of employee performance metrics can improve your performance management in creating a high-performing team, measuring employee productivity, creating organizational alignment, and exceeding your business goals.
Key Performance Indicators for Employees
Employee engagement is critical to increasing productivity and lowering operational costs; higher engagement is also linked to higher customer ratings, less employee turnover, and fewer safety incidents. Gallup estimates that "disengagement costs the U.S. $450 billion to $550 billion annually." In Rob Markey's Harvard Business Review article "The Four Secrets to Employee Engagement," he cites a frightening finding from Bain & Company that "engagement levels are lowest among sales and service employees, who have the most interactions with customers." You can see the problem when the people who have the most influence over whether you will get and keep customers essentially don't care one way or the other. Having a great set of employee KPIs can increase employee performance, net profit margin, and other financial metrics and give them a sense of purpose in the company's culture by using smart KPIs for employee performance management.
There's a lot of great information about how to increase employee engagement and ensure that you're doing everything you can to get the right people in your company and have them doing the right things for the right reasons. But how do you know if what you're trying is working? Many companies make the mistake of implementing engagement, leadership development programs, or hiring and miss the critical step of measuring the results they want to achieve. With KPIs to measure where you started and your progress toward your goals, you will know if your efforts to create an engaged workforce, decrease turnaround, increase employee satisfaction, or whatever particular problem or opportunity you are working to solve are successful.
In a recent weekly Keep Smart meeting of our village of business consultants and coaches, our CEO Patrick Thean shared some examples of KPIs in the "People" (or employee) category in our Rhythm KPI Scorecard. If you are trying to improve employee engagement, what is the right handful of Employee KPI examples for employees that we should measure to know if we're on track? How will employee performance be achieved if they aren't aware of what they are being measured? This is one of the reasons that the Balanced Job Scorecard is the best way for the long-term role and goal clarity to drive engaging performance reviews.
A word of caution before you read on: rather than copying this list of job KPI examples, this isn't meant to be an employee KPI template. Consider these as a starting point to determine what works best for you and your team for organizational success. The best job KPI examples for you will be specific to your business and the particular challenge or opportunity you are facing and shouldn't be limited to the human resource department; these should not be thought of as only an HR KPI but a key to increased organizational performance.
To get to the KPIs that will help you, you should start by considering the result you want to achieve regarding your employees and then dig deeper by asking a lot of questions to find a leading indicator KPI that you can push to drive that result. This process will yield far more effective results for your company than simply picking a KPI from a list; that being said, this list might spark a thought that can lead you to the right individual employee metrics to help you measure what you most want to move in your business. KPI examples for employees are an essential part of your KPI evaluation and employee training.
KPI Examples for Employees:
- Voluntary Attrition or Employee Turnover Rate
- # of Key Hires
- Keep Smart (Learning and Employee Retention)
- Gallup Employee Engagement Survey
- Employee Net Promoter Score (NPS)
- Percentage of "A Players" - Total
- Percentage of "A Players" - Managers
- Customer Retention
- Total Number of Customer Interactions
- Customer Service Quality
- Customer Satisfaction
- Number of Employees
- Employee Experience (average tenure)
- Performance Management (varies from role to role)
- Strategic KPIs for Organizational Goals or Business Objectives
- Completed reviews and performance appraisals with managers and human resources
- Number of Employee Training Hours
- Percentage of Employees Meeting Personal Development Goals
- Employee Absenteeism Rate
- Number of Employee Safety Incidents
- Average Time to Fill Open Positions
- Employee Work-Life Balance Score
- Internal Job Application Rate
- Employee Peer Recognition Rates
- Average Response Time to Employee Queries or Concerns
- The ratio of Internal Promotions to External Hires
- Number of Employees Certified in Key Areas
KPI Examples for Employee Performance
- Employee Productivity: Measure the output or results achieved by employees within a specific time period.
- Customer Satisfaction Index: Measure the level of satisfaction among customers based on surveys or feedback.
- Employee Efficiency: Measure the efficiency of employees by tracking the time taken to complete tasks or projects.
- Employee Engagement: Measure the level of engagement and involvement of employees in their work and the organization.
- Employee Performance Ratings: Conduct regular performance evaluations and rate employees based on their performance.
- Employee Goal Achievement: Measure the percentage of employees achieving their goals or targets.
- Employee Skills Development: Measure the number of training programs attended or certifications employees obtain.
- Employee Collaboration: Measure the level of collaboration and teamwork among employees within a team or department.
- Employee Innovation: Measure the number of innovative ideas or solutions employees contribute.
- Employee Customer Service Feedback: Collect customer feedback about the quality of service employees provide.
KPI Examples for Your Team Video
Employee Performance Metrics
Patrick shared a story about working with one of his clients to improve employee engagement. As followers of the Topgrading methodology, they aimed to have as many A Players as possible on their team. They started by measuring their employees as A, B, or C players based on performance and Core Values. Then, they tracked "% of A Players" on their KPI dashboard. Several other customers have tracked the number of engaged employees.
They couldn't get this percentage higher than 50%, so they changed their strategy slightly and identified a leading indicator to help them push for the desired result. Their new goal was to have 100% of managers as A Players. The idea was that Player managers would hire other A Players and coach their direct reports who were B Players to improve performance or make tough decisions to fire people who were C Players. This new strategy worked! Once they shifted focus to ensuring that all their managers were A Players, their total percentage of A Players increased to 70%. Setting goals and relentlessly executing them daily is the key to achieving them. The KPI examples for managers got the team focused on doing the right things.
Employee Engagement Statistics
After trending up in recent years, employee engagement in the U.S. saw its first annual decline in a decade -- dropping from 36% engaged employees in 2020 to 34% in 2021. This pattern continued into 2022, as 32% of full- and part-time employees working for organizations are now engaged, while 18% are actively disengaged.
Source: gallup.com
Hopefully, these examples and the case study illustrating how one of our client companies was able to leverage leading indicators to push the Employee results they were hoping to achieve will help your team think through the right handful of KPIs to monitor to know if your employee health is on track or if you need to make some changes to build your company and grow with purpose. Visit our comprehensive list of balanced scorecard KPIs, which is full of team KPI examples, to get your employee performance metrics dashboard started. Have great skip-level meetings to engage all levels of your employees with hand-selected skip-level meeting questions.
Rhythm Systems helps mid-market companies accelerate growth through their suite of strategy & execution software products to achieve your strategic goals. Remember that every manager in your company is responsible for getting the most out of their teams; it is not just a job for HR departments.