To determine the KPI’s of effective team management, you would have to find a way to measure people’s performance. But how do you achieve that? Sure, there are some straightforward ways, like:
- Counting how many tasks a certain team member finishes within a week
- Measuring the average completion time needed for a medium-sized project
But are those real indicators of effective team management? Well, yes and no.
Although they will provide you with hard numbers (number of completed tasks, exchanged emails, and given feedbacks), true KPIs of effective team management are based on something less measurable. According to Bernard Marr, the author of Key performance indicators (KPI): 75 measures every manager needs to know, to determine these KPIs you should measure:
- Team satisfaction
- Team engagement
- How others perceive each other's efforts
- How employees identify with the company
If those numbers are satisfactory, you are well on your way to achieve an efficient team management.
"There is a strong link between happy employees and happy customers, and another one between happy customers and profit." - Bernard Marr
Be SMART About Your Objectives and KPIs
First thing to do is evaluate the relevance of a KPI you want to use to measure a progress toward a certain objective. This objecive should be SMART: specific, measurable, attainable, relevant, and time-bound.
Your objectives are SMART if you can answer "yes" to the following questions:
- Is the objective specific enough?
- Can I measure the progress to the objective?
- Am I being realistic while setting goals?
- Is the objective relevant to our organization?
- Is there a well defined time frame for the goal accomplishment?
If your objectives are SMART, it is time to define the KPI by answering a different set of questions.
- What is your desired outcome? eg. We want to improve our team efficiency by 20%.
- Why does this outcome matter? eg. It will enable us to take on an additional project each year.
- How are you going to measure progress? eg. We will measure progress by determining how much time is required for each project.
- How can you influence the outcome? eg. We can optimize processes our team uses and provide them with better equipment.
- Who is responsible for the business outcome? eg. Team leader will take on the responsibility.
- How will you know you’ve achieved your outcome? eg. Four major projects will be completed between January and October.
- How often will you review progress towards the outcome? eg. We will review our progress monthly.
Once you determined the KPIs, evaluate them and constantly keep reevaluating them throughout the process. For example, it may turn out that your team managed to handle not four but five major projects during a ten month period. Reevaluation of the KPI will help you determine whether you’ve set the bar too low, or some other factor influenced their success.
However, while measuring team efficiency is one thing, measuring “employee engagement” is a whole different ball game. Although KPIs like “employee engagement” or “employee satisfaction” sound very appealing, they can't be easily boiled down to a single numerical value. So, managers had to invent a way to measure KPIs like those.
Measuring KPIs of Team Effectiveness
Even though the people are the driving force behind every company, most companies don't know how to meaningfully measure performance. Most of the time, businesses will use oversimplified metrics (like the days of training or absenteeism) to determine if their employees are performing well, while disregarding the most important KPIs in people-run company: people happiness, engagement and productivity.
According to Marr, you have to measure several things to determine a team’s performance:
Employee satisfaction index
Employee satisfaction index (ESI) answers the question: “To what extent are employees happy on their job?”
So, if you want to find out how your team feels about their managers, or development opportunities, the best way is to use a survey: it should be anonymous, short and Likert scale based. Even though many companies conduct this survey once a year, it’s advisable to interview 10% of the workforce every month.
This means you will have two more months to make corrections and address issues your employees pointed out. Also, make sure you actually find the solution to the problems at hand - doing nothing will lower the morale and cause even more dissatisfaction.
Employee engagement level
Employee engagement level (EEL) answers the question: “To what extent are employees ready to devote themselves to the mission and the vision of the company?”
Similarly to ESI, EEL is measured with a survey. Even though some companies make their own questionnaires, Gallup’s survey is most commonly used. It consists of 12 YES/NO questions and provides you with an insight in the percentage of the employees that are engaged, actively engaged,disengaged or actively disengaged.
If you, on the other hand, choose to make your own survey, keep several things in mind: it should be short and concise, conducted by external provider (if possible), and should result in change in behaviour - keeping the status quo will only result in further disengagement.
360 degree feedback
360 degree feedback answers the question: “How well do your employees perform in the eyes of the colleagues, supervisors and clients?”
Instead of questioning immediate superiors only, question everyone but anonymously. That means including the supervisor, coworkers, clients and even the employee who’s being evaluated. By providing large number of inputs you will get an objective performance review which can form a base for a pay rise or provide an insight into employee further career development needs.
There is no secret formula for creating a perfect 360 degree feedback. A good survey should focus only on observable behavior and question one behavioural pattern at the time.
Bottom line is: The key of 360 degree review is confidentiality as reviewer is more likely to be objective once they realise there will be no personal confrontation because of their feedback.
Employee advocacy score
Employee advocacy score (EAS) answers the question: “Would our employees want to be our public representatives?”
Measuring it is very simple and comes down to answering one question: “Would you recommend this company as an employer to a friend?” Answers should vary from 0 (not at all) to 10 (most definitely) and will divide all respondents into three categories:
Advocates (9-10): Loyal, enthusiastic employees who will gladly promote the company;
Passives (7-8): Satisfied but unenthusiastic - hardly the promoters for the company, and more likely to leave the business;
Detractors (0-6): Unhappy employees who can potentially damage your brand by badmouthing it.
Once you get raw results, you can get staff advocacy score by using the formula:
Employee advocacy score = % of advocates - % of detractors
There is really no need for us to point out that negative employee advocacy score is a red flag that indicates the need for a complete system overhaul.
Companies with excellent reputation usually have EAS over 30. According to the latest rankings of Fortune 500 companies, Microsoft is topping the chart with the score of 76, while Apple is in 12th place with EAS score of 58. Interestingly, Disney - which is regarded as the company which nurtures family values - is placed at a near bottom, with EAS score of 7.
To increase efficiency of this method, try conducting a survey at least several times a year. Also, include a few additional questions to determine the pain points of your employees. Once you do that, address them - you would be amazed at how solving just one problem can turn a hardcore detractor into a passionate advocate.
Determining the KPIs of effective team management will not only allow you to figure out how close you are to achieving desired objectives, but it will also help you clearly define the steps you need to take to increase your employees’ satisfaction and engagement.
Even though your team may not be producing desired results at the moment, investing in them will give you a strong foundation for future successes.
Just keep in mind that humans are ever-changing and ever-evolving, and you may need to make some adaptations. Be patient and persistent, and your team will repay your trust tenfold.