Employee Key Performance Indicators | 4 mins read

Which Key Performance Indicators Matter for Employee Evaluations?

which key performance indicators matter for employee evaluations
Dakota Sheetz

By Dakota Sheetz

Find out which key performance indicators for employee evaluations are necessary. Learn how to use KPIs to improve employee performance and satisfaction.

What Are Key Performance Indicators?

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Employers use KPIs to track and measure their employees' performance. Instead of subjective judgment calls, these metrics provide clear information regarding the performance of each employee. KPIs can be tracked daily or weekly and then presented during performance reviews.

KPIs allow employers to dig in and evaluate employees. They can compare the data against companywide or industry benchmarks to see how well their employees are doing. The data also allows them to analyze patterns over time to see if employees are improving or remaining stagnant.

By using the KPIs, employees and employees can set goals to improve and then measure that improvement over time. This can include action plans and additional training to help employees get on track.

To put it simply, KPIs are necessary to get real information about employees. Without KPIs, you'll be forced to make judgment calls. However, with KPIs, you can see the full picture.

Example of a KPI for an Employee Review

Employers know that overtime costs can cut into their profits. Also, while employers understand that overtime is occasionally necessary, it's a bad sign if the same employee or employees constantly work over.

Because of that, employers often use overtime as a KPI when evaluating employees. First, the employer looks at the total hours of overtime divided by the number of employees.

Which then provides them with a baseline. Then, he or she will take into consideration each employee's overtime hours and how far off they are from the established base.

When employees are over the baseline, the employer and employee will need to address the problem as quickly as possible. Once the problem has been addressed, the employer will continue to track that employee's overtime KPI to see if the employee makes consistent and positive changes to their performance.

The Best KPIs to Look at in Your Employee Evaluation

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Restaurant and retail business owners and management teams should evaluate different KPIs to ensure that employees perform as expected. These KPIs can be divided into different categories. Let's look at each category.

Customer Service
Customer service is crucial in both the retail and restaurant industries. Poor customer service can lead to lost business and revenue, while stellar customer service will boost the business. Employees can track customer service an assortment of ways, including evaluating-

  • Customer Retention
  • Average Response Time
  • Customer Satisfaction Score

By using key performance indicators, employers have tangible metrics that show how each employee performs with the public.

Communication
Communication is a critical component to the success of businesses in all industries. Communication with the public falls into the customer service category. However, internal communication is in a category of its own.

Solid internal communication skills keep employees engaged and motivated to succeed. That, in turn, can improve everything from efficiency to loyalty within the workplace.

Fortunately, there are KPIs that can be used to properly measure communication skills. These can include social media and app engagement, employee feedback, and intranet or app logins. These are just some examples of the ways you can make sure your employees are actively communicating with each other in an effective manner.

Teamwork
The retail and restaurant industries are rooted in teamwork. Effective teamwork helps employees and businesses thrive. There are various KPIs that measure teamwork, starting with attendance and punctuality.

After all, a team cannot thrive if one of the members is home or late. KPIs for helpfulness and efficiency are also used when determining the teamwork score. You might even analyze overtime because it indicates that the team isn't able to complete tasks within normal working hours. That could be a sign of poor teamwork.

Overall Satisfaction
Employers often spend so much time thinking about how happy they are with their employees that they forget to see if their employees are happy with them.

The restaurant and retail industries both have high turnover rates. Employers can reduce the rate by using KPIs to determine employee satisfaction. Metrics such as employee capacity and engagement are indicators of satisfaction.

Measuring satisfaction allows employers to know if employees are getting burned out. This needs to be addressed during the performance review. The employer and employee can brainstorm for ideas to engage the employee. Setting new goals and taking on new responsibilities might break the employee out of the rut.

Stay on Track of Your Employees with KPIs

KPIs are the easiest way to evaluate an employee's performance. KPIs-

  • Provide tangible data.
  • Show if employees are performing at, above, or below benchmarks.
  • Makes it easy to see patterns.

Employees can include different KPIs in performance reviews. While they have lots of options, they should include KPIs related to-

  • Customer Service
  • Internal Communications
  • Teamwork
  • Satisfaction

By analyzing these KPIs, business owners or company leaders will have a good idea of how employees are performing. Then, they can help them make changes if necessary.