23 Employee Performance Metrics To Track
Organizations that prioritize their employees’ performance achieve a 30 percent higher revenue growth on average compared to their peers. Setting the right employee performance metrics is the first step to driving both employee success and business growth.
Tracking employee performance is essential for understanding how well employees are doing their jobs. HR teams need reliable ways to measure productivity, efficiency, and overall performance.
These insights help identify areas for improvement, highlight top performers, and guide decisions on training, promotions, and resource allocation. By analyzing performance metrics, organizations can support employee development and ensure their efforts align with business goals.
Let’s take a look at 23 employee performance metrics that you should track. For a broader perspective on HR metrics beyond performance, check out our 51 HR Metrics Cheat Sheet for deeper insights across various HR functions.
Contents
What are employee performance metrics?
Employee performance metrics examples
– Work quality metrics
– Work quantity metrics
– Work efficiency metrics
– Organizational performance metrics
How to implement employee performance metrics
What are employee performance metrics?
Employee performance metrics are quantifiable indicators used to evaluate and measure an employee’s effectiveness, efficiency, and contributions to organizational goals. These metrics provide a standardized way to assess individual or team performance, align efforts with strategic objectives, and identify areas for development or improvement.
To summarize, employee performance metrics are critical for:
- Identifying high performers and areas needing improvement
- Supporting data-driven decisions in promotions, training, or disciplinary actions
- Enhancing transparency and accountability within teams
- Aligning individual performance with organizational success.
Employee performance metrics examples
There are various types of performance metrics focused on work quality, quantity, efficiency, and organizational performance, each designed to measure different aspects of employee performance.
Let’s look at performance measures you can track at your organization.
Work quality metrics
Work quality metrics reflect the quality of an employee’s performance. The most commonly used metric is a subjective appraisal by their direct manager, but there are also other ways to assess work quality.
1. Management by objectives
A way to structure a manager’s subjective appraisal is to use management by objectives (MBO). MBO is a management model that aims to improve an organization’s performance by translating organizational goals into specific individual goals. These goals often take the form of objectives set by the employee and the manager.
The employee works towards these goals and reports back to the manager on their progress. These goals can even be given a certain weight (a number of points). On successful completion of these goals, points are awarded to the employee. In turn, managers can make goals more tangible and performance reviews more data-driven.
2. Subjective appraisal by manager
In most companies, employee performance evaluation happens twice a year in performance reviews. Employees are assessed on several criteria, the quality of their work being the most common.
Assessing the quality of an employee’s work offers key insights into their strengths and areas for growth. This becomes even more impactful when paired with a tool called 9 box grid. The 9-box grid is based on a 3×3 table matrix that helps evaluate employees based on their performance and potential. For example, employees with high performance but low potential are perfect for their current function.
Employees in the top right corner, those who score high on both performance and potential, are often designated to quickly advance through the organizational ranks as they can add more value higher up the ladder.
This 9 box grid is an easy way to assess the current and future value of employees and is a helpful tool for succession management (i.e., you want to promote your high potential).
3. Product defects
It is tricky to measure (production) quality objectively. An approach often used in more traditional manufacturing industries is to calculate the number of product defects per employee or per team. Defects, or incorrectly produced products, indicate low work quality and should be kept as minimal as possible.
Even though increased standardization of production processes has rendered this metric almost obsolete, the approach to measuring employee performance can be applied to other areas, like in the example provided below.
4. Number of errors
The number of input errors could act as an alternative to the previously mentioned product defects. This metric is also known as error rate. For example, software development teams could measure errors per thousand lines of code.
The same goes for the number of corrections in written work or the number of bugs in software code. Especially in computer programming, a single error can stop an entire program from working. This can have a major impact on the business, especially for companies that release new software versions weekly or monthly.
The conciseness of a piece of code is another important quality factor. If ten lines of code can produce the same computational result as 100 lines of code, the former is an indication of better quality.
5. Net promoter score
Net promoter score (NPS) can be an indicator of employee performance. NPS is a number (usually between 1 and 10) that represents the willingness of a client to recommend a company’s service to other potential clients. Clients who score a 9 or 10 are likely to be highly satisfied and will act as promoters for the company. This score is used regularly to assess sales employees, e.g., in car sales, where it is included in the final form customers need to sign.
The advantage of NPS is its simplicity. The disadvantage is that it is not uncommon for employees to instruct customers to give a certain rating (i.e., 9 or 10).
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6. Customer Satisfaction Score (CSAT)
Customer Satisfaction Score (CSAT) evaluates an employee’s performance by measuring the satisfaction of customers they interact with, typically derived from feedback on specific interactions, services, or support provided.
Customers rate their satisfaction with the service or support that an employee provides, often on a scale (e.g., 1 to 5 or 1 to 10). Scores from individual interactions are aggregated to assess the employee’s contribution to overall customer satisfaction. This metric provides tangible, customer-based data for evaluating and improving employee performance.
7. 360-degree feedback
360-degree feedback is another tool to measure employee performance. To assess an employee’s score, their peers, subordinates, customers, and managers are asked to provide feedback on specific topics. This feedback often represents an accurate and multi-perspective view of an employee’s performance, skill level, and points of improvement.
8. 180-degree feedback
180-degree feedback is a simpler version of the 360-degree feedback tool. In the 180-degree feedback system, the feedback typically comes from the direct manager and the employee’s self-assessment.
Unlike 360-degree feedback, which incorporates perspectives from multiple sources, this method hones in on how the employee views their work and how it aligns with their manager’s assessment, offering a more focused and straightforward evaluation process.
9. Forced ranking
Forced ranking, also called the vitality curve or stack ranking, is a way of ranking employees by asking managers to make a list of their best to their worst employees. This way, all the firm’s employees are compared with each other and evaluated on their performance.
The goal of this method is for a company to improve its workforce by firing the bottom 10% and replacing them with top applicants from its talent pool. Research shows that this can lead to a significant improvement in workforce potential in the right companies.
However, this “rank and yank” approach has been widely criticized, and most companies stopped using it, including General Electric, whose then-CEO Jack Welch popularized the practice.
Work quantity metrics
As quantity is often easier to measure than quality, there are multiple ways to measure this employee KPI. The metrics used to judge quantity will vary between industries. Some jobs are more difficult to quantify or don’t fit well with traditional output-based measures.
For instance, in healthcare, hospitals in many countries operate under government-imposed caps on the number of beds available. This means that doctors and nurses cannot be evaluated based on how many patients they admit, as they have no control over the cap. Instead, a more meaningful metric might be the average number of days patients spend in beds, as it reflects efficiency and care quality within the constraints of the system.
10. Number of sales
The number of sales is a straightforward way to pinpoint a sales employee’s output, particularly in roles involving “simple sales”. This holds especially true with ‘simple sales’. For instance, in a retail environment, sales associates may be evaluated by how many items they sell in a shift. In these cases, under similar conditions, the most skilled employees will consistently sell the most within a set timeframe. This is a clear example of an outcome metric.
However, for more complex sales, such as those involving longer sales cycles—like selling real estate or enterprise software—the number of sales alone becomes less reliable. In these cases, factors like the lower frequency of sales and the role of chance or timing can significantly affect outcomes, making it harder to measure performance purely by the volume of sales.
That’s why complex sales cycles, like software solution sales (which can have a sales cycle of up to 1.5 years), are best measured by other metrics. These are so-called process metrics, as they represent the actions one needs to do to increase the chance of a successful sale. For example, the person who calls the most customers has, in the end, the best shot at making a successful sale. In this case, the number of phone calls would be a more reliable metric of long-term sales success.
Examples of employee performance metrics focused on sales performance include:
11. Number of (potential) client contacts added to the customer relationship management (CRM) system
12. Number of outbound sales calls made
13. Number of on-site client meetings conducted
14. Number of active leads
Of course, different industries have different ways of expressing their quantitative output, tailoring metrics to reflect the specific actions and results that drive success in their field.
15. Number of units produced
In traditional manufacturing, the number of units produced was often a reliable quantitative metric. Similar metrics are still used in modern (service) organizations. For example, companies with employees in data entry roles sometimes monitor keystrokes per minute to ensure efficiency. Another way to measure quantitative production is to track the number of lines of code that programmers produce.
There are some obvious disadvantages to using a purely quantitative production metric. As in the previous example, such an output metric should be used only when one’s output is very simple and straightforward. For instance, warehouse operations employees could be evaluated based on the number of packages picked, packed, or shipped in an hour. For routine tasks like these, where the process is straightforward and efficiency is the primary focus, a purely quantitative metric like this can be an effective way to measure productivity.
16. Handling time, first-call resolution, and contact quality
Contact centers are one of the most employee performance metrics-driven places. Common metrics include average handling time, which is the average time the customer is on the phone, including when they are on hold, and first-call resolution, which is the number of callers whose problem is resolved the first time they called.
Others include contact quality, which is the rating a customer can give on the call, and service level, which measures how many calls are answered at what time (e.g., 90% of calls are answered in 25 seconds).
17. Task completion rate
Task completion rate measures the percentage of tasks successfully completed by an employee within a given timeframe relative to the total number of assigned tasks.
It reflects the employee’s ability to manage and finish assigned responsibilities. A high task completion rate indicates effective performance, while a low rate may signal challenges such as workload issues, time management difficulties, or skills gaps.
Work efficiency metrics
The difficulty of both qualitative and quantitative employee performance metrics is that they do not say much on their own. When a programmer writes 40 lines of code an hour, they produce a lot of code, but that says nothing about the code’s quality.
There should always be a balance between quantity and quality. That’s where the next metric on the list comes in.
18. Work efficiency
This metric evaluates how effectively resources—such as time, money, or effort—are utilized to achieve a certain level of output while maintaining quality.
It’s difficult to assess fairly the balance between the quantity and quality of work, which is why many organizations struggle with accurately evaluating employees during performance reviews. In fact, companies like Deloitte, GE, and Adobe scrapped performance reviews mainly because of this.
That said, having reliable performance data remains invaluable. It enables organizations to make informed decisions and better predict an employee’s future contributions, even if traditional review processes are evolving or being replaced.
Organization-level metrics
Organizations can also use employee performance metrics to assess their own competitiveness. These metrics are generally used to assess the efficiency of an entire workforce rather than individual employees.
19. Revenue per employee
Revenue per employee measures the average amount of revenue generated by each employee, calculated by dividing the total revenue of the organization by the number of employees.
Revenue per employee = Total revenue / Number of employees
A similar metric is revenue per FTE (full-time equivalent). While the revenue per employee metric uses the total headcount, regardless of whether employees are full-time, part-time, or temporary, revenue per FTE adjusts the workforce count to reflect the equivalent of full-time employment. It converts part-time and temporary employees into fractions of a full-time workload for more precise measurement.
These metrics can also be used to benchmark against other companies. Here’s recent data on revenue per employee of big tech companies:
Netflix
$2,492,969
Apple
$2,348,171
Meta (Facebook)
$1,630,541
Alphabet (Google)
$1,486,853
Uber
$1,032,012
Nvidia
$1,029,546
Microsoft
$939,321
In his book Exponential Organizations, Salim Ismail often refers to this metric. According to the author, linear organizations have a linear function of employees and profit, while exponential organizations have an exponential function of employees and profit. That’s one of the reasons why these organizations grow much faster.
20. Profit per FTE
Profit per FTE is a similar metric to revenue per employee but focuses on profit instead of revenue. A company’s profit is its total revenue minus expenses. A high profit per employee is a solid metric of an organization’s financial healthiness. It’s calculated as follows:
Profit per FTE = Total profit / FTE
21. Human capital ROI
The human capital ROI is a performance metric that assesses the value of human capital (i.e., knowledge, habits, and social and personal attributes). It is calculated by calculating the company’s revenue (minus operating expenses and compensation and benefit cost) and dividing this number by the total compensation and benefit cost that the company pays its employees.
This approach is popularized by Jac Fitz-enz in his book The ROI of Human Capital. However, his approach to measuring human capital is far from reliable and subject to major changes. At AIHR, we studied his book and tried to calculate the ROI metrics for a number of major companies in the Netherlands. The results were disappointing, as the metrics failed to take important factors into account, like layoffs, incidental cost, and other non-recurring events.
22. Absenteeism rate
Absenteeism and performance are two highly correlated constructs. Highly motivated and engaged employees generally take fewer sick days. According to Gallup’s research, the difference in absenteeism is as high as 81% between highly engaged business units and their less engaged counterparts.
Additionally, absent employees are less productive, and high absenteeism rates throughout an organization are a key indicator of lower organizational performance.
23. Overtime per employee
Overtime per employee tracks the average amount of extra hours worked by an employee beyond their regular schedule within a specific time period. It is calculated by dividing the total overtime hours worked by all employees by the total number of employees:
Overtime per FTE = Total hours of overtime / FTE
While companies may try to motivate employees with overtime pay, overall performance is likely to suffer if staff are overworked. This, in turn, is likely to contribute to lower morale and weaken retention.
How to implement employee performance metrics
Here are a couple of practical tips for HR professionals to effectively implement performance metrics for their employees:
- Align metrics with organizational goals: Ensure the performance metrics reflect the company’s strategic objectives. For example, if customer satisfaction is a priority, include metrics like CSAT scores or customer retention rates.
- Balance quantitative and qualitative metrics: Use a mix of numerical data (e.g., task completion rates, sales figures) and qualitative feedback (e.g., peer reviews, manager observations) to get a well-rounded view of performance.
- Customize metrics by role: Tailor metrics to fit specific job responsibilities. For example, for customer service roles, track resolution time and satisfaction scores, while for developers, focus on code quality and project delivery.
- Encourage collaboration in setting metrics: Involve employees and managers in designing performance metrics. This helps establish realistic, relevant metrics and fosters buy-in from the people being evaluated.
- Make metrics measurable and transparent: Use clear, objective criteria for metrics and communicate them to employees upfront. This ensures everyone understands what is being measured and how success is defined.
- Focus on development, not just accountability: Frame metrics as tools for growth rather than just evaluation. Use the insights to identify training opportunities, career development paths, and areas where employees can improve.
- Review and refine regularly: Periodically assess the relevance and effectiveness of the metrics. As business goals and roles evolve, adjust the metrics to ensure they remain aligned with current needs. Gather employee feedback to understand if the metrics feel fair and actionable.
Over to you
It’s impossible to capture an employee’s performance with just one metric. While this article provides a thorough overview, you won’t find a “one metric to rule them all” here—for a good reason: it doesn’t exist. The most effective employee key performance indicators blend qualitative and quantitative insights. Many companies approach this by using 180- or 360-degree feedback systems, where managers and colleagues evaluate an employee’s performance from multiple angles.
Organizations can take tracking employee performance a step further by integrating performance metrics with recruitment data. By comparing candidates’ profiles with their actual performance a year later, companies can identify patterns that help predict which hires are likely to become top performers. This data-driven method allows for smarter, more informed hiring decisions.
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