Key Types of Performance Metrics To Track

There are key performance metrics that all workplaces should track. Measuring them effectively is the first step in improving your company culture, enhancing the employee experience, and ensuring business success.

Data is king. But knowing the right kind of data to collect, how to collect it, and what to do with it is far more important than the data itself.

That’s because while you may have all the stats and figures about how many sales you’ve made or how many employees you’ve hired, numbers themselves don’t tell the why. Great workplaces know that the key is not in just collecting the metrics, but in analyzing those metrics to make strategic decisions.

So, what should you track that will help you make those decisions? Well, start with key business metrics like productivity and efficiency, and key employee metrics like employee retention and engagement. 

From there, you can use these to start shaping a bigger picture of the overall employee experience and your overall business success.

What are performance metrics?

Performance metrics measure a workplace’s efficiency and effectiveness. They are specific, measurable data points that help you understand how well things are really working.

Think of them as the vital signs of your organization — just like a doctor checks your heart rate and blood pressure, businesses need to take the pulse of their workforce and overall performance.

These pulse checks give you a clear view of what’s happening in your workplace, including strengths, weaknesses, and opportunities for improvement.

For example, a marketing team might track metrics like lead generation and conversion rates. These numbers tell a story beyond just "we did some marketing." They show exactly how effective the team's efforts are and where they might need to adjust their strategy.

But performance metrics aren’t about creating a high-pressure environment. They’re about creating a more transparent workplace culture, where everyone understands how success is measured and rewarded.

Great workplaces measure both business performance and employee performance and consider how those metrics come together — or where they’re misaligned.

Business performance metrics

Every business has a north star for where it’s trying to go. Business performance metrics tell you if you’re on route to get there.

Sales figures, productivity rates, and customer satisfaction scores are all examples of business performance metrics. Tracking these types of metrics helps to guide decision-making, optimize operations, and maintain your company’s long-term success.

Here’s how two major business metrics can help in achieving your strategic goals. 

Organizational productivity

A business that isn’t productive isn’t going to last very long. That’s why you need to compare how much value your team is creating against the time and resources it took to get there.

Not to say you want to turn employees into machines. Rather, you can use productivity metrics to understand how your team works most effectively, and in turn, create an environment where people can do their best work.

Some ways you could measure productivity include:

• Revenue per employee/team: How much money does each team member (or team as a whole) generate for the company? For example, if your company brings in $5 million annually with 50 employees, that's $100,000 in revenue per employee.
• Output per hour: How much work gets done in a set time period? In a manufacturing setting, that could be units produced per hour.
• Task completion rates: How quickly and effectively do teams complete assigned work while still maintaining quality?
• Error rate: How many mistakes are cropping up in your company’s workflow? As important as it is to measure the successes, you also want to note the failures.

Metrics like these can help to identify bottlenecks, as well achievements to be recognized, both of which can then improve your leadership effectiveness, since employees will feel more supported and equipped to do their best work.

Operational efficiency

Operational efficiency is the ratio of resources to results — your ROI (return on investment). 

Let’s say your company invests in new software to speed up production, but the new system is clunky and there’s no training or support available to employees. As they struggle to learn, your productivity rate goes down. Employees are frustrated and your business becomes less efficient, not more.

In this case, hiring training experts may have been more of a cost upfront, but it would reduce frustrations later on, possibly leading to a far better ROI.

There are lots of ways your workplace could optimize efficiency, depending on your industry, such as:

•   Automating repetitive tasks that don’t require much human input
•   Ensuring transparent communication between departments, to avoid redundancies or confusion
•   Implementing cross-training programs so employees can understand others’ roles and step in as needed
•   Auditing workflows and processes to eliminate unnecessary steps

Employee performance metrics

While business performance metrics measure the health of the overall company, employee performance metrics measure the health of your company culture. They include both individual and team contributions to your organization’s success.

While these metrics are essential for employee performance reviews and professional development, they also serve a greater purpose for the company as a whole. They can help you gauge overall employee sentiment and point out areas where your leaders can improve.

Two major metrics to look at are employee retention and employee experience.

Employee retention

Retention metrics give you a clear picture of how well your company is holding onto its talent.

The most straightforward way to measure employee retention is by tracking turnover rates — essentially, how many employees are walking out the door each year. Another key metric is average employee tenure, which tells you how long employees are sticking around.

But numbers only tell part of the story. You also want to understand the why. Do employees feel stuck in their role? Unsupported by management? Underappreciated?

Initiatives like clear pathways for promotions, professional development opportunities, and celebrating employee wins can all show employees they’re valued. And when people feel seen and appreciated, they're more likely to remain committed to an organization.

Employee experience and engagement

Employee engagement is an oft-talked-about metric, but the Great Place To Work Model goes further and looks at the entire employee experience.

The employee experience considers more than just how engaged an employee is in their daily work. It is the cumulative assessment of an employee’s interaction with your workplace, from the day they’re hired to the day they leave.

And while it may seem like a warm-and-fuzzy type of measurement, it’s actually an important link to your business success. Companies that have a high-trust workplace, where employees have a positive experience, show stock performances nearly 4x better than the market.

Implementing regular engagement surveys, pulse surveys, and performance feedback plans are all ways you can measure the employee experience. And, in turn, managers can use those insights to make data-driven decisions about their teams and resources.

How to track and improve performance metrics

Data collection can be overwhelming, which is why clarity is key. Whether it’s employee performance or business performance, consider:

•   Which metrics you want to track
•   What goals or targets you’d like to hit
•   What tools you’ll use to measure
•   How often you’ll measure
•   Who will be responsible for the data
•   How you’ll act upon the results
•   How this aligns with your company’s values and purpose

Having this information set out in advance will not only make your data collection easier, but it’ll also encourage buy-in from both leadership and employees. When people have clarity on why, how, and when, they’re more likely to see the value — and believe that it’s not just for optics.

Use employee surveys to measure performance

Employee engagement surveys are one of the best ways to tap into how your employees feel about your company culture, the work they do every day, and their leaders. Getting that insight directly from employees’ mouths can help you spot problems before they become crises and identify opportunities for growth.

But while engagement is important, it’s not the full picture. Great Place To Work offers an employee survey platform that measures more than engagement — it captures the full employee experience, from burnout to camaraderie to whether employees feel their contributions are recognized.  

For example, maybe your survey results show that while remote employees are very engaged with the work they’re doing, they feel disconnected from the team. You might respond by introducing virtual team-building activities or rethinking communication methods.

By conducting surveys regularly, you can track progress over time and learn whether efforts are actually making a difference.

Align leadership effectiveness with performance metrics

While surveys measure employee engagement and performance, it is really leadership driving those results.

That’s because leadership shapes the day-to-day experience of employees. In great workplaces, this starts with the CEO setting the vision for the culture. They and their executive team then model the behaviors they expect to see from others — such as listening, seeking feedback, and thanking people for a job well done.

This all directly feeds into both your employee and business performance. Because when employees have positive workplace experiences, they’re more willing to be flexible and agile, bring new ideas to the table, recruit others into the company, be proud of the work that they do, and want to stay for a long time.

Why tracking performance metrics matters

There are two main types of metrics your organization should be examining: business performance (including productivity and efficiency) and employee performance (including retention, engagement, and experience).

Keeping your finger on the pulse of your organization ensures you have a positive employee experience, which in turn leads to improved business results.

But data tracking can be overwhelming, so investing in outside help, such as Great Place To Work’s employee survey tool is helpful. Based on data-backed research, it can help you measure performance so that you know what to act upon to improve your workplace culture - and, in turn, your business metrics.

Claire Hastwell