Identifying analytics that connect performance to your employee engagement initiatives can help get buy-in from leadership and inform your people strategy.
Why should we examine the relationship between employee engagement and organizational performance?
HR leaders know that engaged and happy employees are better for their organization. However, employee engagement is not always considered a top indicator of organizational performance or even thought of as a key performance indicator (KPI) for the entire organization.
To demonstrate the value of organizational employee engagement programs, HR leaders should connect their employee engagement initiatives to outcomes and metrics that are universally valued by the organization.
If you are able to speak to metrics that the company cares about and their relationship with employee engagement, these data connections will build engagement champions throughout the organization and will turn your employee listening program from an HR initiative into an organization-wide initiative. We recommend identifying key performance indicators and sharing that data with us as part of your Engagement Survey implementation process so that you can examine the impact that engagement has on performance and so that you can tie engagement data back to key organizational success metrics.
What type of business questions can we answer by examining employee engagement and key performance data?
Connecting KPIs to your Engagement Survey data can help you answer the following questions:
- Who are our high performers and how can we best retain them?
- How are we improving the retention of new employees year over year?
- What is the difference in engagement between my highest and lowest performers?
- Which interventions and investments are most effective at improving engagement?
- How can we improve our onboarding program and decrease the ramp up time for new hires?
- What are the differences in engagement between our highest and lowest-performing locations?
- How effective are our new learning and development programs?
How do we know what metrics matter most to the organization?
One of the initial difficulties your team will face in determining KPIs is honing in on the metrics that provide the most value to the organization. Some of these metrics might be more universal and obvious such as profitability or stock price. Other key metrics might be industry-specific or only applicable to certain roles or departments within the organization.
To identify which metrics matter most, HR leaders should first review the current organizational strategic plan and initiatives. Strategic plans and organizational goals often represent the goals and metrics that are most critical to organizational success.
HR leaders can also identify KPIs by speaking to other organization leaders. What are the most important metrics they track? What are their biggest challenges?
What do KPIs look like?
KPI metrics can be tracked at both the individual employee level or at an aggregated level by team, department, or location. It's often helpful to think about performance data at different levels of analysis. Some performance data is best kept at an individual level, such as performance ratings given by a manager. However, other data points such as productivity or projects completed on-time or on-budged might be best tracked at the team level. Profitability might be best tracked at a department or location level.
What are some example KPIs?
While KPIs vary both by industry and by job role, the following KPIs, broken out by function, can provide a starting point for internal discussions.
New Hire Quality and Retention
New Hire Ramp-up time
Training Costs/ Hours
Cost per Hire
Overall Sales/ New Business
Average Sale Size
Number of Renewals
Number of Referrals
Quotas or Percent to Sales Goal
Customer Retention Rate
Percentage of cross-sold accounts
Sales Activities (Calls, meetings, quotes)
Customer Satisfaction or Engagement
Net Promoter Score
Problem Resolution Rate
Average Customer Spend
Calls/ Tickets handled per day
Average Response Time
Customer Retention Rate
How do we gain access to key performance data?
Once you have identified the metrics that matter most to your organization, it can still be a challenge to gain access to the appropriate data-- or even to confirm whether that data exists! Therefore, it's important to identify KPIs that are not only critical to the organization, but that are consistently tracked with quality data.
Tracking down performance data often requires collaborating with data scientists, HRIS analysts, database administrators, and IT professionals within the organization. These team members are often the best sources of information about the metrics that are currently being tracked or are possible to track and can help you get access to this data.
How should we structure and organize KPI data?
1. Use a unique identifier to tie KPI data to demographic survey file.
A unique identifier is a record in the data that is associated with the single entity within the data set. Unique identifiers enable you to connect your Engagement Survey data to your KPI data. You can have unique identifiers both for employees and for subsets of your organization, such as location or department.
For employee unique identifiers, we recommend using Employee ID and email address. We do not recommend using employee name as a unique identifier because people change their names and multiple employees can have the same name. Unique identifiers for location and department include location name, location ID, department name, or department ID.
2. Consider whether your data is categorical or continuous.
For categorical data (e.g. performance ratings, NPS categories, or promotion categories), it is important to ensure that categories are identified in a clear, consistent way. If there are multiple categorical variables, such as from a 360-degree feedback rating system or a rating system with multiple categories or ratings, it is important to include each individual rating as well as a composite rating.
For continuous data (e.g. billable hours or revenue), you may want to build in categories that make sense so that it's easier to analyze your data. For example, if you have sales data in dollars, you might categorize these data into "Hit Sales Goal", "Exceeded Sales Goal", or "Did Not Hit Sales Goal". This will allow you to view Engagement Survey data by these difference performance groups.
3. Consider what level of data you have.
Consider whether your data represents the performance of individual employees or the level of teams, departments, and locations.
Performance metrics for individual employees may include performance ratings, attendance, and learning hours. Performance metrics for department or location levels may include customer ratings, profitability, or performance. You can also aggregate some individual-level data to a location or department-level. To get aggregated data for a department or location, you'll need to make sure each employee belonging to a location or department is tagged with the correct identifier.