Identifying analytics that connects performance to your employee engagement initiatives can help get buy-in from leadership and inform your people strategy.
In this article:
- The Relationship Between Employee Engagement and Organizational Performance
- Create Effective & Meaningful KPIs
The Relationship Between Employee Engagement and Organizational Performance
HR leaders understand the importance of having engaged and happy employees for the success of their organization.
However, employee engagement is not always recognized as a top indicator of organizational performance, nor is it commonly seen as a key performance indicator (KPI) for the entire organization.
To demonstrate the value of employee engagement programs, HR leaders should establish connections between their engagement initiatives and outcomes that are universally valued by the organization.
By linking employee engagement metrics to those that the company cares about, these data connections will create engagement champions throughout the organization.
This will transform your employee listening program from an HR initiative into an organization-wide initiative. To achieve this, it's recommended to identify key performance indicators and share that data with Quantum Workplace during the Engagement Survey implementation process.
This will allow you to assess the impact of engagement on performance and establish a clear link between engagement data and key organizational success metrics.
Explore Business Questions via Employee Engagement and Performance Data
Connecting KPIs to your engagement survey's data can help provide insight for 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 onboarding 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?
Identify KPIs for Organization Success
When determining KPIs, your team might face an initial challenge in selecting the metrics that hold the most value for the organization. While some metrics like profitability and stock price are universal and obvious, others may be specific to certain industries or roles within the organization.
To pinpoint the most crucial metrics, HR leaders should begin by reviewing the current organizational strategic plan and initiatives. Often, the goals and metrics outlined in these plans align with what is essential for the organization's success.
Additionally, HR leaders can gather insights by engaging in discussions with other organizational leaders. Understanding the metrics they prioritize and the challenges they face can help in identifying key performance indicators relevant to the entire organization.
Create Effective & Meaningful KPIs
KPI metrics can be monitored either at the individual employee level or aggregated by teams, departments, or locations.
It's essential to consider different levels of analysis for performance data. Some data, like performance ratings given by a manager, is most useful when kept at an individual level.
On the other hand, metrics such as productivity or projects completed on-time and on-budget are better tracked at the team level.
For broader aspects like profitability, it might be more suitable to monitor at the department or location level.
Example KPIs
KPIs vary by factors like industry, job role, etc. The following KPIs categorized by function provide a starting point for internal discussion.
Human Resources:
- Performance Ratings
- New Hire Quality and Retention
- Absenteeism
- New Hire Ramp-Up Time
- Safety
- Overtime Hours
- Training Costs/ Hours
- Employee Productivity
- Cost per Hire
Sales:
- 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, e.g. calls, meetings, quotes
Customer Service:
- Customer Satisfaction or Engagement
- Net Promoter Score
- Problem Resolution Rate
- Average Customer Spend
- Calls & Tickets Handled per Day
- Patient Satisfaction
- Average Response Time
- Customer Retention Rate
Ensure Access to Vital KPI Data
Once you've identified the most important metrics for your organization, obtaining the relevant data can still present challenges, and sometimes, it may not even exist.
It's crucial to pinpoint KPIs that are not only vital to the organization but are also consistently tracked with reliable data.
Tracking performance data often involves collaborating with various experts such as data scientists, HRIS analysts, database administrators, and IT professionals within the organization. These team members are valuable resources for understanding the metrics currently being tracked and can assist in gaining access to the necessary data.
How to Structure and Organize KPI Data
Use a Unique Identifier to Connect KPI Data to a Demographic Survey File
A unique identifier is a record in the data that is associated with a single entity within the dataset.
Unique identifiers allow you to establish connections between your engagement survey data and KPI data. These unique identifiers can be assigned to employees or subsets of your organization, e.g. locations, departments, etc.
For employee unique identifiers, employee IDs and email addresses are recommended. Employee names are typically not recommended as people can change their names and multiple employees can share the same name.
Unique Identifiers for location or department include location name, location ID, department name, department ID, etc.
Categorical Data vs Continuous Data
For categorical data, i.e. performance ratings, NPS categories, promotion categories, etc. it's important to ensure categories are identified in a clear and consistent way.
If there are multiple categorical variables, e.g. 360 Feedback rating system, it's important to include each individual rating as well as a composite rating.
For continuous data, i.e. billable hours or revenue, consider building in categories to make data analysis easier to understand.
For example, if you have sales data in dollars, consider categorizing the data to include Hit Sales Goal, Exceeded Sales Goal, or Did Not Hit Sales Goal. This allows you to view engagement survey data from these different performance groups.
Consider the Level of Accessible Data
Consider whether the data represents the performance of individual employees or the level of teams, departments, and locations.
Performance metrics for individual employees can include performance ratings, attendance, learning hours, etc.
Performance metrics for department or location levels can include customer ratings, profitability, performance, etc.
You can also aggregate individual-level data to a location or department-level. To get aggregated data for a department/location, ensure each employee belonging to a department/location is tagged with the appropriate identifiers.