How to Measure Improvement in Performance Effectively in 5 Easy Steps

Stagnant, plateaued, static—words you never want to be associated with your team's performance. Yet, sometimes, even the best people need a nudge to improve their performance.

But how do you measure something so intangible like performance improvements? And we don't mean collecting some numbers for the sake of numbers. We mean getting actionable insights: What's working? What's not? Where's the room for growth?

You've got the data, now what? Feedback. And not just any feedback, but the constructive, forward-moving, performance-boosting kind. The kind that lights a fire, not extinguishes it.

In this article, we'll guide you on:

• How to measure the improvement in performance of an individual or team, step-by-step.
• The best practices to quantify and track performance improvement effectively.
• Why you should pay extra attention to your performance measurement process.

🪜 5 Steps to Measure Improvement in Performance Effectively

👀 Step 1: Define the baseline for performance measurement

Start by analyzing where the employee's performance level is currently at.

It provides a baseline or reference point to measure improvement in performance. A baseline helps you know if performance is improving, constant, or declining.

Use these methods to get your baseline:

• An initial evaluation: Measure the employee's performance. Assess their current work and contributions against the organizational expectations for their role.
• Past performance reviews: Analyze historical records of (360°) feedback and performance rating scales.
• Skill assessment and tests: Evaluate the employees' current knowledge and skills in various aspects of their job.

At this stage, have the employees reflect on their own current level of performance as well.

Create a self-assessment where they can identify improvement areas.

What's the role of self-assessment in measuring performance improvement?

The goal for every organization is to achieve the highest level of improvement. And a self-evaluation can help you achieve this in two ways.

First, it provides a richer view of their performance and areas needing improvement. This is because employees often judge their performance more harshly than their supervisors.

Second, when employees assess their abilities, they will likely take ownership of their performance improvement.

👀 Check out 10+ self-evaluation form examples and templates you can use immediately. For further customization, check out these self-evaluation questions. 

🔢 Step 2: Define key performance metrics to track progress

Defining your key performance indicators provides measurable goals for employees. It establishes:

• The specific areas of improvement you expect from them.
• The desired levels of improvement.

Setting clear performance measures also makes it easy to benchmark the company's performance against other organizations and industry standards.

This sheds light on areas where you should focus your performance improvement efforts to remain competitive.

Keep track of these key performance metrics to track performance improvement.

Productivity

It gauges the efficiency with which employees create valuable results from the resources they use.

Work quality

Tracks the quality of employees' output against the company's standards. It checks the employees' commitment to accuracy and attention to detail using measures like error rates.

Work efficiency

Measures employees' effectiveness in accomplishing tasks. It assesses their ability to achieve the desired results with the resources and time they have available.

L&D metrics

Assesses the employee's acquisition of new skills and knowledge relevant to their role. It reflects their dedication to personal and professional development, which affects their performance.

Goal achievement

It measures employees' capability to manage and meet their set targets and objectives within the given time frame. 

Revenue per employee

It's the average revenue that's a direct result of an employee's efforts in their role within a given period.

11 Examples of KPIs for measuring improvement in performance

Here are some specific performance measures. They relate to various roles and responsibilities.

Use them to track individual performance improvement over time. 

1. Customer satisfaction scores (CSAT)

Role: Customer support team

It's a measure of how happy customers are with their support interactions.

Customer support agents who improve their performance will have more satisfied customers.

2. Project completion rates

Role: Project management team members and project managers

It's the percentage of projects successfully completed within:

• The pre-defined timeframes
• The project's objectives and specifications

Employees who are improving their performance will have higher project completion rates.

3. Sales growth

Role: Sales representatives

It's the increase in sales revenue percentage compared to past periods.

An increase indicates performance improvement from your sales department employees.

4. Sales conversion rate

Role: Sales representatives

Measures the percentage of leads who take a desired action after interacting with an offer, campaign, or sales process.

An improvement in sales conversion rates indicates performance improvement.

5. Manufacturing cycle time

Role: Operations managers

This is the total time it takes to process raw materials into finished goods.

Reducing the time it takes for a product to move through all the stages of production indicates improved performance.

6. Quality defect rate

Role: Operations managers

This is the percentage of units of production that are defective out of a specific number of units produced.

A decrease in the quality defect rate shows performance improvement.

7. Debt-to-equity ratio

Role: Finance analysts

The debt-to-equity ratio is the level of debt the organization has compared to its assets.

It's the financial analyst's job to maintain minimal debt. So, as their performance increases, the debt-to-equity ratio decreases.

8. Click-through rate (CTR)

Role: Marketers

It measures the percentage of people who click on an ad, link, or CTA out of the total number that sees it.

A high click-through rate corresponds with an improvement in a marketer's performance.

9. Server uptime  

Role: IT managers

Server uptime tracks the total time the organization's systems are up and available for use within a given period.

If the server uptime remains consistently high, it indicates a strong performance improvement.

10. On-time delivery

Role: Supply chain managers

It checks the effectiveness of supply chain managers in ensuring customers receive products as per agreed-upon commitments.

An improvement in on-time deliveries indicates their performance is improving.

11. Work in progress (WIP)

Role: Manufacturing managers

Maintaining work in progress at an optimal level is a sign of performance improvement.

High WIP levels may suggest inefficiencies in the manufacturing process. Low WIP levels might show there's underutilization of resources.

➡️ We have created some extra 30+ role-based employee performance metrics. Use them to track performance improvement.

🤖 Step 3: Use technology to track performance improvements

Tech has become a game-changer in how organizations track performance improvement.

Bailey Borzecki, HR Inspirations Manager of Dogfish Head Brewery, gives an accurate description of HR tech. She compares it to how people keep diaries and journals to see their progression, "It allows us to tell the story of the co-worker."

Tech keeps employee performance data in a central place, which makes it easy to track progress.

The right performance management tech will help you in 5 ways.

1. Real-time performance tracking

Performance development software integrates with tools like project management and customer service software.

It provides a single source of real-time and accurate performance data for tracking metrics and KPIs.

2. Goal tracking

The right tech will provide goal-tracking tools to:

• Define and track the KPIs for each performance goal.
• Split the goal into sub-goals for easier management.
• Assess progress toward the performance goals in real-time.
• Analyze visual representations of goal progress.

3. Tracking improvements in performance review results

You can view historical data as a reliable baseline to track employees' performance improvement. This includes:

• performance review ratings;
• records of performance review conversations;
• feedback from multiple raters.

4. Anticipating future performance

AI in performance management tools helps predict future performance through predictive analytics.

It provides insights into an employee's potential by analyzing their current performance data.

5. Better alignment of performance improvement with the broader objectives

Automated performance management lets you track metrics matching the organization's strategic goals.

It ensures that your organization's priorities are the focus of your human capital. This facilitates long-term business success.

The competitive advantage of performance management tools compared to manual processes

Manual performance review processes often rely on quantitative data. They don't capture qualitative data, such as insights from past performance conversations.  

Performance management tools support a holistic view of the employee's performance improvement.

They support the analysis of:

• Subjective insights: Obtained from 360° feedback and manager notes from one-on-one meeting tools. 
• Objective insights: Derived from data collected through key performance indicators.

Besides, performance review systems don't only provide numbers. They also help you understand the narrative behind numbers.

You can analyze employee performance data using tools like visual dashboards, charts, and graphs to spot patterns.

➡️ We have created a list of the best performance management tools for collecting and evaluating employee performance data. Check it out.

🤝 Step 4: Offer continuous support

Creating performance improvement plans with targets and then ignoring employees for the whole year is not the right approach.

Check in continuously. And tailor the support you provide to match the specific requirements of each individual.

Effective continuous support looks like this:

• Regular check-ins: Hold weekly one-on-one conversations between managers and employees. It's an opportunity to track progress, remove blockers, and provide personal feedback.
• Regular performance coaching: Conduct employee performance coaching to help them reach their full potential. Besides improving performance, coaching has extra benefits, such as increasing employees' self-awareness and resilience.
• Employee training programs: Provide the learning resources necessary to enhance their skills and improve performance.
• Recognition and rewards: Acknowledge incremental improvements in the employees' performance. It inspires and motivates them in their pursuit of excellence.

➡️Are you wondering how to have these check-in conversations? We have crafted 17 powerful one-on-one meeting templates to help you out.

🆚 Step 5: Be mindful of temporary spikes in performance vs. consistent improvement

In the past, a performance improvement was a performance improvement. Regardless of the context in which it occurred.

Now, things are a tad different and better.

As Blakeley Hartfelder, Director at Gartner, puts it:

"In the future, leaders and managers will move beyond just measuring employees' outcomes and consider the context in which employees' outcomes are achieved: their personal goals, the circumstances in which they work, the teams to which they belong, and the type of work they complete."

Paying attention to the context in which a performance improvement occurs helps you track consistent improvements. Not temporary spikes.

An internal competition, such as a sales contest, for example, can cause a temporary spike.

To avoid this pitfall, analyze performance patterns over extended periods.

A long-term analysis can reveal consistent behaviors in the employee. It can tell whether they are consistently meeting or missing performance expectations.

How frequently should you measure performance improvement?

Many organizations assess performance improvements once or twice a year. But, if you can, make it quarterly.

A quarterly evaluation reveals performance trends early enough. It creates a regular feedback loop that helps employees make timely adjustments.

🕵️‍♀️ Why is it important to measure performance improvement?

Measuring performance improvement identifies areas for targeted employee development. It also accomplishes a lot more.

1. It helps with recognizing and rewarding genuine improvement

Measuring performance improvement enables you to link your rewards system to performance.

Such a transparent reward system fosters healthy competition among peers. It boosts performance improvement a little more.

2. It's a motivational tool, encouraging growth

When employees know you're tracking their performance improvement, they will likely put in more effort. They know if they slack off, it'll come out.

Additionally, quantifying their progress over time encourages them to strive for better performance.

3. It drives organizational success

Measuring performance improvements cultivates a culture of continuous improvement. It builds a high-performing team.

A strong team of high performers makes your organization a dominant force in the industry.

4. It facilitates better decision-making for HR and senior management

Measuring performance improvement supports data-driven decisions.

HR and senior management can gain insights to help with decisions like salary adjustments and succession planning. 

➡️ Improve employee performance with Zavvy

Scottish poet Robert Burns said, 'The best-laid plans of mice and men often go awry.'

But with the help of Zavvy's all-in-one performance management software, you can ensure success in tracking performance improvement.

Check out how Zavvy can empower your efforts:

• 📊 A fully customizable performance review software lets you gather data from 360° feedback. You get access to powerful feedback analytics to track performance improvement.
• 📈 You can use our performance development software to create well-defined development paths. It guides employees in improving their performance. Plus, Zavvy AI is available to help you create detailed and targeted development plans.
• 🎯 With our handy goal management software, you can manage the goals of all your employees. A progress bar makes it easy to identify and check in with employees who are slacking in their progress.
• 📚 You can provide employees with learning resources from our learning experience platform. Or create your own training courses using an AI-powered course builder.
• 💬 A state-of-the-art one-on-one meeting software makes it easy to provide personalized ongoing support. You can arrange a consistent series of one-on-one check-ins by setting customized recurrence rules.

📅 Book a demo to see how these tools can work together to make measuring performance improvement easier.