How Using Performance Analytics is a Key Indicator of Employee Success
Insight Into Analytics
The economy has its share of high and low points but in particularly uncertain times like now, it is important for businesses to have a functional system in place for achieving the company's goals. Performance analytics helps you uncover valuable insights that would help your business become successful.
Employee retention has always been a big issue in the restaurant and hospitality industry. In 2019, The Bureau of Labor Statistics reported a 78.6 percent turnover rate in food and accommodation services one of the highest across industries.
Fortunately, organizations are rethinking their performance management approach after findings from Harvard Business Review (HBR) Analytic Services showed that both performance management and employee engagement are needed to improve productivity and talent retention.
However, employee success is not just about retaining talent, it is also concerned with an employee's potential for professional growth. Successful employees not only stay in the company, but they also grow professionally alongside the business.
This is where performance analytics comes in. Using measurable indicators, you have a data-based approach to ensuring employee success and achieving organizational goals.
What are Key Performance Indicators?
Key performance indicators (KPIs), also called key success indicators (KSIs), are a set of measurements used to track a company's progress in relation to its goals.
KPIs track performance in quantifiable terms to gauge the company's level of success and compare it against the targets set and industry peers. In the long term, this can also identify room for improvement and refine your company's financials as well as operational strategies based on the data collected.
There are different levels of KPIs. High-Level KPIs are metrics for the goals of the entire business, while Low-Level KPIs typically measure project-related target or department-specific goals such as in HR or sales. Low-Level KPIs, of course, need to align with the High KPIs to achieve the overall goals.
Part of Low-Level KPIs is setting personal KPIs. Employees can set their own KPIs to track their progress in their specific work.
They could track absenteeism for example or how long it took to finish specific tasks. The more they take ownership of their work, the more engaged they will be, and the more likely they are to succeed. The mere presence of a system for employee success will contribute to the higher goal of company success and profitability.
There are five main types of KPIs- Business KPIs, Financial KPIs, Sales KPIs, Marketing KPIs, and Project Management KPIs. Of course, KPIs can vary depending on the type of business and industry. For example, the most important KPIs for restaurants are Kitchen Management KPIs, Front of House and Staff Management KPIs, and Sales, Marketing, and Administrations KPIs.
This article will focus on KPIs for Employee Success. Here are some examples of KPIs your employees can use to track their growth-
- Personal targets (e.g. sales per guest)
- Time spent per guest/table
- Hourly pay
- Job satisfaction
- Determining individual success
- Boosting performance
- Guiding their decision-making for continued professional growth
How to Track Performance Analytics
Performance Analytics only works if you use the right metrics. Carefully identifying the correct key performance indicators will save you a lot of resources in the long run.
Though KPIs are meant to be refined over time, it is recommended to start with clear, measurable indicators so you only have to refine them, instead of totally replacing or overhauling the system due to inaccurate metrics.
Here are steps you need to create your KPIs-
- Identify an end goal- Having a clear vision of what you want to achieve is the best way to start. This should be simple and straightforward to make it easy to measure.
- List down your Key Performance Questions (KPQs)- This is basically your research question. Limit your question to What and How? Those are kinds that will point you to quantifiable data that you need to collect for your analysis.
- Use any useful data you may already be collecting- Identifying existing data avoids any duplication that may occur when setting up your data collection system. This also helps you define a baseline and set realistic goals from there.
- Do your research- You can collect data about your industry as a point of comparison. Use your peers in the industry as a reference and do not simply copy their KPIs. Every business is different, after all.
- Set a frequency for collecting and analyzing data- Consistent data collection and analysis will help you correct errors, find room for improvement, and adjust your strategy accordingly.
- Identify short-term and long-term goals- Tasks that are broken down into chunks are easier to accomplish, and KPIs are no different. To get to your target annual sales, you might check your number monthly or quarterly to find out if you are still in track or you need to employ new strategies to reach your target
- Identify who is in charge- Assign someone who is responsible for tracking, analyzing, and presenting the results.
- Share the KPIs to everyone in your company- It is important that everyone knows about company goals and the metrics you will be using for performance analytics. This way you are all on the same page and you can ask for their feedback as well.
- Evaluate and adjust as needed your KPIs as needed- KPIs are not set in stone, so adjust your KPIs and your strategies as your company's situation changes.
- Performance analytics, using KPIs, helps companies and individuals determine their level of success and track their progress.
- KPIs are metrics used to gauge whether a company is on track to reach its goals.
- Use only relevant metrics based on your company's goals and research from industry peers.
- There are different levels of KPI- High-Level KPIs for the company's overall goals and Low-Level KPIs which measures project-related targets or department-specific goals.
- The five main types of KPIs are Business, Financial, Sales, Marketing, and Project Management.
- Employees can set their own Employee Success KPIs to track their personal progress.
- Employee Success KPIs help determine individual success, boost performance, and influence their decision-towards continued professional growth.
- KPIs should be SMART Specific, Measurable, Attainable, Relevant, and Timely.