Regular performance reviews are increasingly a thing of the past. One study found that 95% of employees are dissatisfied with their employers' appraisal process, largely due to the lack of accurate information and history-facing nature of the process.
That's probably why companies like GE and Adobe are completely overhauling their performance management. They recognize that more effective means have to be implemented to actually bear fruit for the enterprise.
Among those means: leadership evaluation. It's easy to appraise the performance of a desk worker or sales agent with defined goals. Evaluating company and team leadership, on the other hand, tends to be more challenging. As a result, few companies have actually implemented an effective system to accomplish that feat.
That doesn't have to be the case. Any comprehensive performance management strategy should find its way up the organizational chart, particularly when it comes to team leaders. We know that teams are the backbone of a future-facing organization, and teams can only be successful through the right leadership. So why not make an effort to evaluate, improve, and coach that leadership in the right direction?
To do that, you need the right metrics. Simple sales goals won't do as much good here as it would for the evaluation of a sales agent. Instead, consider these 5 crucial metrics for evaluating your team leaders' performances.
1) Team Member Feedback
It might be an informal metric, but feedback from the team reporting to the leader is an absolutely crucial part of the evaluation process. Productivity, success rate, and other more quantitative KPIs matter little if the team working under the manager just cannot get along or has been alienated to a degree where its long-term productivity and job satisfaction is in jeopardy.
On the other hand, some of the best leaders thrive based on these intangibles. Through feedback, ideally collected in a way that gives each member of the team the opportunity to chime in on the same questions privately, you can gauge overall success and get initial ideas about many of the more specific metrics below.
2) Team Turnover Rate
How long does your team stay together? How often do members of the team request to be moved elsewhere, or how often does the leader request a switch, and how often do your employees leave the organization altogether? You can answer all of these questions through measuring the turnover rate of your team.
The equation is simple: Over the course of the evaluated period, divide the number of original team members from the start of the period by the total number of members in the team. This metric is best used when bench marked across the organization, allowing you to understand which teams tend to stick together, which float more, and what the leader might have to do with those trends.
3) Project Delivery Success Rate
It's time to talk about productivity. Naturally, a team leader can only be as successful as the results their team produces. It's not the only metric that matters, but a crucial one that ultimately helps to drive organizational performance as well.
How many projects can the team successfully deliver compared to the total amount of projects taken on? This metric simply takes outputs over inputs to come up with a success rate. Easy to calculate, but also potentially misleading.
Don't forget about the total volume here. A team that only takes on one project but delivers successfully will have a better success rate than a team taking on 7 projects and completing 6 in the same time frame. That's why the percentage should always be considered in context of the projects themselves.
4) Conflict Resolution Rate
Especially teams that work together on a long-term basis, they will eventually run into conflicts. These conflicts can occur both within the team and with others outside of the group. The mark of a good leader is not avoiding conflicts altogether, but managing them successfully without requiring external input.
Ask your team leaders to jot down each time a conflict occurs, and the measures taken to diffuse it. Mark when it had to be escalated, and when it could be resolved within the context of the team. Through those metrics, you can determine the team's conflict resolution rate alongside some of the contextual clues that give you better insight into the leader's abilities in this area.
5) Team Development Rate
Finally, no leader can be considered successful when they don't look out for the best of their employees. Great managers spot talent, develop it, and help it achieve new heights. Measuring the rate at which this happens can give you insight into the degree to which the leader cares not just about outcomes, but the greater good for every member of the team as well.
Development here can mean anything from promotions to simple professional development opportunities. Perhaps it's taking on new responsibilities or attending a conference to refine existing skills. Again, the goal here is not to quantitatively define the metric, but to consider contextual cues to understand leadership performance.
The Evaluation is Only the Beginning: Building an Effective Performance Management Framework
These five metrics, a helpful mix of intangible and tangible success KPIs, can help your organization improve the ways in which it evaluates team leaders. A healthy mix of quantitative and qualitative factors ensures that you can judge leaders on a more comprehensive level, allowing for a more forward-facing approach.
Ultimately, for any organization, performance management should include more than just the evaluation. It also needs to incorporate next steps, takeaways from that evaluation that can lead to better performance for the manager and the organization as a whole. Each of these metrics is designed to accomplish just that, looking not just backwards into the past but also into the future.
To build a comprehensive performance management framework, metrics need to lead to next steps. A leadership development program, of course, will be absolutely essential to accomplishing that next steps and turning leadership evaluations into tangible improvement opportunities. Contact us today about training opportunities, building a more comprehensive strategy designed to move your organization forward.
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