The Best Employee Performance Metrics to Track (And How)

Employee performance metrics show how well (or not so well) your people contribute to business goals through their work, outputs, and engagement.

They’re a key part of the performance management process, something most businesses have in place, but only a fraction do well. Only 20% of companies rank their performance management process as very effective in providing employee feedback, increasing individual performance, and developing talent. 

The reason? Most managers lack meaningful data to make objective evaluations and coach people to do better in their roles. But that can be fixed, as we’ll explain in this post!  

TL;DR — Key Takeaways

• Employee performance metrics aren’t a grading tool — they’re a method for collecting insights for business growth. The right data helps you spot top performers, fix broken processes, improve resource allocation, and increase business profitability. 
• Your people, in turn, benefit from clearer performance expectations, constructive feedback, and greater recognition — a ‘recipe’ for high engagement and top-level productivity. 
• To get a valid take on your business performance, blend hard data (e.g., task completion rate, error rate, RPE) with qualitative insights (e.g., engagement rates, peer feedback, and collaboration scores).
• Performance metrics should guide strategy, not pressure people into performative work. Align metrics with company values, personalize OKRs, and combine short- and long-term data to get a full picture of progress. Keep expectations transparent and review cycles shorter to catch issues early and support real growth.
• To improve employee performance evaluations, align metrics with business goals, involve employees in defining success, and use different groups of metrics to get a 360-degree view of people performance. And skip the surveillance tools; focus on outcomes, not sham activity, to build trust and track real progress. 

Why measure performance metrics?

As the adage goes, “If you can’t measure it, you can’t manage it.” When you don’t know how different parts of your organization function and contribute to the shared goal(s), it’s easy for efforts to be misplaced. And that’s already a big problem. 

Globally, only 37% of businesses consider their people high-performing and engaged. And the media also paints a bleak picture of ‘problematic Gen Z work ethics,’ ‘global productivity crisis,’ and ‘growing number of burnout nations.’ 

As always, the devil is in the details. Employee performance isn’t one number — it’s a mix of key performance indicators (KPIs) that capture different sides of impact. While metrics like ‘total number of work hours’ might be down, others like ‘productivity per hour’ might be on the rise. 

A mix of qualitative and quantitative metrics highlights who’s really driving the results (and who’s just busy being busy). This leads to better employee recognition, project staffing decisions, resource allocation, and overall organizational performance. 

Benefits for organizations

• ⚙️ Improved business productivity. Metrics level-set individual effort and business goals, describing what success looks like. You give employees a clear target and give reasons to aim higher (through regular recognition and financial perks).  Over time, that clarity drives better focus and higher employee productivity.

• 📮 Better resource allocation. Only half of managers think their company effectively aligns budgets with corporate strategies. This translates to under-staffed teams, underfunded training programs, and delayed deliverables, crippling business growth. Performance metrics help you better understand which teams and organizational initiatives drive the most impact and budget accordingly. 

• 🪜 Effective succession planning. With the rapid ageing of the population, companies are losing skilled leaders. Metrics identify high-potential talent early on and support their progression to build a stronger leadership pipeline. You also get fewer ‘surprises’ post-promotion as your succession decisions are backed by evidence, not gut feelings or personal biases. 

• 💰 Higher profitability. Metrics shed light on high-impact activities, helping your people do more of the ‘right stuff.’ They also draw attention to inefficiencies, resource waste,  and other blockers, stalling progress. By doubling down on the former factors and eliminating the latter, you can grow a healthier profit margin. 

Benefits for employees

• 📊 Clarity on performance expectations. Metrics enable management by objectives, a structured process for defining performance goals via personalized OKRs. This clarity builds better trust in performance management, something 61% of managers and 72% of workers currently lack. 

• 🎨 Opportunities for skill development. Effective performance measurement isn’t punitive — it’s a tool for growth and guidance. By knowing where your people fall behind, you can develop better organizational development initiatives and prioritize learning and development opportunities to upskill your staff. 

• 🥳 Timely feedback fosters employee satisfaction. Regular, constructive, and personalized feedback ignites performance. When managers provide daily feedback, employees are 3.6x more likely to be motivated to do outstanding work, and metrics make this easier to do. 

• 🪴 Predictable career growth. Stalled careers lead to open exits. Alarmingly, 65% of workers report feeling ‘stuck’ in their careers, rising to 70% in the tech sector. Metrics help managers establish better competency grading systems and chart predictable paths for promotion, improving retention. 

Key employee performance metrics to track (and how)

The most effective performance management strategies blend hard data with qualitative insights (like peer feedback or leadership potential). This mix gives you a more accurate, fair, and holistic view of how different employees contribute, enable, and support your business growth.

If that’s the kind of insight you need, here’s a breakdown of what performance metrics to monitor and how to actually use them.

Task completion rate

Task completion rate shows how well work gets done by tracking the percentage of crossed-off tasks, resolved tickets, or delivered assets. The higher the task’s completion rate, the more efficient your team is at translating intent into impact! 

Marketing managers can track the number of launched paid ad campaigns versus those stuck in “review limbo.” Sales teams can look at the number of closed deals or scored leads to gauge performance. Agile software engineering teams, in turn, use Sprint burnout charts that measure remaining work (user stories, bugs, technical debt items, etc) in each boxed timeframe. 

Quality of work

Let’s be clear: Organizational success isn’t about volume outputs — it’s about making targeted, meaningful progress. If your team produces a lot of real (or sham) outputs, but the quality of work is meh, you’re in trouble. 

Quality-focused metrics like the number of errors, revision rate, or stakeholder approval scores tell you how well the work gets done. For design teams, you might monitor brand adherence or UX testing success rates. Customer service teams track quality metrics like first contact resolution rate, customer satisfaction score, and average response quality rating. 

Most teams rely on quantitative quality indicators from business tools and qualitative manager evaluations, peer reviews, and structured customer feedback loops. This way, you can spot recurring mistakes or missing employee abilities, which can be addressed through process redesign or training programs.  

Revenue per employee

Revenue per employee (RPE) metric tells how much monetary yield individual employees produce for your business, giving you a snapshot of operational efficiency and workforce impact. 

Unlike others, this metric isn’t universal, as many important back-office roles only contribute to revenue indirectly (e.g., HR professionals or facility managers). But it’s a good one to track for customer-facing teams like Sales, Support, Account Management, Procurement, or Field Services, where every missed day can mean a missed deal or lost business opportunity.

Employee engagement

Fact: Happy, driven, and inspired people make productive teams — and work environment factors like company culture, work-life balance, and recognition programs strongly affect the employee experience.

Employee engagement may be a human resources domain, but great managers track the pulse, too. You can spot motivated people by the way they show up. They seek out ways to improve workflows, bring new ideas to the table, and volunteer to pick up extra slack when the situation calls for it. They care deeply about their work and feel more invested in the company’s success, and this should be reflected in their performance evaluation. 

Disengaged people, on the contrary, show signs of withdrawal. They don’t actively participate during meetings, show little initiative, and harbor negative attitudes. Measures like quick pulse surveys, one-on-one check-ins, and project retrospectives help managers better reward top performers and offer timely support to those falling behind. 

Absenteeism rate

In the worst-case scenario, disengaged employees resort to absenteeism — they miss work unexpectedly or more often than usual.

These absences can increase due to sickness, burnout, stress, and mental health issues. Employee burnout alone resulted in 20% of UK workers taking time off work last year. 

Overall, rising pressures at work increased annual absence rates to 14% in countries like Czechia, Germany, and Belgium — meaning employers aren’t doing enough to support their people’s well-being. 

When monitoring absenteeism levels, managers can step in early and start supportive conversations to avoid disruptions to team performance. Instead of defaulting to discipline, they can adopt a more empathetic mindset to retain their people. Organizational changes like more flexible schedules, overtime bans, or mandatory vacation leaves are also worth considering. 

Such employee wellness measures are effective at preventing burnout and increasing engagement, which compound to higher employee productivity.

Time management

Time management metrics reveal a lot about how your business works. Rather than guessing who’s overloaded or distracted, you can tell exactly where most efforts go with time tracking categories like billable hours, meetings, deep work, client communication, or learning. 

Tools like Toggl Track spotlight teams’ work patterns without the slimy feel of micromanagement. Users can log (and edit) their daily activity to get insights into their focus areas, common blockers, and time wasters. Managers, in turn, benefit from better visibility into workload allocation, process efficiency, expense trends, and capacity needs. 

By seeing what’s working (and what’s not), you can coach your teams to adopt better time management strategies to work smarter (not longer). Try time blocking to tackle similar tasks in one productivity burst. Or use the Covey Time Matrix to prioritize tasks more effectively.  

When combined with project management software, time insights also give managers better clarity into deadlines, task priorities, dependencies, and scheduling conflicts — aka everything that usually derails timelines and balloons operating costs. That kind of visibility turns reactive firefighting into proactive planning and keeps projects on track.

Error rate

Error rates measure how often slip-ups happen in an employee’s work, whether typos in a client proposal, skipped steps in a manufacturing process, or incorrect data entries in a report. 

No person produces 100% error-free work every time. But consistently high error rates hint at underlying issues like skills gaps, overly complex processes, or missing instructions.

A root cause analysis will lead you to the right remedy. For example, you might improve the handoff process between teams, create a targeted training program, or upgrade legacy software to streamline error-prone processes.

Customer satisfaction score (CSAT)

CSAT offers feedback on how well client-facing employees perform in the eyes of the people who matter most — your customers. Typically measured with a quick survey after a recent interaction, such as a support chat, a sales call, or a service appointment, CSAT tells you how you can make your customer experience even more delightful. 

Low CSAT scores for individual employees can mean they lack essential customer service skills like active listening, strong communication, and empathy. They can also indicate deeper problems in your processes. 

Net Promoter Score (NPS)

Similar to CSAT, NPS is a key indicator of customer loyalty and satisfaction. High NPS scores mean almost guaranteed business growth because people stay loyal to your brand and advocate for it publicly. 

Tying NPS to employee performance reveals what your customer teams are nailing and what’s holding the experience back. For example, if one client success manager consistently gets top promoter scores, they can coach others to copy their approach.

Effectively, individual NPS scores become jumping-off points for shared team learning, customer knowledge sharing, and, ultimately, better company-wide customer experience strategies. 

Work efficiency

The most profitable businesses know how to achieve optimal results with limited resources. Unlike raw productivity, which can focus on volume alone, efficiency looks at how work gets done. 

Work efficiency metrics like output-to-input ratio quantify how business results (e.g., number of sales or units produced) correlate with the total number of resources used (e.g., employee hours or budget). Meanwhile, cycle time tells you how long different tasks take to complete. All of this helps you assign better goals, build more realistic timelines, reduce repetition, and unlock greater work efficiencies.  

Teamwork and collaboration

Team productivity is the sum of individual contributions plus interpersonal synergy. Measuring collaboration, communication, and emotional intelligence shows how well your people actually work together. 

Observe how different team members contribute to group discussions, communicate across roles, manage handoffs, and accept feedback. This way, you can understand not just who’s productive but who helps others be productive. 

Tools like peer reviews and 360-degree feedback can make this process more structured and objective. Netflix famously ditched annual performance reviews for shorter, less formal  360-degree feedback loops, where everyone in the company regularly suggests what their peers should stop, start, or continue doing (including the CEO). This helped the company build one of the strongest cultures, which drives high employee performance and retention. 

By using a similar approach, you can better identify collaboration rockstars and ‘glue people’ who secretly hold it all together! 

Task prioritization

Productivity drops when people get buried in busywork — attending meetings, doing endless admin, or ‘following up’ with unresponsive colleagues. Important tasks then get moved to the back burner, which is no bueno. 

Task prioritization teaches your people to choose the right tasks to focus on when work gets hectic. It also helps employees feel less stressed and decision fatigue, both essential for great well-being. Teams that prioritize well consistently hit goals faster and avoid getting sidetracked by low-value distractions.

You can coach your people to get better at task prioritization by:

• Using frameworks like the Eisenhower Matrix to sort tasks by urgency 
• Linking tasks to company ORKs or team goals to communicate impacts 
• Adding points to user stories to mark priority levels 
• Reviewing priorities during standups or 1:1s to realign as goals shift
• Celebrating crossed-off high-impact tasks to reinforce the value of smart prioritization

By mastering task prioritization, your teams won’t get sidetracked as easily by conflicting priorities and the occasional operational chaos. 

Employee retention rate

Employee retention (and employee attrition) rates signal how valued and supported employees feel in their roles. 

High retention rates often point to an effective hiring process, proactive onboarding, good managerial leadership, and a healthy workplace environment. On the flip side, when people leave en masse, it’s a tell-tale sign you’ve got some deep issues boiling. Workers cited a higher pace of change (and lack of equivalent salary growth), career ambitions, and problematic culture among the top reasons for leaving their last job. 

If spotted early, all of these issues can be effectively addressed to prevent attrition and the painful costs of hiring a new employee. For example, job enrichment can retain people who feel uninspired in their current role and seek growth. Cultural initiatives like manager training or inclusive team-building can build better trust and improve morale. 

Ultimately, retention should be viewed as a long-term metric closely tied to employee engagement and workforce development efforts.  

Learning and development participation

Businesses must critically upskill their workforce as talent gaps grow bigger for in-demand skills and the pace of technological change accelerates. 

By measuring how often people take part in training or skill-building activities, you can:

• Identify people with a growth mindset for reskilling 
• Nurture candidates for internal recruitment 
• Sharpen your internal mobility strategy 
• Find motivated course authors or mentors 
• Justify bigger L&D investments with participation data

…and progressively build a culture of learning at your company by linking L&D goals to career progression plans so your people see a clear payoff. 

Managerial effectiveness

Managers are responsible for 70% of the variance in team engagement and performance. Leaders with top people management skills know how to guide, support, and empower their team to hit all the performance benchmarks. And those with so-so ones? They drive top performers away and breed mediocrity. 

To evaluate how well managers cope with their role, track:

• Team goal achievement rate to evaluate how consistently the team meets set OKRs. The manager may have poor project management, prioritization, or workflow planning skills if the team often underperforms. 

• Cross-functional collaboration score tallies feedback from peer or partner teams on how well the manager enables cooperation. Low scores can indicate territorial behavior, lack of transparency, or misalignment with wider business objectives. 

• Direct report retention rate. 7 in 10 people quit their jobs last year over a bad manager. If one team has significantly higher attrition rates, you might want to check in with the manager. 

• Internal mobility enablement. The goal of a great manager is to nurture a future bench of talent. High frequency of promotions, lateral moves, or upskilling facilitated by the manager are all great signs of a job well done.
  
• 360-degree feedback score shows how well the manager is perceived by direct reports, peers, and senior leaders, which indicates their ‘fit’ with your company. 

A combination of KPIs tied to things like team retention, goal completion, and cross-functional collaboration allows you to easily distinguish (and laud!) your best managers. 

Call resolution efficiency

Top-notch customer experience is a combination of speed and effectiveness in customer issue resolution. A combination of call resolution efficiency metrics can give you insight into how effective your reps are at problem-solving. 

For example, a high first-call resolution rate and low call transfer rate indicate strong competency of your L1 service teams. Low average resolution time, paired with a low repeat contact rate, indicates effective troubleshooting workflows. 

Human capital ROI

An employer’s human capital ROI is the difference between the revenue generated by an employee and their costs in terms of compensation, benefits, and training, expressed as a percentage. 

It helps managers: 

• Identify high-impact roles to place top performers 
• Justify talent development initiatives
• Advocate for higher compensation 
• Develop better talent retention strategies 

But there’s a caveat: since not all roles bring direct revenue, HC ROI can be misleading without extra context. Some of your best data scientists, for example, may show negative ROI on paper but produce innovative research that will pay back 10x in the long term. Similarly, market shifts (e.g., seasonality in sales) or team dynamics (e.g., recent employee exits) can also skew an individual’s ROI. 

To avoid tunnel vision, pair this metric with qualitative insights and broader workforce insights like leadership potential, work efficiency, or collaboration effectiveness. 

Self-assessment scores

Employee self-scoring sparks reflection and accountability, helping your staff assess their contributions, strengths, and areas for growth. Because people use their own words to express their achievements, goals, and challenges, you gain even more meaningful insights that regular performance reviews may not surface. 

The practice also builds better trust in the performance evaluation process, effectively providing managers with ‘talking points’ so they don’t overlook essential contributions and focus clearly on actual struggles. 

Similarly, it avoids perception gaps that emerge when an employee overestimates or underestimates their impact. This opens doors to more meaningful coaching opportunities, transparent communication, and constructive performance conversations. 

How to measure employee performance metrics

Employee performance skyrockets when metrics guide your strategy rather than box everyone into the same mold of inflated expectations. 

Your people should never be in the dark about what you’re measuring or why you’re focusing on a specific metric. Lack of understanding brings resistance and mistrust. Or worse — a ‘productivity theater’ strategy aimed at superficially inflating the metrics instead of doing meaningful work.  

To get the best results: 

• Align metrics with company values. Don’t measure what’s easy — measure what matters. If collaboration is a core value, track team contributions, not just solo results.

• Set personalized OKRs for each role. Work with your people to develop OKRs that reflect their unique responsibilities and career goals. Tie each objective to team or company priorities, then define 2-3 key results that are specific, measurable, and achievable. 

• Combine short- and long-term metrics. Monitor weekly progress (e.g., task completion rates or error rates) to spot drift early on and track trajectory metrics (e.g., employee engagement or human capital ROI) to detect performance plateaus or persisting structural challenges.  

• Make performance expectations crystal clear. Employees should know exactly how you evaluate their performance, how it contributes to their career development, and what they can do to influence their results.

Best practices for getting started with performance management

Whether you’re building from scratch or fine-tuning what’s already in place, the next three tweaks to your performance management process make a big impact. 

Align metrics with organizational goals

Effective performance ladders up to business objectives like profit growth, customer satisfaction, or employee retention. When employees understand how their daily actions drive (or derail) company priorities, they see greater meaning in their work and get better at task prioritization. 

The best way to reach alignment is to involve your team in metric selection. Ask how they’d define success and what impacts they’d consider measuring themselves. Collaborative goal setting increases buy-in and creates a stronger sense of accountability. 

Balance qualitative and quantitative data

Hard numbers like sales volumes or completed tasks only tell part of the story. Adding qualitative data like peer feedback on collaboration, enablement, or professional development contextualizes the ‘soft’ factors that drive team success. 

Use anonymous surveys and peer feedback tools to collect unbiased qualitative insights. Reiterate the purpose of such reviews: their goal is to provide constructive feedback, not pass off snap judgments or shift blame. 

Use the right tools (invasive tools are a huge no)

As our Productivity Index report shows, managers seek evidence of employee productivity. But oftentimes, they’re after the wrong metrics. Three-quarters believe they should have access to employee activity tracking and screen monitoring at any time to ensure employees are working efficiently.

Obsessive employee surveillance over ‘vanity metrics’ like number of logged hours or daily desktop activity only backfires: People become less engaged, creative, and vested in their work. 

A better approach is to focus on outcomes — what gets done and how it aligns with business goals — rather than obsessing over every click or keystroke. Select a time management tool that collects meaningful performance data and doesn’t invade your employees’ privacy. 

Build a better business with Toggl

Doing performance evaluations is hard when you lack meaningful data. Move beyond  surface-level metrics with our tools: 

Toggl Track turns time data into insights into profitability, capacity levels, project success rates, and employee contribution — metrics that matter more for your business than the number of bathroom breaks your worker takes during the day. 

Toggl Hire assesses employee skills and performance potential early in the hiring cycle to predict future success, instead of judging the fit by lofty credentials like ‘highest degree’ or ‘years of experience. ’ So that you could avoid costly mis-hires, maintain lower absenteeism rates, and maximize human capital ROI through ongoing upskilling and reskilling initiatives. 

Together, Toggl Track and Toggl Hire offer a powerful, people-first approach to performance (learn more about it here) — aligning individual strengths with business goals and replacing micromanagement with meaningful metrics. It’s easier than ever to get started.

Toggl runs under a single sign-on, so one account gives access to both tools, and we’re now offering bundled pricing to make scaling simple — learn more about it here. 

The best part is that both of our tools come with a robust free plan. Book a free demo today to see our platform in action. 😉