5 Tips for Managers to Measure Operational Performance

As a local manager, it is essential to regularly measure the operational performance of your employees, i.e. their ability to achieve the objectives set, within the given deadlines, with optimal use of the means and resources at their disposal.

This performance evaluation is a real management tool. In the event of underperformance, it will make it possible to implement calibrated corrective actions in order to boost collective performance. But how do you effectively measure the operational performance of your teams as a manager? Here are our 5 tips.

 

1. Set SMART goals

Above all, it is essential to set clear and precise objectives. Indeed, operational efficiency will be difficult, if not impossible, to measure if the objectives set upstream are vague and flawed.

Be sure to set SMART goals (simple, measurable, achievable, realistic, time-bound), aligned with management’s strategic directions.

The objectives may, for example, relate to the volume of activity, turnover, profitability, profitability, operational and industrial performance, the value chain, operating profit, etc.

 

2. Define operational performance indicators

It will then be necessary to identify KPIs (key performance indicators), operational performance indicators. These are essential measurement tools to accurately assess the level of performance of teams.

These KPIs can be qualitative or quantitative. They will be different according to the expectations of the manager and the management and may also vary according to the company’s sector of activity and of course, according to the department concerned.

Thus, the operational performance indicators will be different for:

• the marketing department (conversion rate, cost per click, cost per action, return on investment on advertising spend, lead conversion rate, competitiveness, etc.);
• the sales department (turnover rate, average basket, number of customer visits, number of orders, customer satisfaction, quality of service, etc.);
• the HR department (absenteeism rate, turnover, employee satisfaction, etc.);
• the logistics and supply chain department (supply chain production rate, yield, cycle time, cost reduction, etc.).

 

While it is important to rely on quantitative measurement tools, it will also be necessary to take into account the individual performance of each employee and find the balance between several qualitative performance indicators, such as:

• the rate of objectives achieved;
• meeting deadlines;
• the rate of absenteeism;
• the means used;
• the quality of the work;
• the level of productivity and efficiency;
• the degree of autonomy and initiative;
• …

 

3. Use a performance data analysis tool

It will also be very wise to centralize all the data relating to operational performance. To do this, it is possible to Create a dashboard with a rating scale that evaluates the average of performance. But there are also dedicated management tools and software (such as an ERP – Enterprise Resource Planning – or an EPM – enterprise performance management), which will allow you to automate the measurement of operational performance over a given period.

 

4. Monitor performance regularly

Measuring operational performance will only be beneficial if it is carried out on a regular basis (weekly, monthly, quarterly, etc.) and rigorously analysed. The manager will thus be able to steer the progress of progress and the achievement of objectives.

This performance analysis should be complemented by individual interviews and regular feedback to better understand any difficulties encountered and effectively target the strengths and weaknesses of each employee.

 

5. Identify areas for performance improvement

Finally, the manager will be able to identify, based on the established observation, the causes of underperformance (lack of commitment, absenteeism, unsuitable management style, unclear objectives, etc.) and implement corrective actions to improve employee performance, such as:

• adopt your managerial style ;
• offer team building activities to strengthen team motivation, commitment and cohesion;
• offer training to develop the skills of the teams;
• improve communication;
• set SMART goals;
• improve well-being at work;
• Improve the optimization of processes and methodologies;
• implement an agile method (with tools such as Scrum, Kanban, or the Lean management method)

 

More than anything, it will be essential to place operational excellence at the heart of the corporate culture, and to integrate it into a continuous improvement process.

 

To learn more about the subject, read our article: “How to improve the performance of your teams?”.