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Tracking performance metrics provides a way for businesses to measure growth and development. Productivity, profit margin, scope and cost are some examples of performance metrics that a business can track to determine if target objectives and goals are being met.

There are different areas of a business, and each area will have its own key performance metrics.In this article, we’ll discuss what performance metrics are, why you should track them and four types of key performance metrics.

#### What are performance metrics?

Performance metrics are measurable data used to track processes within a business using activities, employee behavior and productivity as key metrics. These metrics track and measure the achievement of overall business goals.

Performance metrics are a collection of data that employers evaluate against an established objective (like employee productivity or sales objectives). It is important to note the difference between a performance metric and a key performance indicator (KPI).

Performance metrics are measured within an area of a business against an established objective or goal. Performance metrics result in broader data than a key performance indicator.

A KPI will use a specific target metric to measure performance. For example, a performance metric might measure the productivity of a marketing department compared to a set goal, whereas a KPI would measure how a marketing department contributed to sales from an email campaign.

### Why track performance metrics?

Tracking these performance metrics is important because it can benefit an organization by providing valuable information on what is working to drive growth and profit. 

Performance metrics aid in implementing strategies for meeting objectives across all aspects of an organization. Tracking performance metrics can drive planning for improvements, adjustments and changes to a business’s processes to meet goals

### Types of performance metrics to track

An organization uses performance management strategies by tracking metrics that measure areas such as sales, project management, employee productivity and overall business processes.

Within each of these business performance areas are metrics that measure different key aspects. For example, sales metrics are a type of business performance metric that measures sales data.

Most businesses track a common group of performance metrics to measure success and meet objectives. Good performance metrics should provide data that can be applied right away to reach business goals. The following are important metrics businesses use to track performance in each area.
1. Business performance metrics
2. Sales performance metrics
3. Project management performance metrics 
4. Employee performance metrics

#### 1. Business performance metrics 

Business performance metrics track and assess specific processes within a business, such as sales, marketing and profitability. This allows for comparing data against established objectives or goals.

The resulting data from tracking performance metrics helps businesses determine where to make adjustments to reach set goals. Three important metrics to track within the overall growth of a business include:

**ROI indicators**: ROI indicators are important metrics to track because this data can determine whether an investment will result in a return (profit) or not. Tracking ROI can help businesses decide which investments are worth pursuing and which are not. For example, an investment that guarantees a return rate of 20% offers a greater ROI compared to one that can only ensure a return of 10%.

**Profitability**: Profitability is an essential performance metric that tracks a business’s profit margin and compares that data to target goals. This can help determine if any adjustments are necessary to reach those goals. For instance, a business can use profitability metrics to track its average profit margin compared to its goal profit margin. The company can use this data to change sales methods used to generate profit.

**Productivity**: Productivity metrics measure the ratio of work generated to the resources used. For example, an assembly line employee who can produce 100 items in an hour is more productive than one who can only produce 50 items in an hour.

#### 2. Sales performance metrics 

Sales metrics measure an individual’s or a team’s performance in sales of a business’s products or services. Common sales performance metrics can include sales action, lead generation and retention and key performance indicators like total revenue and customer reach.

Companies track sales metrics by comparing these actions to sales goals the team or company sets. Monitoring each area will provide valuable insight into how a business’s sales methods are working.

Key sales performance metrics include:

**Activity**: Activity metrics provide data on what a business’s salespeople are doing daily. Sales managers can influence sales activity (like implementing daily sales quotas or a minimum number of sales phone calls), making it manageable to track. Sales activity is measured through metrics like the number of calls made or emails and proposals sent to prospects.

**Lead generation**: Lead generation metrics are important to track so businesses can assess the prospect stage of acquiring new sales. Average lead response time and percentage of follow-ups are two examples of good lead generation metrics to track in sales.

**Sales productivity**: Sales productivity metrics track the rate at which a salesperson or team meets revenue goals. The less time it takes for a revenue goal to be met, the higher the sales productivity. Data such as time spent on selling activities and the average number of sales tools used during that time are examples of sales performance metrics.


#### 3. Project management performance metrics

Project management performance metrics are used to measure the effectiveness and profitability of a project. From the first assignment brief to its completion, the processes within each stage of a project are measured and compared to goals and objectives. This data can offer insight into how the project should be completed. A project manager typically tracks performance metrics from areas including: 

**Productivity**: Tracking productivity provides data that enables a project manager to assess resources used to complete the project and total effort made within the project parameters.

**Scope of work**: Metrics that measure a project’s scope provide data that can help determine the timeline and budget needed to complete the project.

**Quality and satisfaction**: Quality and satisfaction metrics measure the quality of the project’s deliverable at its completion and include customer-centric data.

**Cost**: Cost metrics are key performance metrics to track in project management. Cost management needs to account for any unexpected variables that could arise during the project timeline.

**Gross margin**: Gross margin is the difference between the total cost of the project and the revenue it generates for an organization. Gross margin is a key performance metric and is usually targeted at the beginning of a project, keeping the process focused on a set revenue goal. 


#### 4. Employee performance metrics 

Employee performance metrics assess employees’ productivity and efficiency in reaching established benchmarks that contribute to the overall growth of a business. Tracking employee performance metrics helps managers can influence adjustments or make necessary improvements to help employees reach their work goals.

Common employee performance metrics that businesses track include: 

**Quality**: Work quality metrics are used to measure the quality of employee performance. Subjective appraisal is the best-known metric to measure work quality as it breaks down broader business goals into smaller, individual employee goals that can be achieved with support from management.

**Quantity**: Work quantity is another employee performance metric to track as it is easier to measure than quality. Common metrics measured include number of sales or items produced.

**Efficiency**: Work efficiency metrics combine data from work quality and quantity to track the resources used to produce an output. The time or money it takes to produce a product is an example of a work efficiency metric to track.

**Productivity**: Employee productivity is a key performance metric that can help businesses change processes, behavior and meet target goals.



### Conclusion

It's pretty hard to improve anything you can't measure measure. Measuring the wrong things aren't also superhelpful and can sometimes be a net-negative since it wastes time and focus.

This article details 4 key areas you should be measuring in your business, and different metrics you coul d measure.

[Drogo](https://drogo.ai) helps you assign specific KPIs and goals to employees, and automatically track progress made on them.


Tracking performance metrics provides a way for businesses to measure growth and development. Productivity, profit margin, scope and cost are some examples of performance metrics that a business can track to determine if target objectives and goals are being met. This article explores what metrics you should be tracking, and how to best track.

Atomic improvements

4 Types of Key Performance Metrics To Track In Your Business