Using KPIs to measure a project team's effectiveness

Key performance indicators play an indispensable role in project management and aid in measuring the success or failure of project activities. Understanding KPIs and selecting the ones that are best-suited to measuring a specific project team’s performance is not always easy.

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Key performance indicators (KPI) serve an essential role as a key measure of how effectively a project has performed in relation to identified, required and agreed-upon strategic objectives. Without KPIs, determining the success of projects and project activities is a guessing game, with no way to quantify goal attainment.

The types of KPIs vary, depending on critical success factors (CSF) like industry, product or service, and stakeholder business and operational strategies. Nonetheless, KPIs must be clearly identified, achievable, and quantifiable in an appropriate form and within specified parameters in order to be completely suitable for a given project. For example, if one CSF of a new software business is to develop a Web-based portal that will garner a specified number of new customers that sign up for a monthly subscription service, then a relevant KPI could be quantitative in nature — something like number of new subscribers.

When deciding on what KPIs to use, you should clearly and accurately define critical success factors first, and then identify KPIs that are most accurately and directly tied to the CSFs. Again, both the CSFs and KPIs must be clearly defined and agreed-upon by stakeholders and they should be ranked in order of importance to the overall business strategy and goals.

Here are some examples of the types of project management KPIs that apply to team performance and strength:

Financial: These are typically utilized when the measure is monetary.
Quantitative: These are for projects where the relevant metric is not financial but is something that can be quantified numerically.
Qualitative: A qualitative KPI is used when the relevant metric is not numerical in nature.
Process: A KPI evaluating the process employed in a project can be used when the priority is to assess efficiency.
Team performance: This type of KPI can be used to measure a team’s strength and its ability to execute.

KPIs measuring team performance would most likely be qualitative in nature. But a process or quantitative metric could also be used to evaluate teams — depending on the nature of the project, product, service or industry — since team and individual activities may involve the utilization of specific processes or quantifiable activities to accomplish goals.

Here are some steps that will help you identify the KPIs that are appropriate for your project.

Step 1: Consider compiling a team ‘to be’ list

When trying to determine KPIs to measure your project team’s performance, strength and overall synergy, think about your expectations and the factors that will determine success in relation to the specific project objectives and overall business objectives. It's important to know as precisely as possible what you’re looking for before you can decide how to accurately measure it. Essentially, you need to determine what you want the team to be. Here are some steps that will help you draw up your “to be” list:

Determine the specific characteristics, qualities and skills you’re looking for in individual team members.
Consider what a successful team would look like in terms of how people work together, interact and communicate, as well as the level of professionalism and commitment they exhibit.
Factor in how members are anticipated to interact and communicate with other stakeholders external to the team, such as front-line staff, management, vendors and clients.
Identify individual- and team-based factors you believe can positively or negatively impact project outcomes.
Determine exactly how you envision team members working with one another, and with other stakeholders, to accomplish project goals and overall business objectives.
Seek input from management, team members and stakeholders prior to solidifying KPIs. This can greatly aid in smoothing buy-in from all parties.

Compiling your “to be” list should help greatly in determining the KPIs that would most effectively and accurately measure team performance and strength. As mentioned above, regardless of the nature of the KPIs, remember that they must be not only clearly identified but also achievable and quantifiable in an appropriate form and within specified parameters.

Step 2: Zoom in on the important selection criteria

To further solidify and flesh out your requirements for your team and its members, consider the following 10 project management knowledge areas: scope, time, cost, quality, human resources, communication, risk, procurement and stakeholder management. Then try to identify exactly how your team will manage or respond to each of them. This will help ensure that you have taken a holistic view of the project and have considered all of the factors that could come into play before choosing the criteria that will determine your KPIs.

As part of this exercise, remember that team-based KPIs should attempt to capture least some of the following (as applicable):

Project and task dependencies and hand-offs among team members.
The level of team member independence and interdependence.
Demonstrated leadership abilities.
How team members assist one another with varying workloads when applicable.
How team members resolve conflict and support one another during difficult times.
Absenteeism and its impact on team workload and schedules.
The actual standards of work quality in relation to the requisite standards.
The level of participation and commitment to project work as evidenced by inputs and outputs.
The level of buy-in, attitude and interaction throughout a project.
How clearly and effectively team members communicate in various forms.
The ability to fulfill project deliverables and keep within the project scope.

Step 3: Determine which KPIs work as accurate measurements

In the book Performance Indicators (KPI): The 75 Measures Every Manager Needs to Know, Bernard Marr, a leading global authority on organizational performance and business, outlines 12 KPIs specific to measuring employee performance. Here are seven of those KPIs that, while employee-oriented, may be adapted to measure team performance.

Employee Satisfaction Index
Employee Engagement Level
Staff Advocacy Score
Employee Churn Rate
Absenteeism, as measured by the Bradford Factor
360-Degree Feedback Score
Training Return on Investment

Team-based KPIs enable businesses to measure project team performance to ensure that team members are optimally working together to achieve project objectives in ways that can be directly tied back to companywide goals and strategy. Remember, all KPIs must be appropriately identified, reachable and realistically measurable, as well as clearly communicated, documented and agreed upon.