Is your team struggling to hit key performance indicators (KPI)? As a project manager, missing out on your KPIs could mean that you might not be applying the things you learned during your PMP exam prep and training; or, your methods need room for improvement. If you want to become a project manager that is both effective and efficient, you might want to check out this list of quality metrics for project management today to set your company up for success.
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Productivity takes a look at whether you’re getting your money’s worth from your team. So, how exactly can someone measure productivity? You can take a look at the number of tasks done compared to the work hours or the profit versus salary.
Better yet, look beyond direct labor. Ideally, project managers can measure this by the relationship of input and output. In essence, you should be getting more for less.
Here’s a simple formula you can use to measure productivity:
Productivity = unit of outputs/unit of inputs
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Planned Value (PV)
PV is the estimated costs of the tasks to be completed in a given time. This KPI helps project managers, team members, and clients (in some cases) see if a task will finish ahead of time, on time, or be delayed.
There are two ways to compute the PV:
- PV = hours left x hourly rate of team member
- PV = percentage of the task to be completed x project budget
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Actual Cost (AC)
Also known as the Actual Cost of Work Performed (ACWP), AC shows how much money from the budget has been spent on the project to date. Hence staying on top of your AC means staying within budget. If things fall behind, you can help your team adjust accordingly so the work doesn’t exceed the budget threshold.
Even if you’ve taken the PMP certification training, you’ll find out that there’s no special formula in calculating the AC. Instead, you simply add up all the expenses you’ve had so far, including salaries, resources, etc.
Earned Value (EV)
In its simplest definition, EV shows you how much money you’ve earned on the project. It’s an important KPI because it tells you how much you’ve earned from the money you’ve spent to date. EV, also known as Budgeted Cost of Work Performance (BCWP), can be calculated using this formula:
- EV = percent of completed work x budget at completion
Cost Variance (CV)
CV helps project managers track the project’s finances as it progresses. In an ideal CV, the PV matches the AC, which is almost impossible to achieve. It can, however, be negative or positive, depending on how well you track the CV.
Cost Performance Index (CPI)
To those who have taken the PMP certification training online, you’ve probably read excerpts on this from the Project Management Body of Knowledge (PMBOK) guide. CPI is a metric that can help you measure the efficiency of expenses spent on a project. You can compute this using this formula:
- EV / AC = CPI
If the result is higher than one, then the CPI is favorable. A value lower than one, on the other hand, shows that the conditions of cost-efficiency for the project are less than favorable.
Scheduled Variance (SV)
SV is an indicator of whether the project is ahead or behind schedule. It’s an important factor used in Earned Value Management (EVM). You can compute for this using:
- AC – PV = SV
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Schedule Performance Index (SPI)
SPI measures how close the team is to project completion against the schedule. SPI helps project managers see if the tasks are being completed on time or not. To calculate the SPI:
- EV / PV = SPI
If the value is less than one, it means that your project is potentially behind schedule. On the other hand, a value higher than one means your team is ahead.
Return on Investment (ROI)
ROI is the rate of return for investment in a given time. You could also consider this as the payback period. It generally shows if the benefits of the project exceed its costs. There’s no one formula for computing the ROI, but it can be derived from other KPIs such as AC and EV.
Gross Profit Margin (Margin)
The margin is the best KPI that indicates how well a business is doing. It shows how much has been earned for each dollar/peso that has been subtracted. The higher the margin, the better the company is doing, in terms of performance. Compute the margin with the formula below:
- Gross Profit Margin = (Total Profit-Total Costs)/100
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Resource Utilization (RU)
Resource utilization is a project performance measurement and evaluation that helps project managers see which team members work efficiently. This KPI shows how much time each team member spends on various billable and non-billable tasks. One way to compute this is:
- Team member work hours / Total no. of work hours = RU
Lower scores could mean that your team is overstaffed or that there could be an issue somewhere. Meanwhile, having a higher score doesn’t automatically mean that your team has been working efficiently. It could also mean that you’re understaffed. With the best PMP certification training, project managers could determine the perfect balance of resource utilization for their project.
How good is the quality/service of your product/business? One way to find out is through KPI customer satisfaction. According to the Center of Business Practices, the higher the score out of 100, the better. Any company can customize/develop the surveys with scores to reflect which variable has more importance. Here’s how you can compute the Customer Satisfaction Index:
- (Total Survey Point Score/Total Questions) x 100 = Customer Satisfaction Score
Employee Satisfaction Score
Employee morale greatly affects performance. The employee satisfaction score is a survey that you can use to measure their satisfaction level in certain aspects of their work life. You can use the Gallup employee engagement survey to check their status and use this employee satisfaction index to help you process the results. This formula will help you grade how satisfied they are:
- (Total Survey Point Score/Total Questions) x 100 = Employment satisfaction score
Aside from getting the best PMP online training available, there are many more metrics you can use to measure your team’s performance. These project success metrics examples, however, are most vital to help your team perform better.