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What Makes a Good Manager? 8 Manager Effectiveness Metrics to Know

What Makes a Good Manager? 8 Manager Effectiveness Metrics to Know

Editor’s note: The content of this post has been updated since its original publication.

What makes a good manager?

Go ahead, ask any leader that question. If the answer produces a description of a person who directs, constrains, and controls, then it’s likely an autopilot response.

Command-and-control managers are a lasting legacy from a time when employees followed linear, machine-like routines designed for optimal efficiency. 

The nature of work has evolved to become more fluid, and so too has the definition of a high-performing manager. In highly disruptive business environments, modern organizations employing knowledge workers need managers who can harness creativity, collaboration, and passion. 

And as we move into a post-pandemic transition phase, with all its attendant uncertainties about hybrid work models, tight labor markets, and employee well-being, it seems managers will need superhuman qualities to stay attuned to the needs of their teams while moving the business forward. 

Becoming an effective coach—it’s harder than it seems

At people-focused organizations, the hallmark of a good manager is someone who–instead of barking commands–can empower employees to develop their own problem-solving skills. 

“An effective manager-as-coach asks questions instead of providing answers, supports employees instead of judging them, and facilitates their development instead of dictating what has to be done,” stated organizational behavior experts Herminia Ibarra and Anne Scoular in this 2019 HBR post.

While the manager-as-coach is not an entirely new concept, it’s what businesses need to thrive at a time when organizations are moving towards a vision of delivering a shared purpose with their employees. Managers can no longer draw on the wisdom of experience to produce a ready-made answer for subordinates—what worked yesterday might not work today—and they must work with people to co-create desired outcomes.

When done well, this kind of non-directive coaching, listening, and questioning can energize teams and unleash innovation—but it’s not an easy skill to master: It’s a radical switch in mindset from merely ticking off the box to indicate that task A is complete. 

For some leaders, the additional pressures of coaching might prove to be too much:

According to a Gallup poll, managers reported being burned out more often than individual contributors in 2020, and this gap widened considerably in 2021—particularly for people managers. That’s why it’s important for organizations to determine which managers are thriving–and which managers need more support.

Eight must-have manager effectiveness metrics 

Great managers make work meaningful, create structure, build relationships, harness passion, and support employee growth in a way that helps the organization stay competitive through periods of disruption. 

These are all traits that can be measured with the right manager effectiveness metrics. Use these measures to determine who is performing well and where there is room for improvement:

#1. Promotions given

What Makes a Good Manager? 8 Manager Effectiveness Metrics to Know Promotion Rate

Why you need it:

To develop the capacity needed to respond to new market opportunities, organizations need manager-coaches who can help people grow and take on new challenges. For this purpose, look at your promotions given, which calculates the number of people who were promoted from a specific work group and gives a true picture of the manager’s ability to develop promotable staff.

How to get it:

  1. Choose a time frame.
  2. Identify all of the people who had a promotion within that timeframe.
  3. Allocate that promotion event to their location / work unit at the start of the time frame – (where they were promoted from, not where they were promoted to).
  4. Divide the number of promotions by the average headcount in the workgroup to create a rate.

Note: Modern careers are more like jungle gyms than ladders, which means that the right moves can also contribute to advancement over time. With this in mind, also consider lateral moves as a proxy for whether a manager is giving team members the opportunity to take on stretch assignments and learn new skills.

Red flags to act on:

Managers who consistently have a low or zero promotions given rate may be talent hogs. These people hold back team members to make sure their results get delivered, at the expense of the employee and the organization overall. A rate that is low compared to others, or zero, should be a reason to investigate further and clearly identify why this manager is not able to coach staff who can progress through the organization.

#2. Manager engagement score 

Why you need it:

A manager who drives people to hit objectives without consideration for the team’s general well-being will only make employee burnout problems worse. In contrast, manager-coaches who take the time to ask people about their needs (and then respond appropriately) can help people gain a sense of control over their work lives and promote employee well-being. 

How to get it:

Most engagement survey processes have a specific series of questions that look at how employees view their supervisor, and can be crafted to determine whether managers are acting as effective coaches. The most common way this score is generated by calculating the mean scores for a series of survey items related to the supervisor relationship.

Red flags to act on:

When a manager’s engagement score is significantly lower than similar work groups in the organization, this is an indication that the manager is falling short. It is also worth doing some investigation based solely on low engagement, as this may be the first sign that resignations and absences will follow.

#3. High performer turnover

What Makes a Good Manager? 8 Manager Effectiveness Metrics to Know High Performer

Why you need it:

Strong, capable managers who view employees as assets can help organizations weather the Great Resignation storm by encouraging high-performing employees to stay with the organization for longer. 

A general turnover metric — which also incorporates the turnover of poor performing employees — is too broad to support good quality decisions about management skills. Instead, examine the resignation rate of high performers to see if specific managers or work units are losing more high performers than others. 

How to get it:

  1. Choose a time frame (e.g. previous 12 months).
  2. Count all the high performing employees who resigned.
  3. Calculate the average headcount for high performing employees.
  4. Divide the number of high performers who resigned by the average high performer headcount.

Note: If your organization is experiencing a labor shortage, you might be concerned about retaining people who are solid performers too. In this case, you can also incorporate the turnover patterns of good performers in the analysis. 

Red flags to act on:

If the turnover rates for certain managers are substantially higher than other managers, this is an indication that all is not well in that work group. Although it would be too simplistic to assume the manager is the sole cause, it is an indicator that further investigation and insight is needed. 

#4. Employee experience

Why you need it:

In manufacturing work environments, a manager’s success can be measured based on concrete outputs like the number of units produced. This measure does not cut it in the domain of knowledge work, however, where the synergy between team activity and business outcomes can be more elusive. 

Surfacing the connection between creative, intellectual work, and business results is possible, however. Better managers produce more engaged employees who are better equipped to deliver on key outcomes, like better customer experiences

How to get it:

To better understand the connection between people and business results, consider using an analytics platform that pulls data from multiple sources to produce holistic insights based on employee and business data. That way, you can see how pulling different employee experience levers produces different results, such as better customer service.

Red flags to act on:

Consistent expressions of frustration within a particular work group via an employee experience platform could be a sign that the manager is constraining the team’s ability to better serve customers. If there is a possible link between these complaints and low NPS scores, it’s time to have a follow-up discussion with the manager about the findings. 

#5. Coaching equity

Why you need it: 

As the role of the manager becomes more coaching-oriented, organizations should also be aware of the potential for affinity bias, a kind of mental shortcut that causes people to favor others because they share similar characteristics. Men tend to hire men more often, for example, and women tend to hire women more often. You want to avoid a situation where a similar dynamic crops up in coaching relationships. 

How to get it:

This problem might be more prevalent within certain pockets of the organization than others, and people analytics can help employers determine where this kind of bias is creating a problem. Evaluate the time spent coaching for each report, and then break down the average time spent coaching based on attributes like gender and tenure.

Red flags to act on:

If a manager has lower engagement scores among people from underrepresented groups, it could be an indicator that the affinity bias is in play. Based on this insight, you can then start applying interventions where they are needed the most.

#6: Labor utilization variance

Why you need it:

Skilled manager-coaches who understand employee strengths and motivations are tremendous assets. They can evaluate interdependencies of tasks and skills and ensure they are lined up to deliver on the project objectives. The labor utilization variance will help you evaluate whether the manager was effective in how they deployed people.

How to get it:

  1. Identify the total person hours allocated to the mission
  2. Identify the person hours that have currently been delivered to the project
  3. Calculate the percentage variance between actual hours and allocated hours e.g. 110 actual hours vs 100 allocated hours = +10% variance.

Note: The same calculation can be run based on days if that is easier to track than hours.

Red flags to act on:

If you see that team members have to put in more hours than expected on a regular basis, it could be an indication that the mission manager is struggling to assign people the right tasks, or has difficulty planning complex projects.

 #7: On-target delivery

Why you need it:

Rather than establishing structures outside the flow of work, strong managers are evolving the practice as they go. This can create new challenges, however, particularly when projects have an undefined scope. The on-target delivery metric helps you evaluate how the manager is structuring work in the moment.

How to get it:

  1. Identify the scope and deadline for the current mission
  2. Identify volume of work complete and amount of time that has passed
  3. Calculate percentage completion by due date e.g. 80% complete on due date

Red flags to act on:

A common theme of project overruns indicates that a manager may be having difficulty getting team members to rally around a delivery date. Also, if you see that the team is not on target but that employees are working overtime, you need to drill further by having a conversation with the manager and the team members, as there are many factors that could be contributing to the problem.

You also need to consider the difficulty level of the project; some are more complex than others. If the different projects are rated by difficulty when the data is inputted into the project management system, your insight will be that much richer.

#8: Absence days per full-time equivalent (FTE)

What Makes a Good Manager? 8 Manager Effectiveness Metrics to Know Absence days

Why you need it:

Absenteeism is often a “sleeper” issue that, when monitored, can provide great insight into which managers are struggling as coaches. There is a level of absence which is “normal”  — everyone gets sick sometime. Monitoring this metric is about identifying patterns that do not fit with what is expected and understanding what is causing this abnormal behavior.

How to get it:

  1. Choose a time frame.
  2. Count the number of days absent during the time frame.
  3. Calculate the number of Full Time Equivalents working in each work group.
  4. Divide the number of days absent by the number of FTEs (this gives you a “normalized” or common score that can be compared across work groups).

Red flags to act on:

There are two clear indicators that the behavior of a work group is not effective and that further investigation is required. The first is a consistent level of absence above the average for similar work groups. Absence rates do increase with age, so you need to check if one group is substantially older than another. But in general, absence patterns should be consistent across groups doing similar work with similar demographic make ups.

The second red flag is an increase in absence. Month-to-month there are likely to be fluctuations, however, a steadily rising trend is an indicator of a work group that may be overworked or may be disengaged, looking to leave the organization. (The most common way to get time for an interview is to fake a day of sickness.)

Strong managers are more important than ever

As the health crisis eventually fades into the background, it’s clear that businesses aren’t picking up where they left off, but rather transitioning into a new normal that is entirely different from the reality of 2019. 

Work is more fluid than ever, with employees demanding more from their leaders. Managers who are inquisitive, empathetic, and guidance-oriented can meet the expectations of their teams and deliver on the business strategy. Following the new rules of management won’t come naturally to everyone, but with the right insight into manager effectiveness, employers can help leaders reach their full potential.

Interested in learning more? Continue reading: 

About the author: Ian Cook

Ian is an advocate for the crucial role that people play in helping companies thrive. His career has focused on enabling people, teams and companies to perform at their best. For the last 15 years Ian has been helping leaders elevate their HR strategies and programs through the effective use of people analytics. At Visier, Ian led the development of our market leading solution and is now focused on the overall strategy for the people analytics business.

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