How to Evaluate Manager Performance: 10 Metrics to Gauge Leadership Success

Do you still need convincing for your managers' vital role in the cogs of business?

36% of people name their manager their go-to person at work if they're stressed or overwhelmed, according to TalentLMS research. 

Great managers will bring the best out of their employees, supporting them in their roles and consistently contributing to their career growth. 

But a toxic manager has the potential to have your best talent calling in sick or running into the open arms of your competitors. 

So, how can we evaluate manager performance to ensure our leaders do a decent job and look after their respective teams? 

This guide explains how to measure the effectiveness of your manager, including the exact metrics to track.

💼 What is a manager appraisal?

A manager appraisal is a process that businesses use to measure the effectiveness of their managers. The aim is to identify whether they successfully carry out their duties and responsibilities. 

Do you want to fill your company's management with high-performing managers who motivate and inspire their teams? 

No? Then this guide isn't for you! 

But if you answered yes, use the appraisal process to ensure your managers are equipped with the necessary skills and resources to be innovative and succeed in their roles. 

🏆 What are the benefits of carrying out a manager appraisal?

Gallup finds that managers are responsible for at least 70% of the variance in employee engagement scores across business units. So, it follows that conducting frequent manager appraisals will: 

1. Identify any areas where managers need improvement. 
2. Measure whether managers are adequately supporting their direct reports. 
3. Pinpoint the specific training or development needs that managers may have.
4. Boost employee morale, engagement, and productivity. 
5. Build a nourishing environment for managers and their teams to thrive in.

➡️ Strong leadership is just one of the nine characteristics of high-performance teams. Discover the other eight high-performance drivers of success.

⚖️ 9 Leadership performance evaluation techniques 

There's no cookie-cutter solution to assessing leadership performance. 

Each business is different. So your chosen manager evaluation method will depend on the specific goals and objectives you have for your business and your available resources. 

Example: The performance appraisal for a small business project manager will probably be entirely different from a regional manager of a multinational corporation, reporting to a board of directors. The assessment methods should reflect the varying responsibilities, geographical areas, and numbers of staff managed. 

Here are nine ways you can assess leadership performance in your organization.

1. Continuous performance enablement discussions

Ongoing performance conversations between managers and direct reports are a great way to ensure that both meet expectations. Ensure that your leaders commit to appraisal interviews and actively listen to feedback from their direct reports before acting on it.

But managers are often direct reports, too! 

Managers can benefit from continuous feedback from their peers or executive leaders to ensure ongoing performance enablement. 

Tip: Schedule regular catch-ups with other managers in your organization, and encourage open and honest discussions.

2. L&D metrics

Set specific L&D metrics for your managers, and track their progress over time. 

You could include the number of training courses they have completed or the number of employees they have successfully developed and promoted.

If you use an LMS, use in-built insights to track how much course content your managers consume and how regularly. 

But measuring these aspects isn't about playing the blame game if their completion stats are low. 

Instead, use these stats to reveal how well your managers engage with L&D resources and understand if you must provide more training time. 

3. Team outcomes 

A team is only as good as the manager leading them, so it makes perfect sense to track team outcomes as a barometer of leadership success. 

Here are some specific metrics you could track:

• team productivity;
• customer satisfaction levels;
• employee engagement scores.

➡️ Check out our guide to using Employee Net Promoter Scores to calculate company engagement. 

4. Team health checks 

Team members aren't just employees. They're human beings with families, friends, and hobbies and come from various cultural backgrounds. 

Plus, they have lives outside of work, and sometimes their experiences can spill into the workplace, impacting their mental health, engagement, and productivity. 

Great managers will provide a space of psychological safety for employees, where they can bring their whole selves to work without fear of judgment or reprisal.

HBR describes how a company offered support to an employee who was the victim of a hate crime. It explains that managers must consistently model vulnerability and follow these three steps to achieve psychological safety:

1. Develop trust. 
2. Provide transparency. 
3. Use inclusive decision-making. 

Regular check-ins with a manager's team are another option and can be quite revealing!

Tip: Encourage employees to be honest and open with their feedback, and use it to inform how you assess one of your manager's performance. 

You might ask questions like: 

• What is the team culture like? 
• Do team members trust each other? 
• How does the manager handle team conflict? 

5. Retention and engagement rates

High turnover and low engagement levels can signal that something is wrong within a team. 

A Visier study found that 43% of employees have left a job at some point in their career due to a bad manager. 

Additionally, 53% of people considering a job change are doing so because of their manager. 

Track retention and engagement rates for the teams your managers are responsible for and investigate any spikes or dips. 

A spanner in the works: sometimes, retention rates may be outside a specific manager's control. 

Suppose their team consists of people working in industry in-demand roles, and your company needs to offer more compensation or L&D opportunities. In that case, this may be something other than a managerial performance evaluation problem. 

6. Conventional performance appraisal

The traditional performance appraisal process is a one-way feedback loop where a more senior manager shares feedback about their reporting manager's performance during the past cycle. 

During this look back, they'll provide two different types of feedback: 

• Reinforcement feedback (positive feedback) where the reviewer will provide examples of brilliant managerial work they've seen. 
• Redirecting feedback (negative or constructive feedback) with instances where another strategy may have been better. 

The appraisal also involves setting future objectives with the manager before assessing their progress regularly.

7. Assessment center review 

An assessment center review is a more formal way of evaluating leadership performance. It involves bringing in a panel of experts to assess the manager's performance against predetermined criteria. 

This evaluation method could involve role-playing exercises, simulations, or interviews with the manager's direct reports.

8. Competency-based review 

If your company uses a competency framework and has outlined the required competencies needed for a leadership position, it'll be a cinch to complete your manager review based on these. 

Some examples of competencies you might track include: 

• supervisory skills;
• planning skills;
• soft skills (including communication and interpersonal skills);
• delegation;
• training and coaching;
• quality control;
• diversity;
• process improvement. 

Tip: Tie OKRs to these competencies to better understand how your manager fares at each of them. 

9. 360-degree review 

A 360-degree review assesses a manager's performance from all angles. 

This form of performance review involves collecting: 

• upward feedback from their direct reports; 
• peers' evaluations; 
• feedback from superiors;
• self-reviews;
• and even feedback from customers. 

Access to insights from multiple raters gives you a well-rounded view of their managerial skill set.

🔍 Wondering about the difference between 360 feedback and a traditional performance appraisal? Our handy guide breaks it down.

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💡 7 Steps to manager performance success

We're big believers that every organization should customize its manager appraisal system to suit its unique business. 

However, there are some typical steps you can take to perfect yours. 

Ensure confidentiality 

Peer reviews are only helpful if people feel free to speak their minds without fear of retribution. Anonymity is key to ensuring people feel safe to give honest feedback, so avoid using individual names in reports. And provide clarity to feedback-givers about how secure and untraceable your system is. 

Create clear performance indicators 

Build a manager performance framework that provides all the information your leaders need to understand how you'll measure their performance. 

This framework should be accessible and transparent so there's no confusion about expectations.  

Tying performance indicators to company objectives ensures that: 

• Your manager appraisal system aligns with your business goals.  
• You can give relevant and actionable feedback that will only progress leadership development. 

Tip: You might focus on core competencies, productivity levels, industry knowledge, management style, or communication skills. 

Tailor the review to the specific manager 

No two managers are alike, so avoid using an out-of-the-box approach to appraisals. 

Tip: When creating your performance indicators, consider each leader's strengths and weaknesses, role, and how long they've worked in that specific role. 

All of these factors will help you to identify professional development areas and set objectives that are specific to them.

Hold a 360 performance review 

360-degree performance reviews are straightforward to implement if you use a tool like Zavvy to encourage an open feedback culture. 

The process is highly customizable so that you might handpick the feedback-givers, including a mix of direct reports, fellow managers, and exec leaders. Alternatively, ask the manager for a list of nominees who they feel are qualified to offer feedback about their work. 

➡️ Struggling to choose 360 feedback questions for your leadership review? Check out 44 sample questions.

Provide tangible examples 

Provide positive and negative performance examples to make your feedback as helpful as possible. 

Don't say:  

• "You're great at this."
• "You've done a solid job this performance cycle." 
• "Your contribution was on track as usual." 

Instead, explore when and how they demonstrated a specific strength. 

For example, were they able to handle a difficult customer situation tactfully? 

Did they manage to increase productivity levels on their team? 

The same goes for negative feedback.

Don't say: 

• "Your team isn't happy with you." 
• "You need to work on your communication style." 
• "I've been getting reports that you're not meeting deadlines." 

Instead, explore when and how the issue arose. 

For example, did the manager handle a team conflict in an unproductive way? Are they regularly missing deadlines? 

This sort of feedback is actionable and provides context for leaders to understand where they need to focus their development.  

Proactively gather feedback and provide regular check-ins 

There's no need for managers to wait until their next appraisal meeting to learn more about how they impact those around them. Ultimately, the goal is to hold regular check-ins with team members and colleagues in adjacent departments to enable a culture of continuous growth and enablement. Regular feedback will provide rich insights that allow managers to develop organically rather than under duress. 

Nick Lafferty, Head of Growth Marketing at Loom, explains how he also likes to provide unsolicited performance-related feedback to team members who've impressed him. 

"Most performance cycles revolve around solicited feedback. That's great, but I'm not always nominated to review folks I've worked closely with. There were two people specifically that I felt compelled to provide feedback for. I have extremely high opinions of these people, and I want to make sure that's communicated to them and to their managers. 

Here are some ways to frame the feedback: 

1. This is your unique ability that you should double down on.
2. You're great at these things. 
3. When we worked on X project together, you did Y, and it was helpful because Z. 

Ideally, this should be happening outside of performance cycles too, but now is as good a time as ever to start."

Act on feedback 

Collecting feedback and failing to act on it is a missed opportunity to improve managerial performance. 

Go through the feedback comments and examples with your reviewee manager and determine how they relate to your leadership competency framework. 

Use this to link to objectives in the manager's career development plan.

🆘 Learn how to give constructive feedback to executives effectively. We've also included nine Examples of feedback for executives.

📏 10 Effective manager performance metrics 

Data is your friend when it comes to evaluating manager performance. When you have hard numbers to illustrate your point, it's easier to convey your message. 

Here are ten manager performance metrics that you can use to evaluate your leadership team. 

1. Engagement score 

An engagement score is a metric used to measure employees' engagement with their work. 

There are several different ways to calculate an engagement score. 

Still, the most common method is to survey employees and ask them about their job satisfaction, commitment to the company, and likelihood of leaving. 

2. On-target delivery 

The on-target delivery rate measures how often a manager meets their deadlines.

Calculate this metric by taking the number of times a manager has met their deadlines divided by the total number of opportunities they had to do so.

3. Promotions rate 

Look at the makeup of the manager's team and evaluate how well each employee is progressing in their career. 

Little movement may seem positive from a retention point of view. But it can also be a red flag that team members must develop faster to move into other internal roles or achieve promotion to a senior position. 

4. Innovation tracking 

Innovation is key to company success, so a manager must be able to keep up with industry trends and adjust accordingly. 

Track metrics related to creativity and innovation, including: 

• number of new ideas generated;
• implementation of new ideas;
• ROI of new ideas;
• the number of active projects. 

5. Labor utilization variance

This metric measures how well a manager is using their time and skills. 

Here's a handy formula to crunch those numbers: 

(Actual hours - Standard hours) x Standard rate = Labor efficiency variance

Track this metric over time. If the variance is unfavorable, labor utilization has decreased, while a favorable variance means it's increased. 

Labor utilization variance is another example of a metric you can track at both a manager level and the manager's team.

6. High performer resignation rate 

A high performer is an employee who meets or exceeds expectations. Measure this using various methods, including performance reviews, 360-degree feedback, and engagement scores. 

Once you've identified your high performers, track how often they resign. A high turnover rate among this group can signal that something is wrong with the manager. 

7. IT capabilities 

Technology is at the forefront of future-facing companies, and managers must invest in developing their technical competencies to keep up. 

Here are some key IT capabilities that you should measure: 

• digital literacy;
• ability to use technology to drive business results;
• ongoing technical skills development;
• project management software usage. 

8. Health and safety commitment 

Health and safety is never the most exciting topic. Still, effective managers must commit to keeping their team members safe and be willing to develop strategic plans for safety improvement. 

Here are a few essential health and safety metrics you can track: 

• the number of accidents and near-misses;
• training completion rates;
• safety compliance audits;
• first aid training certification;
• leadership skills development.

9. Absence days 

The number of days an employee is absent from work can link to their relationship with their manager. 

If absences are high, it could be a sign that the manager needs to support their team better or address issues as they arise. 

Equally, if the manager's personal attendance stats are low, this could be a sign they're not committed to their role or that they require support. 

10. Mentoring 

A good manager should be committed to the development of their team members and be willing to invest time in mentoring them. Track how often the manager provides mentorship outside of their day-to-day managerial role, including: 

• the number of hours spent mentoring;
• the number of employees they mentor;
• the number of mentees who have moved into new positions following the program. 

🚨A word of warning: It's important to remember that no single metric can give you a complete picture of a manager's performance. 

💡 Take the data and use it as a starting point for human analysis. Then, if the figures seem out of whack, sit down with the specific manager and have a conversation. 

➡️ Enable high-performance leaders and teams with Zavvy

Leaders are pillars for high-performance teams and organizations and deserve investment. 

360-degree reviews are a starting point to benchmark a manager's performance and impact on their team. But don't fall into the trap of measuring performance without following up! Your feedback data is a goldmine of insights from which you can grow your managers and turn them into the leaders of tomorrow. 

Zavvy provides a suite of leadership development solutions, including: 

• 🔁 360 feedback software
• 💼 Manager training programs
• 🚀 Leadership journey templates

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To learn more about our tools, request a free product demo today.