The ultimate purpose for creating teams or work groups is to enhance productivity and improve business results. Teams are built, more or less, on the idea that two heads are better than one. How true is this maxim with regard to your teams? You will only find out when you measure team effectiveness.
Having formed a team for short- or long-term goals, you ought to carry out a periodic evaluation — or performance appraisal — to measure the effectiveness of such teams.
In this article, we'll take a deep dive into the concept of team effectiveness, the benefits of measuring team effectiveness, how to measure team effectiveness, and tips to improve team effectiveness.
What Is Team Effectiveness?
Team effectiveness is a concept that explains the degree to which a team meets objectives, goals, and deliverables of an assigned task or project.
Like it is with cause-and-effect situations, team effectiveness is made possible by effective teamwork; a situation where every team member plays their role — contributes their skill and other required input — in the effort to achieve a set goal.
Benefits of Measuring Team Effectiveness
Having some systems in place for measuring team performance and effectiveness from time to time is necessary for the following reasons:
- It improves resource management. Do you want to get more done or get the most out of scarce resources? Then measuring team effectiveness is very vital. It will help you measure how well your teams are utilizing resources. In a situation where a team is using up more resources with little output, you can quickly intervene and salvage the situation.
- It improves productivity. If you are looking to improve productivity in your business — who isn't? — then you will want to measure the effectiveness of your teams. Successful managers understand the relationship between measuring team effectiveness and improving productivity — whatever that means to you and your business. From a logical perspective, checking team effectiveness routinely will help you know which areas your teams are performing well or lacking. This will help you know how to improve productivity and in decision making generally.
5 Ways to Measure Team Effectiveness
There are two broad ways you really can go about measuring team-related performance: at the individual level and at the team level.
The individual level of measurement covers how individuals behave in team situations and individual employee contribution to team results.
On the other hand, team-level performance measurement focuses on the team's systems and processes or final results.
However, for better understanding, we can further break down these two levels of measurement into the following actionable steps:
- Establish metrics for measuring team effectiveness: Metrics are also known as KPIs — Key Performance Indicators. They are like targets against which overall long-term performance can be measured.
- Measure productivity and efficiency: In a case where goals are quantifiable, it is very possible to measure productivity. A good example is if the target is for a team to sell 100 products within a week, then productivity would be measured by how many products were sold out of the 100. On the other hand, efficiency can be measured against the period within which each team sold their products and the cost of selling each product.
- Measure client satisfaction: If customer satisfaction is your priority as a business owner, then it ought to be the same for your employee, especially your customer service team. If your customers are not satisfied, then your team may not be as effective as it should be. One way to find out if your customer service team is effective is to ask your customers — a phone conversation or a survey should work — what their experience was like with your customer service reps. Other questions you may ask them can be about the quality of your product or service and how likely they are to recommend you to their friends and family.
- Monitor employee attendance: This is an individual approach to measuring team effectiveness. The logic behind this measurement approach is that when an employee is frequently absent in team situations, it will greatly affect the overall efficiency of the team. One of the impacts of absenteeism on team effectiveness is that some team members will be overworked. Also, the lack of input from this employee may significantly impact the result the team generates.
- Measure employee turnover: The rate at which employees leave your business is one way to measure team effectiveness. No doubt, employees leave a company for many reasons besides team effectiveness; however, when employees feel connected to one another and feel like they are a part of something bigger than themselves — as it is in an effective team situation — they are more likely to stay longer.
- How to calculate employee turnover rate within a period: Divide the number of employees at the start of the period by the number of those who have left within the same period, then multiply the result by 100. To further nail down whether team effectiveness is one of the causes of employee turnover in your organization, you can conduct a survey —where it's possible — to know the reasons why these employees left or are leaving.
- Set SMART goals: Team effectiveness can be greatly enhanced when project goals are clear and ideal. The SMART acronym for goal setting can come in very handy here.
- Define and communicate roles and responsibilities clearly: Having set clear goals, the next step is to ensure that every member of the team understands their roles and responsibilities in achieving the agreed-upon goal. That way, each employee has a sense of responsibility to play their part in accomplishing the main goal.
- Create an accountability system: Having an accountability system means creating a chain of order. Team members must be made accountable to team leaders and the leaders made accountable to someone in a higher rank in management. That way, everyone answers to a superior.
- Encourage diversity: Teams perform better when members are strategically selected with consideration of each individual's strengths and weaknesses. The goal is to ensure that team members complement each other.
- Meet often with project managers and members: Meeting regularly with project managers and individual team members creates a feedback loop and makes evolution possible. During these meetings, get feedback about the challenges and individual performance of members. Consequently, data obtained can be used to adjust a team, provide necessary resources, and make other decisions that might enhance the team's chances of meeting goals.
- Invest in employee development: The better your employee gets, the better their effectiveness both as an individual and in team situations. Moreover, the world is fast-changing and there will always be new innovations; to catch up with competition, you should consider investing in upskilling or reskilling (i.e., learning advanced or new ways of doing things) your employees. This will surely require financing and time; however, it has huge payoffs — just as the word investment suggests. Employee development is a very strategic effort to improve individual or team performance.
6 Tips to Improving Team Effectiveness
Here are six ways to improve team effectiveness:
As long as you run a business and occasionally do have to assign teams to specific tasks, then you will always need to measure and invest in improving team effectiveness.
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Notice to the Reader
The content within this article is meant to be used as general guidelines and may not apply to your specific situation. Always consult with a professional accountant to ensure that you're meeting accounting standards.