Data and analytics is a thriving field at the moment. Everyone from technicians to marketers to HR reps compiles data hand over fist and then analyzes it to glean key insights. These takeaways can apply to a company, a department, and even a specific product, campaign, or individual.

One recent area where data proficiency is growing is organizational performance. Here are a few thoughts on how the growing power of performance analytics can help both teams and the people on them flourish.

What Is Performance Analytics?

Before considering its benefits, it’s important to state a clear definition of what performance analytics is. It’s easy to grasp what analytics is in most cases. Sales performance is measured in dollar signs, average orders, and quotas. SEO performance tracks things like site traffic, keyword ranking, and dwell time.

But performance? How do you statistically analyze the performance of a team or individual?

Michael Mueller, head of Performance Science and Growth at the performance analytics company Two Story, defines this important term as an analytics discipline “used to analyze a company’s key performance indicators (KPIs) to learn what drives them – and provide practical recommendations to improve the performance of the business.”

Mueller adds that the ongoing merging of behavioral science with artificial intelligence is accelerating performance analytics. It is providing more powerful analysis and deeper insights.
At its best, performance analytics promote focus and help employees devote their time and energy to business initiatives that drive impact. This, in turn, benefits both the employees and the organization. 

Performance Analytics Takes on Different Forms

As a quick note, it’s important to remember that performance analytics can take on multiple forms and serve various functions. For example, descriptive analytics aggregates existing data to measure past performance.

Diagnostic analytics looks for themes over time and causes for performance issues. Predictive data analytics and prescriptive analytics look forward. They anticipate events and develop potential solutions, respectively.

This diversity in application makes performance analytics a multi-faceted tool with a wide variety of benefits.

The Benefits of Performance Analytics for Individuals

Let’s start by considering how performance analytics can have a positive impact on individual employees and leaders.

Diagnosing Shortcomings
Genuine growth comes from confronting and overcoming failures in performance. However, it’s difficult to improve when an individual does not understand where they are coming up short. 

Performance analytics provides a detailed, data-driven window into a person’s professional activity. When a performance analytics tool is deeply integrated with behavioral science, this enhances the takeaways. They can learn not just where they are coming up short but how their mindset and cognitive habits are influencing their performance.

Prescribing Constructive Solutions
Diagnosis is helpful only as a starting point. If a person is going to improve — and eventually flourish — they must discover how to change their behaviors.

Prescriptive analytics gives them the tools to do just that. It empowers a person to see how they can adjust their behavior to help them meet whatever KPIs they are failing to achieve. 

This counteracts the negative association with diagnosis. It supplements it with a hopeful, precise formula for adaptation and improvement.

Empowering Leaders to Coach Better
The previous two benefits are largely geared toward individual improvement. This inward manifestation of performance analytics enables individuals to see their own faults and shortcomings and then make appropriate changes.

However, there is also an outward-facing use of performance analytics on an individual level. It makes leaders better coaches. When a manager, boss, or executive faces a statistical shortcoming with an employee, they must come up with a solution. 

Traditionally, their choices have been going with their own hunches or simply firing and rehiring. Performance analytics tools give them the ability to make precise recommendations for improvement. Furthermore, it enables them to continue monitoring performance to see if change is occurring.

The Benefits of Performance Analytics for Teams

Performance analytics has a clear positive impact on individuals. But the ripple effect of behavioral science-backed, AI-infused performance analytics goes further. It can also elevate an entire team’s productivity and efficiency.

Hiring With Purpose
Performance analytics can have an immediate impact on a team through its hiring process. Talent discovery and recruitment are challenging activities. Candidate selection is also something that is often left up to human intuition and “gut instinct.”

Performance analytics infuses the hiring process with purpose. Diagnostic analytics, for example, measures the effectiveness of existing activity — both positive and negative — against current KPIs. Prescriptive analytics provides detailed recommendations on how to propagate the good and eliminate the bad through who you hire.

When behavioral science is included in your performance analytics software, it takes this a step further. It introduces psychometrics (mental processes, knowledge, attitude, capacities) into the picture. This helps you assess and quantify the good and bad cognitive behaviors that impact team performance.

Keeping Teams Lean
Another recruitment aspect of performance analytics is the ability to maintain lean teams. By analyzing performance, you keep your finger on the pulse of what is working and what isn’t.

This enables team leaders to address knowledge and skill gaps that are necessary for their team to function. At the same time, it provides boundaries that make it easier to identify unnecessary hires that could drain resources.

Staying on Track
When a team uses a performance analytics tool over time, it helps them maintain momentum toward their goals. As they consistently revisit KPIs and measure progress toward objectives, it makes it possible to make minor tweaks and adjustments before they lead to larger problems.

This could be a sales team improving a low average order value. It could help an SEO agency identify an underperforming website or keyword faster. Whatever the situation, regular attention to progress (or lack thereof) helps a team succeed with minimal disruption or wasted resources over time.

Using Performance Analytics to Flourish

Performance analytics is a powerful way to gauge your current productivity and efficiency and map out the path to future success. It identifies current shortcomings as well as what is working and makes it possible to expand on the good and fix the bad.

In addition, performance analytics can have an impact on an individual and a team level. It enables employees, leaders, their teams, and even their businesses as a whole to thrive.