KPIs for Success: An Overview of Project Manager Performance Metrics
Develop a high-performing team by empowering the project manager. A software project manager is the cornerstone in a product life cycle. Explore the six key KPIs that will inspire incredible results.
Develop a high-performing team by empowering the project manager. A software project manager is the cornerstone in a product life cycle. Explore the six key KPIs that will inspire incredible results.
Laurie turns ideas into results. She creates multi-million-dollar businesses in secure network and cloud service delivery.
Expertise
Previously At
How Do You Measure Project Manager Performance?
It is notoriously difficult to evaluate project managers’ performance because a lot of what they do is very qualitative and hard to measure. People tend to notice when there is a lack of project management—communication channels are weak, people are not sure what others are working on, unexpected problems create delays, etc. However, when a project manager is present and things are going smoothly, many of their colleagues would not be able to clearly pin down exactly what it is they do.
Another difficulty in assessing performance is that the profession of project management is in flux. With the advent of Agile, other roles like product owner and scrum master have been taking over some responsibilities that were traditionally carried out by project managers.
Additionally, in many companies and teams, the roles of a project manager and product manager are intertwined. In some cases, one of those takes on the responsibilities of both. It is helpful to think about the project manager as the COO of a product, who is responsible for how and when things are built, while the product manager is the CEO and is responsible for what and why gets built. The project manager owns the process, while the product manager owns the content. In this sense, the project manager should be evaluated for their efficiency in delivering a project.
With this backdrop, there are six key performance indicators (KPIs) that form the foundation for assessing the performance of a project manager:
- On-time delivery:
- Fixed time projects
- Agile projects
- On-budget
- Process improvements
- Relationships and communication
- Risk management
- Customer orientation
Understanding these project manager KPIs will be essential in gauging the success of project managers that you bring into your company or team, as well as providing a basis to provide feedback.
On-time Delivery
The project manager is responsible for managing the overall project plan. This includes coordinating the timely preparation of all of the deliverables and working to ensure that the budget is adequate for the plan.
Project managers in an Agile development team are going to be managing the communications of the teams to support the on-time goals of getting a product to market. While it’s understood that the Agile method is designed to be flexible in order to create the right solution for customers, unless trade-offs are properly managed, this can lead to scope creep, and then to delays. In this case, the scrum master, or an equivalent Agile coach, is responsible for the internal efficiency of the development team and the timely completion of sprints.
Delays can also appear from many points in the product release cycle, not just from the engineering and test organizations. It might be an executive decision to delay for tactical or strategic reasons. It could be that legal or the deal desk are not ready to handle bids and orders. It might be that there is an event that marketing would like to coordinate the release with.
A strong project manager will be constantly reviewing the plan against the actual progress to catch any inconsistencies.
On-time Delivery in Fixed-time Projects
In fixed time and scope projects, the project manager evaluation is pretty straightforward. Did the project manager succeed in delivering it within the initially agreed-upon timeframe? The simplest metric would be a binary yes or no. A more nuanced way to measure on-time delivery would be a tiered approach:
- Exceeded expectations: Completed faster than planned
- Good: Completed on-time
- Acceptable: Insignificantly late
- Poor: Significantly late
These tiers are especially useful when evaluating the performance of multiple projects. The tiers can be adjusted based on the circumstances of the company. For example, if projects are bound by a contractual agreement with the client and late delivery carries monetary penalties, then the evaluations for being late should be more severe. The same tiers can be used not just for the whole project timeframe, but also for shorter periods like milestones.
On-time Delivery in Agile Projects
Agile projects can also be fixed time, in which case the metrics from the previous section still hold. However, many companies now operate without a fixed schedule, prioritizing the delivery of real customer value over a strict development timetable. In these environments, sprint velocity can be a useful planning tool for development teams, but it is only one indicator of overall delivery performance. The project manager should be evaluated for setting release expectations, managing stakeholder communication, removing external obstacles, and keeping the overall delivery process on track.
Third-party delays can often affect the efficient delivery of the project team. These delays usually originate from dependencies that the team has. Examples of such delays include:
- Waiting for approval from stakeholders
- Waiting for developer operations to prepare the required environment
- Waiting for marketing to provide a copy for a public webpage
- Waiting for co-dependent feature teams to finish their part of the overall scope
A tiered evaluation approach is also necessary for flexible schedule Agile projects:
- Exceeded expectations: Third-party delays were virtually non-existent, and delivery remained efficient and predictable.
- Good: Most third-party dependencies were managed, delays were minimal, and delivery performance remained consistent.
- Acceptable: Third-party delays sometimes affected the delivery of the team.
- Poor: Third-party delays constantly and heavily affected the delivery of the team.
On-budget
Project managers may carry budget management responsibilities, identifying overruns as they occur to avoid surprises. For budget management, there are three key areas that must be monitored carefully:
- Resources (headcount and associated dollar budget)
- Development operations resources (DevOps)
- Network operations resources (NetOps)
Where margins are a critical corporate goal, managing the operational costs of goods (not including sales and marketing) forms a critical project management KPI. In the case of budget challenges, a strong project manager will look for additional opportunities to reduce costs in other areas. If there is no opportunity to recoup, then they should manage the escalation of the situation and, working with the product manager, seek approval for additional budget.
Same as the on-time criteria, budget management can also be a binary evaluation: did the project manager complete the project within budget? More nuance can be achieved by evaluating the size of the savings or overruns and budget planning efforts:
- Exceeded expectations: Project was completed with savings of 10% or more; budget milestones were planned and achieved.
- Good: Project was completed with 0-10% savings; budget milestones were planned and achieved.
- Acceptable: Project budget was exceeded by less than 10%; budget milestones were planned but not achieved.
- Poor: Project budget was exceeded by more than 10%; budget milestones were not achieved.
Process Improvements
Processes are internal agreements on how things are done inside the team or a company. Most employees don’t question processes and accept them as rules. The project manager, however, has a responsibility to constantly question the processes and seek improvements. This echoes back to the evaluation criteria in on-time delivery of Agile projects but goes beyond that. Process improvements can:
- Save time by eliminating unnecessary dependencies.
- Save money by automating processes and eliminating manual effort.
- Increase customer satisfaction by simplifying interactions and improving the customer experience.
As part of their responsibility for improving team efficiency, project managers should continually evaluate tools and technologies that can remove friction from the delivery process. For example, many project management platforms now incorporate AI-assisted capabilities such as automated status reporting and risk identification, reducing administrative effort and improving visibility across the project.
Unlike the time and budget evaluations, process improvements rarely have a binary outcome. It is important to include “effort” as an evaluation criterion because process improvements often include other parts of the company, which could be hard to change for the project manager. Effort signifies that no stone was left unturned and efficiency gains were maximized in the circumstances of the company. Moreover, prioritizing the most lucrative process improvement will result in the largest efficiency gains. With all of this in mind, a project manager can be evaluated for their process improvements in the following tiers:
- Exceeded expectations: Process improvements were constantly undertaken and provided valuable efficiency gains most of the time.
- Good: Process improvements were undertaken often and provided valuable efficiency gains a lot of the time.
- Acceptable: Process improvements were undertaken often but provided small efficiency gains.
- Poor: Barely any process improvements were undertaken.
Relationships and Communication
The project manager is the key interface with all of the teams involved in bringing a product to market. It is critical that those relationships reflect the project manager’s goal of delivering an excellent solution to fulfill their needs within the time that was announced. In hybrid and distributed organizations, this responsibility extends beyond meetings and personal relationships. Project managers must ensure that communication remains clear and well-documented, giving stakeholders visibility into project status regardless of location or time zone.
A strong project manager actively works to understand the needs and constraints of the teams they depend on throughout the delivery process. Conversations with those teams often revolve around questions such as:
- Can you do this with the talent you have?
- When can you deliver it?
- What can I do to help?
Talking with employees from other departments can provide valuable insight into the quality of relationships that the project manager has established. A more rigorous approach would be to have a 360-degree review of interpersonal and communication skills. The results can then be used to evaluate the project manager’s performance.
- Exceeded expectations: Engaged proactively across departments, maintained strong communication and documentation practices, and kept stakeholders aligned across locations and time zones.
- Good: Engaged with other departments proactively and maintained clear communication channels.
- Acceptable: Maintained working relationships with other departments, but engagement was primarily reactive rather than proactive.
- Poor: Rarely engaged with other departments or relied heavily on ad hoc communication.
Risk Management
Every project inevitably includes risks, which can be ignored or managed. While a poor project manager can be easily assessed after an uncontrolled risk has caused damage, it is harder to assess a good project manager because the risks are controlled and there is no damage to calculate and quantify the negative impact. Although project management platforms can help surface emerging risks through AI-assisted forecasting, a tool can only flag what the data reveals. Effective risk management also depends on the project manager’s ability to anticipate issues that don’t yet appear in a report and respond with sound judgment.
A way to assess a project manager is to probe their preparedness and the impact of their decisions. An effective project manager will craft a risk mitigation plan to decide which risks warrant attention and action.
- Exceeded expectations: Maintained a risk mitigation plan with clear actions and was able to clearly communicate their decisions.
- Good: Maintained a risk mitigation plan but the responses to risks were not well thought-through or realistic.
- Acceptable: Did not have a risk mitigation plan but had given some thought to it and was able to communicate at least some risks.
- Poor: Did not think about risks and managed them ad hoc when they arose.
Customer Orientation
A strong project manager will be constantly validating decisions against the customer’s perspective blended with the profitability goals of the business. They will represent the customer’s view in product decisions and explore how a customer might feel if one action is taken over a different action. In evaluating a project manager’s approach to their position, listen for the win-win attitude that balances customer goals with business goals.
For a comprehensive project manager assessment, create goals with the customer in mind. The project manager must work with the entire organization to anticipate potential slippages that will affect the customer’s relationship with the company. Some questions that a project manager might ask when working with the overall company team may include:
- Where are we against the committed timeframes?
- Are we ready to answer questions from prospects?
- Can we take an order?
- Do all the services work as described?
- Is support ready to answer questions?
- Are we ready to onboard new customers?
- How do customers upgrade?
A project manager can be evaluated for their customer orientation by using the following tiers:
- Exceeded expectations: Brought the customer perspective to all discussions and decisions and was able to balance it with business goals.
- Good: Brought the customer perspective to most discussions and decisions and was sometimes able to balance it with business goals.
- Acceptable: Brought the customer perspective to discussions and decisions more often than not but was not able to balance it with business goals.
- Poor: Rarely represented the customer and focused on business goals only.
Project Manager KPIs Support a Well-oiled Machine
Project managers must function as the water in a water slide, keeping everything moving as expected. It’s equally important for project managers, as with other roles, to plan performance evaluation with an agreed-upon set of performance metrics that can be reviewed at any point in time.
When considering how to measure their performance, consider the following KPIs for project management:
| On-time Delivery (Fixed Time Projects) | |
|---|---|
| Exceeded expectations | Completed faster than planned |
| Good | Completed on-time |
| Acceptable | Insignificantly late |
| Poor | Significantly late |
| On-time Delivery (Agile Projects) | |
| Exceeded expectations | Third-party delays were virtually non-existent, and delivery remained efficient and predictable |
| Good | Most third-party dependencies were managed, delays were minimal, and delivery performance remained consistent |
| Acceptable | Third-party delays sometimes affected the delivery of the team |
| Poor | Third-party delays constantly and heavily affected the delivery of the team |
| On-budget | |
| Exceeded expectations | Project completed with savings of 10% or more; budget milestones were planned and achieved |
| Good | Project completed with 0-10% savings; budget milestones were planned and achieved |
| Acceptable | Project budget was exceeded by less than 10%; budget milestones were planned but not achieved |
| Poor | Project budget was exceeded by more than 10%; budget milestones were not achieved |
| Process Improvements | |
| Exceeded expectations | Process improvements were constantly undertaken and provided valuable efficiency gains most of the time |
| Good | Process improvements were undertaken often and provided valuable efficiency gains a lot of the time |
| Acceptable | Process improvements were undertaken often but provided small efficiency gains |
| Poor | Barely any process improvements were undertaken |
| Relationships and Communication | |
| Exceeded expectations | Engaged proactively across departments, maintained strong communication and documentation practices, and kept stakeholders aligned across locations and time zones |
| Good | Engaged with other departments proactively and maintained clear communication channels |
| Acceptable | Maintained working relationships with other departments, but engagement was primarily reactive rather than proactive |
| Poor | Rarely engaged with other departments or relied heavily on ad hoc communication |
| Risk Management | |
| Exceeded expectations | Maintained a risk mitigation plan with clear actions and was able to clearly communicate their decisions |
| Good | Maintained a risk mitigation plan but the responses to risks were not well thought-through or realistic |
| Acceptable | Did not have a risk mitigation plan but had given some thought to it and was able to communicate at least some risks |
| Poor | Did not think about risks and managed them ad hoc when they arose |
| Customer Orientation | |
| Exceeded expectations | Brought the customer perspective to all discussions and decisions and was able to balance it with business goals |
| Good | Brought the customer perspective to most discussions and decisions and was sometimes able to balance it with business goals |
| Acceptable | Brought the customer perspective to discussions and decisions more often than not but was not able to balance it with business goals |
| Poor | Rarely represented the customer and focused on business goals only |
| KPI | Evaluation | Explanation |
|---|---|---|
| On-time Delivery (Fixed Time Projects) | Exceeded expectations | Completed faster than planned |
| Good | Completed on-time | |
| Acceptable | Insignificantly late | |
| Poor | Significantly late | |
| On-time Delivery (Agile Projects) | Exceeded expectations | Third-party delays were virtually non-existent, and delivery remained efficient and predictable |
| Good | Most third-party dependencies were managed, delays were minimal, and delivery performance remained consistent | |
| Acceptable | Third-party delays sometimes affected the delivery of the team | |
| Poor | Third-party delays constantly and heavily affected the delivery of the team | |
| On-budget | Exceeded expectations | Project completed with savings of 10% or more; budget milestones were planned and achieved |
| Good | Project completed with 0-10% savings; budget milestones were planned and achieved | |
| Acceptable | Project budget was exceeded by less than 10%; budget milestones were planned but not achieved | |
| Poor | Project budget was exceeded by more than 10%; budget milestones were not achieved | |
| Process Improvements | Exceeded expectations | Process improvements were constantly undertaken and provided valuable efficiency gains most of the time |
| Good | Process improvements were undertaken often and provided valuable efficiency gains a lot of the time | |
| Acceptable | Process improvements were undertaken often but provided small efficiency gains | |
| Poor | Barely any process improvements were undertaken | |
| Relationships and Communication | Exceeded expectations | Engaged proactively across departments, maintained strong communication and documentation practices, and kept stakeholders aligned across locations and time zones |
| Good | Engaged with other departments proactively and maintained clear communication channels | |
| Acceptable | Maintained working relationships with other departments, but engagement was primarily reactive rather than proactive | |
| Poor | Rarely engaged with other departments or relied heavily on ad hoc communication | |
| Risk Management | Exceeded expectations | Maintained a risk mitigation plan with clear actions and was able to clearly communicate their decisions |
| Good | Maintained a risk mitigation plan but the responses to risks were not well thought-through or realistic | |
| Acceptable | Did not have a risk mitigation plan but had given some thought to it and was able to communicate at least some risks | |
| Poor | Did not think about risks and managed them ad hoc when they arose | |
| Customer Orientation | Exceeded expectations | Brought the customer perspective to all discussions and decisions and was able to balance it with business goals |
| Good | Brought the customer perspective to most discussions and decisions and was sometimes able to balance it with business goals | |
| Acceptable | Brought the customer perspective to discussions and decisions more often than not but was not able to balance it with business goals | |
| Poor | Rarely represented the customer and focused on business goals only |
These project manager performance metrics are useful both for the project manager themselves or for someone supervising them. The first review sessions should be done to establish a benchmark and find the biggest gaps in the project manager’s work. Areas of improvement should be agreed upon for the next review in 3, 6, or 12 months, when the project manager’s performance metrics will be revisited.
This article went through a comprehensive list of potential KPIs that a project manager and their supervisor should consider. Not every team will prioritize these KPIs equally; however, it’s beneficial for all parties to be aware of these KPIs and to choose the most appropriate ones to continuously gauge performance.
Further Reading on the Toptal Blog:
Understanding the basics
KPIs in project management would explore six key areas, including on-time and on-budget delivery, process improvements, relationships and communications, risk management, and customer orientation.
Key performance indicators can include on-time delivery, resource availability, and customer escalations, along with more subjective metrics associated with overall team performance, culture, and communication styles.
In evaluating project manager performance, choose KPIs that explore an understanding of the progress and risks at any point in time. With a goal of on-time and on-budget delivery, a successful project manager will be on the lookout for ways to improve communications and processes.
Agile teams use a variety of KPIs to evaluate delivery performance, including delivery predictability, cycle time, throughput, lead time, and the consistent delivery of customer value. Together, these measures help assess whether work is progressing as expected and risks are being managed effectively.
Laurie Harvey
Port St. Lucie, FL, United States
Member since October 26, 2018
About the author
Laurie turns ideas into results. She creates multi-million-dollar businesses in secure network and cloud service delivery.
Expertise
PREVIOUSLY AT