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Construction Estimator Performance Metrics: How to Evaluate Your Team’s Performance

 

Team performance is crucial to a successful preconstruction process – from takeoffs to bid decisions to estimates and proposals, your estimating team must be on top of their game to ensure your company wins profitable work. But exactly how do you define success and measure performance? Try these strategies.

How to Define Metrics for Your Construction Estimating Team

In order to define metrics, you need a clear picture of your team’s roles and day-to-day responsibilities. Start by examining job descriptions and talking to your team to compare how closely their actual roles correspond to what they were hired to do. Too many discrepancies here will require some reevaluation of staffing, potentially including adding new hires or bringing on new technology to offload some of the more administrative tasks.

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Once the role is clear, it’s time to decide how to measure success. Begin with the bigger picture: what determines success for the business as a whole? Is it:

  –  Increased profit?

  –  Higher-revenue projects?

  –  More jobs completed?

  –  Reduced costs and waste?

  –  Improved ratio of budgeted to actual cost?

Of course, you want all of these things to be reality, but narrow it down to the current highest priority operational metrics and goals for growth. Then, these types of considerations will funnel down to key performance indicators for your estimating team.

Estimating Team KPIs

Depending on your organizational goals, estimator KPIs will look different. If you are primarily focused on going after bigger, more complex jobs, metrics might include increased revenue of jobs won over last year at the expense of higher profits, lower costs, and number of bids submitted.

On the other hand, if you just need to win more jobs at this time, estimator performance might be measured on increasing the number of bids submitted and won, without tracking revenue or profits for those jobs.

Importance of Defining Attainable Metrics for Your Construction Estimation Team

When creating goals for your estimating team, you want to be ambitious, but it’s essential to set KPIs that your team can meet. Consistently unattainable goals lead to poor employee morale and cause your team to lose confidence and motivation. To determine reachable KPIs, you can first track your team’s progress to see what they accomplish in a given timeframe before beginning to tie compensation and benefits to those accomplishments.

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Using Seasonality and Historical Data for Goal Setting

What is an easily attainable KPI in one season is an impossible goal in another, so be sure you’re factoring in seasonality and the way your company and team has performed in the past. If your busy bidding season is in the fall, for example, by looking at number and types of bids submitted in Q4 of last year, you can get an idea of what to expect for the upcoming year. But don’t use that same high goal for the slower spring and summer months when the team is busy managing projects and fewer jobs are out for bid.

How to Use Stretch Goals

In addition to ordinary KPIs, some organizations have employed stretch goals, which can be a positive or negative strategy depending on the state of your organization and employee morale. Stretch goals are those that are outside the normal realm of attainability but that could be reached if the team pulls together and puts forth exceptional energy.

According to Harvard Business Review, stretch goals are not worth pursuing if your company is rebounding from a loss or struggling. In this case, employees are likely to see the stretch goal as threatening rather than motivating. But if your company is thriving and in growth mode, with a strong availability of resources, stretch goals could produce extreme, positive results.

Stretch goals for your estimating team could be department-wide, such as increasing the total number of bids won by 100% month over month or reducing discrepancies between budgeted to actual results by 50% over last year. If you have a particularly ambitious self-starter on your team, you could even set individual stretch goals.

Attaching Incentives to Performance Measures

Reasonable incentives can be a great way to encourage your team to reach for their goals. Individual incentives usually involve monetary bonuses, but you can get creative for company goals. Depending on your company culture, consider:

  –  Company-provided lunches

  –  Swag or gift cards

  –  Charitable donations

  –  An extra paid holiday

  –  A company-paid vacation

Attainable Goals Lead to Company Success

When your team has reachable goals to strive for, everyone wins. Employees get a challenge and can enhance their skills to obtain bonuses, and your business ultimately wins by reaching organizational milestones.

How to Measure Your Defined Metrics for Your Construction Estimators

Keeping track of goals and metrics can be tough, but with a cloud-based preconstruction platform, you might already have access to all the data you need.