Every company’s success reflects its staff’s productivity. That’s why performance management is one of the most critical aspects of human resources.
According to a Bucharest Academy of Economic Studies research, employee efficiency and productivity directly affect an organization’s growth. It also reported that staff performance could affect customer trust and loyalty.
Understanding your workforce’s strong suites and identifying where they need improvement will set you on the right course. You’ll also bolster employee retention and job satisfaction.
However, what is the right way to measure performance? How do you capture critical metrics and gauge them? This article covers tips on getting the performance appraisal process right and the different measurement methods you can apply.
Tips on Measuring Employee Performance
Numbers don’t lie, they say. However, in this case, you’ll be working with other insights. From feedback to behavioral analysis, there are all sorts of metrics to put into consideration. However, before you start using any method or metric, there are a few things to keep in mind.
Employ a Simple Strategy
An employee performance appraisal process can quickly turn into a complex affair. The more you analyze productivity and efficiency, the more you’ll look for means to get accurate measurements. That said, you have to remain grounded by the original goal and keep things simple. Start by identifying and defining the kinds of metrics you want to gauge. Then, focus on making each process simple and determine how frequently you want to run them.
Use Clear Measurements
The yardstick you use to measure your employee’s performance is as important as the entire process. First, you have to consider each worker’s role when gauging their successes and challenges. Then, improve those metrics to develop the perfect scoreboard.
Also, you must use clear and straight-to-the-point statements and questions when collecting surveys and feedback.
Don’t Rely on a Single Performance Measurement Method
There are different methods used to appraise employee performance. Relying on one defeats the purpose of collecting comprehensive data adequate to evaluate quantitative and qualitative performance. So, while deciding which performance appraisal style to use, make sure you’re covering all your bases. Still, don’t go with too many to avoid overwhelming your employees.
Gather Qualitative and Quantitative Data
Gathering numerical performance metrics isn’t enough because you’re dealing with humans. You have to combine those numbers with qualitative performance data. Use different methods to gather feedback from peers, subordinates, and managers. The feedback data should cover answers regarding behavioral qualities and competencies.
Set Defined Goals and Measure them
Setting measurable objectives and milestones is a great way to develop a sound performance tracking system. Employees score points for reaching each milestone and executing objectives. There should also be bonus points for timing.
According to a Dominican University study, writing out your goals improves your success chances by 20%. So, you’re not just building a performance rating system but also encouraging your staff to meet their goals.
Get Feedback from Employees about the Appraisal System
Don’t just develop a measurement plan and implement it immediately. Consult with your employees to know how they feel about the process. Since the method also includes plans to evaluate managers and those in leadership positions, you’d want the respondents to be comfortable with it.
Different Methods to Measure Employee Performance
Below, you’ll find different ways to measure and evaluate your staff’s performance.
Calculating Employee Efficiency
While productivity focuses on output in relation to time, efficiency grades the value and quality of work produced in a specific timeframe.
Employees are efficient when they can expertly execute jobs without making costly mistakes. As a result, deadlines will be met without compromising expense and quality of work.
Employee efficiency is typically calculated using key metrics such as the time spent on a job, output, and work quality. However, you can also calculate an employee’s overall efficiency by looking at the total amount of time spent at the office over a period against the quality of their output.
Calculating time spent on a specific task and whole workdays can be easy if you use a work time tracker. While these solutions are best suited to remote workers, they can be deployed in traditional offices.
You can also evaluate team efficiency to determine which employees work best together and the types of projects they’re well-suited to.
Generally, calculating efficiency can help you identify critical areas of improvement that will help move your team forward.
360-Degree Feedback
Most performance measurement methods only rely on data generated by the employee and gathered by the manager.
With the 360-degree method, anonymous feedback is collected from various people who have worked alongside an employee. These could include the employee’s supervisor, team members, subordinates, and even clients. Also called a “multi-rater feedback” or “group review,” this method provides employers with a comprehensive view of the employee.
The appraisal system is typically used for development purposes. It provides insights into a worker’s relationships at work, behaviors, and work competencies. Leaders and managers mainly use 360-degree feedback to understand their weaknesses and strengths and develop better managerial policies.
The ideal process involves sending out anonymous online feedback forms that will be filled out by people associated with the employee. Respondents can be grouped by their relationship with the worker. For example, there could be a “Peers” or “Clients” group. Questions should be restricted to the employee’s behavioral qualities rather than their technical competencies.
Graphic Rating Scales
Graphic rating scales allow you to score an employee’s performance in different roles using sequential numbers. These markers are generally used to rate behavioral traits such as punctuality, job knowledge, accountability, teamwork, and responsibility, among others. However, they could also gauge work quality and even output.
The scale works by listing numbers to determine how best to describe an employee’s performance on a particular subject. For example, using a scale of 1 to 10, 10 signifies high performance while 1 indicates the employee lacks the listed behavior.
There are two main types of scale used to measure individual employee behavior. They include continuous and discrete scales.
Discrete Scale
The discrete scale uses specific statements and responses. Each ranking describes a result, and they’re typically ranked 1 to 3 or 1 to 5. Here’s a discrete scale performance measurement example:
Statement: This employee executes tasks with minimal supervision
Answer: Choose the fitting remark from below:
- Highly improbable (Does not work well without supervision, makes regular mistakes, managers must double-check for errors)
- Quite improbable (Doesn’t feel comfortable working without a more experienced colleague)
- Maybe (Hasn’t particularly worked well enough without supervision)
- Quite possible (Always welcomes the challenge of working independently)
- Highly possible (Proven efficient on numerous occasions and solved high-level problems with close to no supervision)
Continuous Scale
With this method, two extreme statements or behaviors are listed on each end of the scale with numbers running through them. The manager or supervisor will then choose a number on the scale that best describes the employee.
Example:
Statement: Rate the employee’s job knowledge using a scale of 1 to 10.
Answer:
1 – The employee knows nothing about the job
10 – The employee is highly knowledgeable about the tasks.
SWOT Analysis
Short for Strengths, Weaknesses, Opportunities, and Threats analysis, this method helps identify areas where an employee can improve on and where their specialty lies.
Strengths represent positive attributes and competencies under the worker’s control. The employee can use these traits to advance their career.
Weaknesses showcase behavioral and technical qualities which the subject can control. They’re identified as areas of improvement.
Opportunities represent positive external situations that are out of the employee’s control. They can use opportunities to their advantage to affect growth.
On the other hand, threats are external situations the individual can’t control. If not managed properly, they can cause a drop in performance.
Conclusion
Don’t forget to create an improvement plan after collecting the work performance data. Knowing your workers’ strengths and weaknesses means you can now reposition them in their right departments and address specific issues.
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