It is important for business owners or managers to know how to measure employee performance in their organizations. There are many ways to measure the performance of employees. So, this article explains different strategic ways on how to measure employee performance in organizations.
How to Measure Employee Performance
How is employee performance measured? Here are the different ways through which you can measure the performance of your employees.
Management by objectives
One way on how to measure employee performance involves using management by objective. Management by objectives is a subjective way of measuring employee performance. Management by objectives refers to the management tool that managers can use to enhance organization performance by translating the organizational corporate objectives into goals and points are attached to these goals. The established goals refer to the objectives that must be achieved by an employee or manager.
However, the organization measures employee performance by assessing the ability of the employee to attain the established goals within the required timeframe. Using this employee performance assessment tool, you must measure the progress of the employee towards the attainment of the established goals at a regular interval. Then, award points to the employee upon attainment of such goals. With this, managers are able to review the performance of employees.
360-degree feedback is another tool to measure employee performance in an organization. This tool involves measuring the performance of an employee based on the assessment by his colleagues, customers, subordinates, and managers. These people provide feedback on the performance of an employee by awarding performance scores. This tool provides accurate and general views of an individual employee’s performance, skills, and what to improve upon. The fixed scale is used in assessing different elements of an individual’s performance. 360-degree feedback mostly focuses on the measurement of behavioral competencies of employees, not on technical competencies.
However, using 360-degree feedback to assess employee performance is time-consuming. But, it provides insights on the performance of the individual employee as well as enhances performance improvement.
Another way on how to measure employee performance is to use 180-degree feedback. This tool is a simple type of 360-degree feedback. This tool doesn’t involve external people, such as customers, in assessing the performance of an employee. So, it involves assessing the employee performance based on the feedback from his colleagues and managers. However, this tool is suitable for assessing an employee who does not have direct contact with customers.
Behavioral competencies measurement
Another way on how to measure employee performance is to measure the behavioral competencies of the employees. Behavioral competency refers to the behavior or skill that employees require to carry out their roles effectively and efficiently. The competencies of employees are considered during recruitments, salaries and wages reviews, training and development, the delegation of responsibilities, and others.
However, for an organization to evaluate the behavioral competency of its employees, the company has to develop a competency framework. Then, the employees are evaluated based on the competency framework during performance management to determine the competencies of the employees and identify areas that require development in the future. The roles of an employee determine the competencies that an organization expects from such employees.
Quality of work measurement
Another way on how to measure employee performance is to measure the quality of work performed by the employee. Measurement of employee’s quality of work is very important because quantity is different from quality. An employee may produce more products that do not meet the company’s standard or required quality. However, employees must be able to produce the required quantity at the accepted quality within the standard time. This is very important because producing substandard products by an employee can lead to incurring additional costs or amount to wastage or selling such product at a price lower than the prevailing market price.
Therefore, adequate training should be provided to the employees to ensure that they produce the required quality. So, any employee producing substandard products should undergo more training and improvement should be recorded within the required timeframe. Failure by the employee to improve within the timeframe may lead to the punishment or termination of his employment.
Another way to measure employee performance is to measure the efficiency or productivity of your employees. The ability of the employee to complete high-quality work within the required time is also important when measuring employee performance. To objectively measure the performance of your employee, you need to consider the ability of the employee to perform their duties within the required time.
Another way to measure employee performance is to measure the punctuality of the employees. Because there is a belief that employees that frequently absent from work or frequently come late to work are unable to attain their performance objective within the required timeframe. Assessing employee performance based on punctuality helps the company to examine the reasons for their absence or lateness. The reasons can be cultural problems, social problems, and others.
It is important to know how to measure employee performance in your business. However, employee performance evaluation is an exercise to be done regularly and includes different areas of work ethics. Carrying out employee performance assessments on regular basis helps an organization to easily identify and solve the cultural problems within the organization.
Additionally, different performance tools such as iDoneThis,15Five, DeskTime, and others can be used to ensure comprehensive feedback on the performance of employees. Meanwhile, the organizations should set clear, objective, measurable, and time-bound criteria to make the assessment process easy for the employees as well managers. If you need any help on employee performance evaluation, you can contact us.
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Afeez is one of the founding partners of Marasas Consulting limited. He consults for both individuals and entities in the area of accounting, management, audit, tax, and investment. He has a wide range of experience both online and offline which allows him to provide relevant and timely professional advice and assistance to business owners with their accounting, tax, management, audit, and investment plans.
Afeez is a member of the Institute of Chartered Accountants of Nigeria (ICAN) and a member of the Nigerian Institute of Management (Chartered). He is a certified Google analyst and strategist. He earned his Bachelor degree in Management and Accounting from Obafemi Awolowo University, Ile-Ife, Nigeria, and earned an ordinary national diploma in Accountancy from The Polytechnic of Ibadan, Oyo State, Nigeria. He earned certification in “Excel Crash Course” and “Reading of Financial Statement” from Corporate Finance Institute, Canada.
Afeez is dedicated to helping clients achieve business success by helping them to establish solid and sound accounting, tax, and financial processes.