How To Measure Employee Performance | 5 mins read

How to Measure Employee Performance

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Lauren Christiansen

By Lauren Christiansen

Why Measure Employee Performance

Unfortunately, many business owners aren't fully aware of what their employees are up to. They read reports every month or so and know accurate sales projections, but have no way to measure employee performance. It's hard to give accurate bonuses or know who to demote when there isn't a clear set of practices in place to track productivity.

What managers don't know will hurt them and their team members. Workers tend to get upset when they don't feel appreciated for the work they do. Managers may not realize that one or two employees continue to pick up the slack from poor performers. Measuring and handling performance is critical because it provides the ability to gauge employee efficiency. Furthermore, there's no way to resolve bottlenecks that prevent teams from performing their jobs.

Read ahead for other top benefits of measuring worker efficiency.

1. Employee Performance - Identify Strong and Weak Employees

Regular performance evaluations consisting of specific performance metrics enables managers to track efficiency over a certain period. This allows decision-makers to pinpoint which teams outperform others, and which fall behind.

Managers can then provide incentives and promotions to top performers, along with additional responsibilities. Underperformers can be given a set of performance goals to ensure improvement and alignment with company goals.

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2. Employee Performance - Identify Appropriate Pay

In a small business, a performance review should align with employee pay. A high-performing team member that consistently meets expectations deserves a pay raise.

At the same time, a team member who is frequently late and doesn't achieve goals should not receive a raise. That is until the worker meets individual goals as established by the employer.

3. Employee Performance - Improve Productivity

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When there is a set of management objectives in place to measure employee efficiency and teams are paid appropriately, the company will be more productive. As a result, there will be more sales and customer service will improve. Employees will be more cognizant of those who regularly meet performance goals and will follow their lead.

At the same time, workers will see there is accountability for those who underperform. They will do whatever it takes to avoid their mistakes. This will enhance the overall company culture and improve employee morale, which decreases turnover.

Measuring Employee Performance

So, it's clear that assessing employee work and efficiency is critical to achieving key performance goals. But how can a small business start and follow through on this process? Companies need to first recognize their goal-setting objectives and expectations. They should ensure worker efficiency aligns with those company needs. Next, they must utilize performance reviews, performance measurement systems, and other tools to follow through.

Here are some performance measurement metrics to include in an employee evaluation.

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1. Measuring Employee Punctuality

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Workers who show up late or are always absent usually don't meet employee performance metrics. Managers need to determine what the underlying problem is. Is morale low? Are the company's training programs insufficient? Are other workers also showing up late? Are job descriptions inadequate? Do teams have poor time management skills?

Regardless of the cause, punctuality problems impact the entire company culture. Managers need to resolve them as quickly as possible to improve morale and employee productivity.

2. Employee Performance and Quality Work

Quality work is critical to achieving business growth. How quickly it takes to complete a project is the key indicator to evaluate employee performance. Questions to answer include-

  • Is work quality average or excellent?
  • Are teams using all of their efforts to finish projects?
  • Do employee attitudes impact their capacity to achieve goals?
  • Do workers fully comprehend their personal goals?
Answering these questions will enable managers to comprehend the root cause of any bottlenecks.

3. Employee Performance and Personal Habits

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When workers have bad habits, they tend to perform poorly. If they engage in gossip, take frequent breaks, or constantly check social media, there is a problem. If there is no degree of feedback from management, they will continue to engage in those behaviors.

Management must clearly state which behaviors are acceptable and use disciplinary measures if rules are not followed. This will improve the workplace culture and hold everyone accountable for their actions. It will also standardize a set of best practices in terms of conduct, expectations, and break times.

4. Employee Performance and Customer Surveys

When quality work is rare and individual employees are late, customer service will suffer. There must be a performance metric in place to gauge how performance impacts customers. A client survey can help managers evaluate employee behavior and pinpoint specific problems.

Managers should also ensure that customer service representatives have adequate job training. This will improve job performance and help employees meet customer needs.

5. Perform Random Employee Performance Checks

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When employees expect managers to measure performance, they tend to be more efficient. When they don't expect it or know it's rare, they probably won't work as hard. Managers should perform random employee evaluation to improve employee productivity and keep teams on their toes.

This is not to intimidate anyone, but to optimize long-term quality control and individual performance. Evaluating worker performance should consist of appropriate metrics that measure work ethic and individual goals.

Key Takeaways of How to Measure Employee Performance

In conclusion, here is how to measure employee performance -

  • Measuring performance is critical to identify strong and weak employees, identify appropriate pay, and improve productivity.
  • To maximize performance, managers need to measure several things. This includes punctuality and the quality of work.
  • Managers should also check employee personal habits and behaviors. Using a set of customer surveys can help improve the quality of service and ensure employees are adequality trained to handle customers.
  • Managers should use regular performance checks to hold teams accountable for their work. This will improve the company culture and increase morale, which lowers turnover.

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