Hit the jackpot: How to measure employee performance

As HR leaders, we want to shout the successes of our employees out to stakeholders, while showing we are on an upward trajectory regarding development and improvement. Unfortunately, however, performance reviews are dreaded by employees, with 22% saying they have called in sick to avoid facing a performance review. It’s no wonder that only 5% of HR managers are satisfied with performance reviews.

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It’s clear that the way we measure and inform employees of their performance has to be re-evaluated. Managers frequently base reviews on feelings and hunches, give poorly constructed feedback, and fall short when it comes to assessing performance in a clear, structured manner.

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However, evaluating performance can be tricky. For this reason, we’ve written this guide to measuring employee performance.

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What is employee performance?

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In order to measure performance, we first need to define it. Employee performance is a metric that evaluates how effective a worker is at their job: how they fulfil the tasks required for the role, behave in the workplace, and bring about results. It is measured through the quality, quantity, and efficiency of the work.

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As every business is first and foremost made up of its employees, it’s important to ensure everyone is performing to the best of their ability, as well as given support to develop and improve. In order to do this, monitoring employee performance is crucial, both in the big picture of how the business operates, and on the micro level to support individual employees.

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How is performance measured?

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Performance is usually measured using four variables: quality of work, speed and efficiency, trust, and consistency. These metrics allow you to add a tangible element to your performance reviews — instead of speaking amorphously, you can show real figures and data that speak for themselves and show you exactly where the victories are and what should be improved.

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Quality of work

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This metric forms the basis of performance analysis. When you employ an individual, you expect them to present you with high-quality results. The quality of their work examines whether employees are putting in enough effort to ensure the best results, objectives are being met, and the employee is capable of executing the tasks required of them.

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Speed and efficiency

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While quality of the work is central to the performance of an employee, the speed and efficiency at which they work is another important factor. If your employees produce incredible work, but it takes them three times the market average to complete their tasks, it definitely presents a challenge that needs to be addressed.

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This metric will assess how much an employee accomplishes in a certain period of time (depending on your review): does the quantity of the work aligns with your expectations and market standards, and are deadlines met? However, producing a lot of poor-quality work quickly is also bad, so you’d want to also assess whether corners are being cut to produce rapid results.

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Trust and engagement

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If your employees work well, produce amazing results, and deliver them quickly, but in order for them to do so you need to constantly look over their shoulder, you’re wasting everyone’s time. That’s why trust is another important factor when it comes to evaluating employee performance. It’s a metric that considers the level of trust you have in your team to complete all their work to the highest standard and on time: whether they are punctual, engaged, and happy to work independently or they need a manager to motivate them.

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It’s also important to assess alignment with company values within this process. If your employees share and display these values consistently, they are more likely to be motivated to work and perform better, allowing you to trust them more.

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Further reading: The benefits of employee engagement

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Consistency

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All of the factors above are essential to measuring employee performance. Another element, however, is consistency. If your employee works perfectly one day and poorly the next, you won’t be able to produce consistent results, which are also important for business success and performance. Consider the employee’s performance over time, and not just in a particular period.

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How to evaluate employee performance

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The metrics are now clear, but how do you collect data and come to conclusions about employee performance? There is a plethora of ways to evaluate performance, for example:

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• 360-degree feedback: Collect feedback from those who work alongside or supervise the employee, instead of relying solely on your or one manager’s opinion.
• Objective-based performance: Set specific goals with clear deadlines with your employee and monitor progress.
• SWOT analysis: Together with your employee, map the strengths, weaknesses (or areas for development), opportunities, and threats in the employee’s day-to-day work life.
• Ranked performance scales: Score different areas of performance using a 1-3, 1-5 or 1-10 scale. Ensure you give examples and evidence to support your score, and also what you’d like to see the employee do to improve their score.
• Self-evaluation: For employees who are more conscientious, you may ask them to judge their own performance using a set of questions you provide.

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Any or all of these methods should be used alongside a verbal performance review, to allow you to start a discussion, understand the context, and provide guidance for improvement.

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How to improve staff performance and productivity

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Even if your team performs outstandingly, there’s always room for improvement. Here are a few tips to help:

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1. Create a positive workplace culture

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Let’s face it. We spend so much time at work, we all want to do our best to make this time as pleasant as possible. Sadly, however, when workplace culture becomes negative or even toxic, it creates a butterfly effect that impacts a lot more than just how happy your employees are. Promoting a positive, helpful, and supportive organisational culture can help boost performance. Using surveys and assessment, such as the Thrive development platform, you can evaluate your culture and work towards improving it.

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2. Prioritise learning and development

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When a candidate accepts a job offer, they have a picture in mind about their future at the company. It’s very unusual that this picture would paint themselves doing exactly the same thing as they did on day one. As an employer, part of your job is to encourage development and guide your employees to reach their professional goals. By investing in individual employee development plans, you can ensure you’re fulfilling this expectation.

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Further reading: How to support your employees’ development

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3. Set measurable and realistic goals

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Working towards a clear and specific objective is a great way to measure performance. However, it’s vital not to treat this as a hypothetical exercise. Really think about the goals you’re setting together with your employees — you want something that will challenge them, but that will also be realistic. Importantly, you want to be able to clearly measure it. Instead of ‘improve brand awareness’, try ‘appear in 30% more searches’ or ‘launch a new podcast’. These goals should be closely monitored.

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4. Regularly recognise great work and improvement

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When your employees perform well, what do you do? Do you celebrate their achievements and shout it through the rooftops, or do you let it go unnoticed? Giving positive feedback and encouragement when employees perform well will motivate them to continue to do so, and provide inspiration for others in the company.

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5. Maximise job satisfaction

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The more satisfied and fulfilled your employees feel doing their work, the better they are going to perform. You should assess whether your compensation and benefits are aligned with the market, and use surveys to evaluate happiness and understand what your employees are expecting or missing from your offering.

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6. Act when you don’t see improvement

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Constant re-evaluation is always needed, but especially when it comes to performance. It’s crucial to monitor improvement and be proactive when it doesn’t fit the expectations: ask yourself what you can change. Taking a step towards improvement is important, but it’s also important to assess whether a change of course is necessary.

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Want to improve employee performance, development, and happiness? Book a demo with Thrive today.

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