“PCG Business Bulldozer”
This month: You Can’t Manage What You Don’t Measure, Including Employee Performance
Effective management is often a matter of assembling the facts and making an assessment of the best course of action based on the best information at hand. With employees, management can be more difficult unless you have the proper metrics to actually measure performance and objectively assess how well your staff is doing.
This month, we want to offer these five steps that have helped our clients with measuring employee performance. Of course, there are a number of theories on the best way to measure performance, whether it’s Management by Objective, financial contribution, productivity, or less intangible metric. We’d love to hear how you measure performance for your employees – drop me a line at email@example.com.
Employee Performance Measurement by T.J. Van Voorhees
During the last twenty years, many business owners and managers have engaged PCG to help tackle challenges their companies were facing. In some instances, the hurdles involved tough new competition, or questions about financial management. But the most common issue was far less obvious, and far more serious. I’m talking about a fundamental managerial responsibility: employee performance measurement. It has the potential to hold your business back, or set it on course for great future success.
“Employee performance measurement” is the evaluation of an individual’s work based primarily on objective, quantitative metrics. While subjective evaluation of performance has its place—for example, observations of work ethic or collaboration with others—empirical measurement offers significant benefits and should be instituted for every position in your organization, thereby creating more of a level playing field. We use a proven five-step process that works very well for employee performance measurement:
Step 1: Define the Value of Every Position – Before you can evaluate employees, you need to define the value they bring to your company or department. You need to ask yourself how each position contributes to your overall goals; without some alignment between an individual’s objectives and the company’s overall direction, you won’t make the best use of your resources.
Step 2: Establish Realistic, Measurable Objectives – Once you’ve defined the manner in which each job position adds value you need to establish performance parameters. Remember that realistic objectives are critical. For example, recognize that no employee is 100% productive all the time. For most jobs, a more reasonable productivity level is 75 – 80%; applying that to our eight-hour day, we get six – six and ½ hours of dedicated work time.
Step 3: Create and Use Measurement Tools – You need to monitor employee performance on a regular basis. You can do some of this through routine observation and interaction with your team, but in many cases it’s useful to have automated tools that track performance. If it’s not possible to build or buy a system for tracking work, you and your supervisors will need to rely on regular interaction with employees to make sure objectives are being met. In some cases, periodic sampling works well, while in others, it’s valuable to monitor performance more frequently. Once your tools and processes are in place to measure performance, use them!
Step 4: Get Everyone On Board – Every position can be measured in some way, and doing it just requires a bit of thought and planning. Allowing employees—even VPs and Executives—to work without performance metrics means that you’re not holding them (or yourself!) truly accountable for their contribution to the organization.
Step 5: Connect Measurement Standards to Company Goals – The last step is to ensure that your employee measurement standards are consistent with your organization’s overall goals. For example, if your objective is to improve customer relations, but your support team is measured on the quantity rather than the quality of support calls, you have a problem.
Remember, every employee position can be measured. If you can’t measure an employee’s performance, you should question why have that role at all? Sometimes it’s easy, and sometimes it’s complex, but every position can be measured objectively given proper thought and planning.
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March 2011 Newsletter
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Copyright 2011, Pacific Crest Group, All rights reserved.