How to Evaluate & Measure Employee Performance (+Key Metrics)

freddie-marriage-vSchPA-YA_A-unsplash

Your employees drive the success of your business – and it’s important to recognize strong performance, as well as benchmark and improve those not performing at the levels they should be.

However, how do you know what team members are exceeding and which are in need of support? 

Evaluating and measuring employee performance is critical for all businesses. It makes sure your employees are pulling their weight and alerts you to those who aren’t working at the levels they should be.

Here are strategies to measure employee performance

  • Set measurable OKRs and individual goals
  • Benchmark performance by implementing ‘sprints’
  • Implement a project or task management tool
  • Track training completition
  • Conduct a skills gap analysis
  • Create your own employee performance metrics

What’s more, it helps you recognize and reward the hard work of your top-performers to improve employee retention and to grow these high performers into future leaders. Having this data allows you to set a benchmark for performance, and begin to look at strategies to improve your employee’s performance levels.

In this article we will be sharing how you can evaluate and measure employee performance – why this is important.

How to Measure Your Employee’s Performance

Measuring your employees’ performance doesn’t need to be difficult. Many managers assume that in order to track and evaluate performance they need to use employee performance tracking software and know-how to read complicated data sets. However, that’s not true. 

Here are six simple strategies that will help you measure your employee’s performance with ease.

1. Set Measurable OKRs and Individual Goals

Setting measurable OKRs (Objectives and Key Results) for your employees is a great way to keep them motivated and moving forwards. Breaking down big objectives into smaller, measurable actions that lead to achieving a desired result in a methodical way help employees attack goals more effectively.

OKR-example

An example would be if your employee wants to obtain a new training certificate at the end of the month and earn an 80% pass rate. While that goal is cut-and-dry, it can be broken up into objectives that will help them meet their key result, with minor goals such as needing to study for at least 1 hour a day and seeking tutoring help from an expert. Notice, the specific nature of the tasks leaves little room for confusion. 

Successfully completing the smaller tasks should lead to a greater chance of achieving the overall objective, and provide a measurable way for the employer to track progress or see where deviations might have led to not achieving it.

OKRs help your employees set clear objectives, prioritize effectively, stay focused and accountable, and grow as individuals (both personally and professionally).

2. Benchmark Performance by Implementing ‘Sprints’

The sprint methodology is used by some organizations to help employees work more effectively together, through a mutual understanding of time pressure. It helps employees reflect on their working processes and make adjustments and improvements. 

During a sprint, employees are assigned work that needs to be completed within a set amount of time (5 days is common). This greatly increases motivation as employees are working against the clock, and have the opportunity of rising to the challenge over time-paralysis or leaving it to the last minute. Employees understand what they need to accomplish each week, and it’s left to them to divide and conquer their weeks.

At the end of the sprint, employees look back at what they have accomplished, analyze what worked and what didn’t, and develop better ways to work in the future.

3. Implement a Project or Task Management Tool

It goes without saying, the last few years have caused great upheaval to the workplace. Navigating the great resignation, new working conditions, and the blurring of work-life balance through remote work, it’s safe to say that COVID-19 has put greater strain on managing employee relationships. As restrictions continue to fluctuate, many organizations have developed a hybrid working approach and are learning how to measure performance in a hybrid workplace

Implementing project or task management tools are an effective way to do this. Tools such as Asana, Airtable, or Basecamp allow for team members and managers to keep on top of deadlines, maintain good workflow, and avoid feeling overworked. This is a great way to monitor performance, reduce stress, and avoid burnout- which has been at an all-time high over the last couple of years.

“When you have too much to do, it can become difficult to prioritize and deprioritize various tasks. Inattention can cause additional problems at work if you simply don’t have the time or energy to complete important projects. Over time, these behavioral patterns can increase your workload even further, causing you to spiral into a state of exhaustion.” says Kayla Gill, Content Director at LuxuryRehabs.com.

4. Track Training Completion

In order for your organization to success, your employees need to grow and develop, too. And a big part of this is undertaking any relevant employee training programs. With new online learning courses, organizations are able to implement training programs to upskill their workforce, with is critical as many organizations begin to switch to new online tools and digital processes.

Tracking employee training allows you to analyze the progress of your employees as they learn and develop. What’s more, it helps you create a company culture of learning and development that will ultimately further the success of your business.

5. Conduct a Skills Gap Analysis

For managers, many times it’s difficult to understand the skill set and expertise of your team members. Teams often are tasked with multiple tasks, consisting of various processes and digital tools. 

To help understand where your employee’s skillsets are in different areas of their day-to-day, conduct a skills gap analysis. A skills gap analysis allows managers and HR teams to understand the level of expertise each individual employee has in different areas of their core job functions.

skill gap analysis template example

These skills gap analysis tests can be carried out via a simple online survey or exam, and will help identify: 

  • The skills an employee needs to do their job effectively 
  • The level of expertise an employee has in each of these areas
  • Any gaps in a team member’s knowledge that should be addressed with additional training and development

With this information, you can then support your team members who are falling behind with additional training by creating an employee development plan.

FREE TEMPLATE
Skill Gap Analysis Template

Get a free skill gap analysis template to customize for your organization now!

6. Create Your Own Employee Performance Metrics

As you can see, there are many ways to measure your employees’ performance. The most important thing to remember is that while everyone is different, the common goal should be the same. A fair, level playground for performance measurement is essential, and you should implement the system that you and they understand and agree upon. If either side isn’t tuned in and motivated, it’s doomed to eventual dissatisfaction, lack of motivation, or project failure. 

Whilst the above are some of the more common methods used, you could take aspects of each to create your own employee performance measurements, using intuitive insights and data. Listening to the feedback provided by employees is very important, allowing you to curate the system that best fits your organization. This allows you to gain insight into their work performance and efforts, according to those they work with on a daily basis. 

You could also ask your employee to carry out a self-evaluation. Typically, this is done in the form of a survey and requires multiple-choice answers. You can then compare the results of their survey with your own findings and highlight any similarities or differences. This can serve as a good talking point and can help you both find a suitable way forward.

7 Metrics to Evaluate Your Employee’s Performance

Here are seven metrics that allow managers to evaluate their employee’s performance levels.

1. Data from 360 Performance Reviews

360 employee performance reviews utilize the opinion of coworkers, in a professional manner, to evaluate colleagues’ performance at work. Working closely together every day, this is one of the most effective ways to gather qualitative performance data and feedback.

A 360 review evaluates employee effectiveness, contributions, productivity, and behavior at work. There are few closer insights to fully understanding the contribution an employee is making to your organization than from those who are actually doing it. 

2. The Percent of Individual Goals, KPIs, or Objectives Achieved

If you are setting goals for your employees, you need to know if they are on track to hit them. If employees are not hitting what has been mutually deemed as achievable, action is required. 

Tracking KPIs and OKRs provide unbiased opportunities for discussion – positive or negative. This data can provide valuable insight into the efforts your employees are making and will help you understand which employees have are high-performers, and which ones are in need of support or intervention.

3. Qualitative Feedback from Customers and Peers

Sometimes, the best way to get a true insight into an employee’s performance is to directly ask the opinions of those closest to them. Naturally, this has to be handled carefully and in a professional manner, but in a fair and level way that can provide a deeper understanding for everyone.

Gathering qualitative feedback from other colleagues, peers, and even customers can provide valuable insight into the effort your employee is putting in when you are in the office and when you aren’t.

4. Percent of Tasks Completed

Is your employee missing deadlines? Forgetting to call clients or turning up to meetings unprepared? Or, are they always early, well prepared, and methodical in their delivery? 

Every employee has their strengths and weaknesses, and as a manager, it can be hard to separate bias from the reality of their actual performance. 

Using an employee productivity tracking tool, organizations are able to log the completion of assigned tasks and monitor productivity levels to understand what percentage of their tasks are being completed. Allowing data to decide is the most fair and most unbiased way to analyze performance.

5. 9-Box Grid

The 9-box grid method is an individual assessment model, allowing an employee to understand their current performance against their growth potential. The vertical columns of the grid show what kind of growth potential an employee has, while the horizontal lines indicate what level an employee is performing at.  

9-box-grid-example

Using data from the 9-box grid method you can evaluate whether an employee is underperforming, performing at a satisfactory level, or exceeding your expectations. This simple breakdown of performance highlights areas for praise or improvement and provides an unbiased basis review.

6. Quality of Work

According to Alex Ponomarev on Medium, “it’s not the quantity of work that brings value, it’s the quality. You know, some managers judge the quality of development work by the number of lines of code written. This is insane. It’s like judging the quality of a writer by the number of words written. Or a doctor by the number of IV infusions made. It’s just the wrong metric.”  

To measure the quality of an employee’s work, you need to understand what work is being asked of them and how it is being reviewed and received. The output doesn’t equal quality. Just because your employee is finishing their projects on time, doesn’t mean it’s of high quality. Vice versa, time spent in the office or on a project isn’t necessarily relevant to the outcome. You need to consider what good looks like, and how it is being received by those that matter. 

This means understanding the impact your employees’ work is having. Measure performance based on results.

7. Attendance

Employees can and will take time off work for all manner of reasons. From illness and mental health struggles through to personal issues or family emergencies. Unplanned or unreported absences, however, are a whole other story. Sometimes, employees are absent for a number of days without checking in to tell you why. This is a red flag and it is important to hold employees accountable

Employee absences must always be reported to managers. If they aren’t, you will need to have a conversation with those individuals. One effective strategy is to use attendance tracking software. These tools allow you to monitor employee absences and track any emerging patterns. This not only provides you with valuable insight, in the form of reports, but it provides evidence of the issue so that you can carry out the appropriate action with confidence.

whatfix-user-guidance-gif
Improve employee performance with in-app guided learning & on-demand support with Whatfix

5 Reasons to Gauge Employee Performance

Understanding how employees at all levels of your organization are performing is imperative to ensuring the continued growth and success of your business.

Now that you know how to track and evaluate employee performance, here are 5 reasons why you should. 

1. Sets Expectations

As soon as employees start working at your company, they must know what is expected of them. Tracking their performance is a great way to set expectations. It allows you to share both company and individual goals with your employees so that everyone is on the same page and working towards the same objective. 

2. Allows Managers to Benchmark Performance Levels

Benchmarking is one of the best ways to measure employee performance against company standards. Benchmarking provides you the opportunity to measure the progress of your employees against other organizations within your industry.

This helps assess whether your organization is up to standard and what can be done to improve employee performance. It keeps a competitive edge, pushes employees to work harder, and helps further your business productivity and growth. 

3. Improves Employee Development and Retention

How are your employees supposed to develop if they aren’t given opportunities to do so? By evaluating employee performance you are keeping an eye on areas for improvement within your organization.

This allows you to be on the front foot in offering your employees a performance support system so they can improve their skills and further their careers. Progression is extremely important and is one of the best ways to retain your top-performing employees for the long term. 

4. Identifies High Performers and Future Leaders

Have you ever wanted to hand a client proposal over to your best team member but aren’t sure who you trust most? We’ve all been there. This is why it is so important to measure employee performance throughout the year to understand which team members are your team leaders.

Staying in touch with the progress of your employees and understanding what they bring to your company helps identify those employees who truly stand out. You may discover future managers, team leaders, and company directors.

5. Drives Company Growth and Success

The only way for your company to grow is if you prioritize employee training and development. Growth and success happen when employees are pushed out of their comfort zones and trained up in their skillsets.

Employees are the ones that make businesses successful. Without them, your business is unable to hit its goals. It’s important to put everything you can into training your team members so they can deliver their best work and provide incredible results for your company.

Drive employee performance with a digital adoption platform

Communication is key with all methodologies, on a level playing field where everyone involved understands how they can perform, contribute and progress. Performance is ultimately about achieving the company objectives, one measurable task at a time.

With Whatfix’s performance support system, create in-app guidance such as walkthroughs, tooltips, tasks lists, self-help widgets, and more – all providing on-demand support to your team members in the flow of work on your digital tools and processes.

Get started by requesting a demo now!

Share on facebook
Share on twitter
Share on linkedin
Table of Contents
Subscribe to get new content delivered directly to your inbox.

Thank you for subscribing!

Sign up for our blog & get our best new content right to your inbox.
The Whatfix blog is enjoyed by over 150,000 monthly readers!