The performance of employees is not only the fuel that drives an organization, and it can be either one of its greatest assets or one of its greatest liabilities. While unengaged employees might keep your company going—albeit barely, an organization’s culture that values and promotes employee productivity can help build additional momentum that contributes to achieving and exceeding company objectives.
Implement a strategy to measure employee performance to improve the employee experience, identify growth opportunities, and improve the quality of work—and you will ensure that team members reach their potential as top performers.
Understanding employee performance
Performance refers to how employees perform their primary job tasks and duties, emphasizing quality, consistency, and efficiency.
Employee performance encompasses several aspects, such as time management, communication, collaboration, and meeting deadlines.
The meaning of employee performance
Aside from the obvious (as an output indicator), employee performance also reflects how employees feel about their work environment and hint at their job satisfaction level.
When employee needs are being met, productivity – and consequently, profitability – improves. In addition, requesting employee feedback and implementing relevant suggestions can improve the overall performance of your team and your organization as a whole.
How does employee performance affect the company?
Employee performance is the foundation of everything a business is and does. Underperformance can impact more than your bottom line; it can lower team morale, damage brand reputation, and make recruiting and retaining top talent more challenging.
Conversely, a high-performing team can optimize, collaborate, and innovate to reduce costs, boost profits, improve the workplace experience, and outpace the competition.
In many ways, work performance impacts an organization’s success more than the actual product or service provided by the business, making employee performance management a valuable investment.
Measuring employee performance
So, how do you measure something as subjective as performance? After all, performance goes beyond simply completing good work on time. Performance factors that would be overlooked if an evaluation was solely based on meeting metric-based goals include:
- Working efficiently.
- Collaborating with colleagues.
- Brainstorming creative solutions.
- Producing quality work.
- Embodying your organization’s core values.
To get a big-picture perspective, consider using various sources when gathering information for a performance evaluation. For example, managers, supervisors, and team members are all excellent resources for objective opinions on productivity, communication, collaboration, and quality work. In addition, asking employees to self-evaluate may offer helpful insight into their strengths and weaknesses.
Factors influencing employee performance
The most critical aspect of performance improvement is understanding what motivates employees to work the way they do. There is a long list of external factors that have the potential to impact employee performance. But when it comes to what an employer can control, there are three main areas of focus:
Company culture
Your company’s core values should be clear, modeled from the top down, and should support performance. For example, emphasizing attributes like helpfulness, communication, intellectual curiosity, reliability, and a love of learning can help establish a high-performing atmosphere.
Employee environment
A positive workplace culture that values individual employees and supports a healthy work/life balance pays off through performance. Build employee confidence with trust, empathy, transparency, and quality leadership.
Training
Ensure your employees are equipped with the knowledge and skills necessary to do their work well. Prepare new employees with training and mentorship beyond onboarding, and help your team expand their core competencies with upskilling opportunities.
Improving employee performance
Aside from investing time and intentional effort into training, a positive work environment, and a strong company culture, consider the following suggestions to help improve employee performance:
Find the right fit.
Implement a talent management plan to assign employees to positions and projects aligned with their skills and goals.
Support employee development.
Provide growth opportunities such as education, mentorship, and training that support their desired career path.
Set clear goals.
Make sure that performance expectations and goals are measurable and explicitly stated.
Empower and inspire employees.
Encourage leadership to be generous with acknowledgment and appreciation. Recognition is a powerful motivator.
Prioritize communication.
Employees must be informed and updated to do their jobs well, and innovation is only possible if communication is a two-way street. Improve engagement by soliciting feedback and encouraging collaboration.
Conducting effective employee performance reviews
Performance reviews are essential to creating awareness and accountability about expectations, current performance, and potential areas of improvement. Add more value to performance appraisals by incorporating the following elements:
Establish performance metrics.
Although it can be difficult to quantify performance, creating a performance rating scale or rubric makes it easier to compare or measure improvement.
Assess core values.
Reinforce your company’s core values by including them in the performance review process.
Ask for their input.
Invite employees to evaluate their performance by asking what they consider their recent professional achievements, how they think they could improve, and their short- and long-term goals.
Create actionable next steps.
End your reviews with a list of actionable next steps based on your meeting notes. For example, define objectives and key results (OKRs), identify new goals or create a plan for the employee to pursue growth opportunities.
Keep communication open.
Feedback should be an ongoing process. Although one formal annual review may suffice in some cases, frequent check-ins can give employees the time necessary to adjust and improve.
What to include in an employee performance review
The criteria used to evaluate an employee’s performance will vary depending on the organization and the position, but regardless, it should be clearly and consistently established. As you develop your performance review strategy, ask yourself what matters most to your organization.
Are you evaluating employees strictly on quantifiable metrics? Or will you include intangibles? If you choose to assess beyond or not earnings, deliverables, or outcome-based metrics, you might consist of criteria such as:
- Leadership
- Drive
- Initiative
- Team management
- Communication
- Core values
There is no one-size-fits-all method for evaluating employees. Instead, consider your company culture, organizational objectives, and team expectations to develop a performance appraisal model that works best for your business.
With over 30 years of experience, our team of experts will be able to help with your HR and talent management needs. Please contact us for a consultation.
