A Beginner’s Guide to Performance Measures (2021)

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You simply can’t be successful as an organization without a well-run workforce. You need to monitor the performance of that workforce well in order to spot areas where improvements are necessary, because even small changes can lead to huge boosts in productivity.

For example, one study found that productivity improves by up to 25% in organizations that had employees that felt more connected with one another and the company. Based on that, imagine how much your company’s bottom line would increase if you managed to spot major connectivity issues in your organization by measuring performance?

That’s why when it comes to do workforce planning, it is absolutely vital that you have a performance measurement process in place so you can do proper workforce analytics to determine how your workers are actually doing. If not, you’re just going to be guessing, and you’ll probably be wrong.

But which method should you choose? It depends on how complex your operation is and what you’re trying to accomplish. Let’s break down a few of those methods and how you might implement them into your business.


Overview: What are performance measures?

Performance measures are the workforce metrics a business uses to determine the effectiveness and productivity of an individual, component, or group.

There are many different types of performance measures depending on the overall goals of the organization, but in general they are data points that allow an organization to evaluate workers or groups and make adjustments based on what that data indicates.

For example, you might use sales conversion rate to evaluate the performance of a salesperson.


What is the difference between performance measurement vs performance management?

There is certainly a strong relationship between these two terms, however they do not refer to the same thing. A performance measurement system merely refers to how an organization monitors its systems and how its workers are operating.

Performance management takes the data collected from that process and uses it to create goals and performance parameters that workers and groups must meet in order to be considered successful.

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Using performance measures to improve your business

You really can’t operate a business effectively without having some measurement of performance in place.

If you don’t know how everyone is performing, you can’t evaluate what is going right or what is going wrong in your business. You’re basically running your business blind. So if you don’t have a way to measure effectiveness in place yet, now is the time to start.


Methods to measure employee performance

Exactly what aspects of program performance you want to evaluate will vary widely with each company, so there’s no point in attempting to summarize everything you could track here.

However, there are a few methods you should understand that can help you monitor those performance metrics once you determine what they are.

Self-evaluation

Sometimes, the best way to determine the measure of effectiveness of an employee is to ask them. No one knows the obstacles they face and the achievements they’ve experienced better than the worker, so ask them to evaluate their own performance.

You’ll not only be able to spot things you otherwise wouldn’t, but, if handled correctly, you’ll create opportunities to build employee morale by showing that you care about their own perspective of their jobs.

You can use this method in conjunction with other objective methods on this list to create a complete picture of the employee’s performance.

What self-evaluation looks like: Here are a few questions you could include on the self-evaluation:

  • What do I do best?
  • What do I need help with?
  • How can my manager better assist me?
  • What did I accomplish over the last quarter?

Checklist

You don’t always need a complex performance measurement method. If the job is straightforward and all you really need is a checklist of, say, everything you expect the worker to get done in a week’s time, just go with that. It will save both you and the employee a lot of time and may be just as effective as other methods.

What using a checklist looks like: Since this method is better for simple jobs that don’t require a lot of management, a checklist might look something like this. You would then simply go over whether all the items were completed at the end of the week:

  • Mow all lawns on “Springfield Clients” list.
  • Refill all mowers with gasoline by the end of the week.
  • Check the answering machine daily and email all new client requests to the manager.
  • Pick up the new Weedwacker from the vendor by the end of the week.
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Objectives-Key Results (OKR)

OKRs have gained a lot of popularity in corporate environments in recent years. Essentially, an OKR lists all the high-level objectives of a group or individual, and the “key results” or activities that it would take to achieve those objectives.

What OKRs look like: Here’s a basic example of what one portion of a set of OKRs might look like for a company:

  • Objective: Increase sales revenues by 20% within one year
    • Key result: Increase sales staff by 10% by the end of the second quarter
    • Key result: Increase marketing spending by 25% by end of the first quarter
    • Key result: Complete full audit and report on findings of sales team performance by end of the first quarter and present recommendations at quarterly meeting

Behaviorally Anchored Rating Scale (BARS)

A BARS is a newer type of performance measurement method. Essentially, it uses a scale to rate the performance of employees or groups, usually with a vertical scale that aims to eliminate the subjectivity in most performance measures.

BARS measures a worker’s behavior against ideal examples of behavior, and it then assigns a numerical value based on how closely the worker’s behavior aligned with the ideal. This is a good method if you’re worried about performance being measured too subjectively.

What BARS looks like: Here’s what a scale in this method might look like for an organization that employs customer support representatives:

  • 5 – Not only answers the client’s question quickly, but conducts additional research and provides a range of solutions
  • 4 – Answers the client’s question quickly
  • 3 – Answers the client’s question by the end of the week
  • 2 – Answers the client’s question only after multiple prompts from the client
  • 1 – Totally ignores the client

Graphic rating scale

Graphic rating scales are somewhat similar to BARS, in that the former assigns a score to a range of different criteria that measures performance.

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However, graphic rating scale doesn’t involve matching up the subject with an ideal behavioral example. It simply marks whether their performance was satisfactory or unsatisfactory in a number of areas on a scale. This may be all you need as an organization, but it may not give you the well-rounded perspective that the BARS method does.

What a graphic rating scale looks like: Here’s what this scale would look like in a similar situation to the BARS example:

ANSWERS CLIENT’S QUESTIONS PROMPTLY AND THOROUGHLY:

5 – Excellent

4 – Satisfactory

3 – Average

2 – Below average

1 – Poor

360-degree feedback

Most performance measurement methods involve a one-time, regular check-up with the employee, but that process is ongoing in the case of 360-degree feedback. This method also includes input from everyone who works with that individual, rather than just the boss. The method gathers feedback constantly from managers, customers, suppliers, peers, and even from the subject.

The goal is to create a well-rounded and fair summation of the person’s performance.

What 360-degree feedback looks like: Here’s a snippet of what a 360-degree appraisal questionnaire provided to an employee for their manager might look like:

Grade from 1-5 (5 being “strongly agree” and 1 being “strongly disagree”):

  • Supervises well
  • Provides clear instructions
  • Is interested in staff development
  • Acts decisively
  • Invites feedback from staff
  • Deals honestly with staff
  • Manages conflict well

Give one of these methods a try immediately

If you aren’t measuring employee and group performance now, don’t delay another day. Choose one of the methods above that most appeals to you and give it a try to see how it fits in with your company and culture, and whether it makes sense for your employees as well.

This type of strategic human resource management can be tricky, so you might need some help. HR software can help you better track employee performance and eliminate a lot of the manual entry of HR metrics that can be time-consuming and frustrating for you and your employees.

Try one of these methods out for a quarter. At the end of that quarter, hold a meeting with everyone involved to determine if you should continue doing things this way.

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View more information: https://www.fool.com/the-blueprint/performance-measures/

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