Measure Performance in Your Small Business

Part of the HR for Small Business For Dummies Cheat Sheet (Australian Edition)

Measuring work performance is probably the most difficult task that any employer, including small business employers, can attempt. We intuitively know what good work performance is, but it’s really difficult to put into words. Nevertheless, it’s a task worth pursuing as it both sharpens your own sense of what it is that you want employees to achieve, and provides employees with a clear direction on what is expected of them. Here are some simple quantifiable methods that you can use to formulate performance standards:

  • Comparative measures are useful when a little competitive motivation can encourage staff. For example, comparisons in a sales team can help better performance. Identify and reward the best performers in the team.

  • Personal attributes are often good indicators of how well a person performs in their job. Such attributes may include leadership, initiative, problem solving, empathy and teamwork. Your observations and the views of other staff can be drawn on to assess the degree to which an employee exhibits the desired attributes.

  • Behavioural standards can be the mark of a really good employee. For example, you may wish your staff to show great patience with difficult customers, or just welcome people as they arrive at your business. Keep a diary of instances where staff have behaved well and not so well. Use this as a measure to draw upon when assessing performance.

  • Good results can’t be substituted. Good sales, new clients, improved production, valuable cost savings, but to name a few. These are usually the easiest to estimate and therefore project targets for each employee to work towards achieving.

  • Quality means customer satisfaction and consistently high standards of service and products. Manufacturers in Japan rose to great success in the 1980s on the basis of consistently providing high-quality products and service at competitive prices. There is no reason why you can’t do the same. Survey customers regularly and feed that back to staff. Quality check all of your production and service standards by making people individually responsible for their part in the production process.

  • Means-based methods of measuring performance focus on the way in which the work is performed rather than the end result. The assumption is that as long as an employee performs the tasks according to a strict methodology then the desired result (for example, a sale) will occur. Fast food outlets swear by this method.

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HR for Small Business For Dummies Cheat Sheet (Australian Edition)

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