How to Measure Individual Employee Performance - dummies

How to Measure Individual Employee Performance

By Bob Kelleher

To increase the chances that your employees become and stay engaged, and that your organization’s goals will be met, you must connect the metrics in a balanced scorecard and other key organizational goals to each employee’s job.

This is critical in building a “line of sight,” which is key to employee engagement. Typically, this is done through the dreaded performance appraisal process, which is generally despised by managers and employees alike.

Employees don’t want to be average — they want to win! To really get the most out of your people, you have to define and communicate what constitutes “high performance.” If you don’t, you can’t expect improvement from your employees.

The best scorecards build in “average” and “high-performance” norms to activate their employees’ achievement gene. Your staff needs to have a clear picture of what’s optimal, not just the minimum required to get by.

Most companies benchmark against competitors but shy away from benchmarking within their own organization, but this approach is foolish. You need to know who your top-performing employees are (or aren’t) before you can determine why they perform highly (or don’t). How do you define those individuals? What are their performance benchmarks?

If you don’t communicate average and high-performance norms, the best you can hope for is to sustain mediocrity.

So, what individual metrics should you measure? There are probably dozens — if not hundreds — of different types of jobs at your company, let alone in the world, and there isn’t one set of metrics that would apply to all of them.

The best performance management and measurement systems include a blend of quantitative metrics (the “what”) and qualitative metrics (the “how”). If an organization can capture and report on quantitative benchmarks for average and high-performing norms, employees will better understand what defines success.

For illustrative purposes, this table provides examples of both quantitative and qualitative metrics.

Examples of Quantitative and Qualitative Metrics
Quantitative Metrics Qualitative Metrics
Number of defects Teamwork
Number of calls per hour Dependability
Number of customer calls Initiative
Percentage complete Planning and organization
Percentage of projects completed on time Enthusiasm
Number of projects completed on time and within budget Mentoring and coaching
Number of projects completed within budget Communication
Percentage of performance appraisals (of direct reports)
Profit contribution Cross-training
Sales Customer orientation
Win rate Cooperation
OSHA recordables (injuries reported to OSHA) Quest for learning
Shrinkage Project management
Number of patient re-admissions Technological efficiency
Number of infections Resourcefulness
On-time delivery rate Inquisitiveness
Returns per employee Creativity
Sales per employee