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How do you measure employee performance?
I started my company about 1 ½ years ago, and now have 4 employees. I told my employees upon hire there would be an annual review, and now we’re getting to that point. I’m looking for information on how to best evaluate employee performance. Should I have something written to give them? What scale do you use when evaluating performance. Any suggestions are greatly appreciated!
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4 Answers
Breathe. This is not as difficult as it sounds, though annual reviews are not all that easy the first time round.
It's about setting objectives, and then measuring people against those objectives.
I suggest you start by defining a small number of KPI's (Key Performance Indicators) which are the biggest weighting for performance. These should be specific and measurable and relate to the impact on your bottom line of the individual's efforts, the targets for KPI achievement should also be within an employee's ability to achieve (no targets like achieve $1 billion in revenue, for our 10 cent stickers within the next 30 days - for example).
The other things I usually assess are skills, does the employee have the sufficient level of skill to do the job right, if not, I identify development opportunities to meet the demands of the skill. (Not always training, sometimes this is a kick up the posterior moment too).
And competencies/attitudes/behaviours (whatever you want to call them), you can achieve your KPI's and be skillful and still be less than optimal in your dealings with your team/clients/etc.
Skills and behaviours should have less weighting within your framework than the KPI's after all it's the money that really matters to any business.
Try not to put in place rating scales of 1-10, these are abitrary and a bit useless, rather focus on the individual and their needs and your needs for them.
Try and use annual reviews for identifying further objectives, identifying the development needed for those objectives and for singling out specific (always specific, no "well done, you're a good worker stuff" tell them what they did) issues for praise or constructive criticism.
You don't need to put it in writing, but I reccomend you do, the review should include objectives for the following year and you should be able to revise these throughout the year together as appropriate. It also gives you both something to refer to during the year to guage progress.
Hi Julia,
Nik is right - it's not as hard as it seems. In fact I find it's much easier if you get in the habit of constant feedback vs. waiting for a once/year performance review. That way you are helping your great people understand what you need from them throughout the year, and the performance review is simply a summary of the rest. I usually meet with my team members monthly or quarterly to go over their goals, have a look at any obstacles they have been encountering, and discuss and issues/concerns.
You should absolutely put your reviews in writing - it's a great way to see progress over time and to make sure that both you and your employees are on the same page.
Best of luck!
Katy
I've used 10-15 different systems in my career, one pagers to twenty, manager intiated, employee initated etc. I can tell you one thing for sure. No matter what type of system you use, they will all fail if managers don't buy into the fact that they are valuable. When discussing this subject with managers I find it's helpful to discuss what kind of feedback they like.
It goes something like this. You like it when your manager gives you positive feedback right? And it you weren't delivering to his/her expectations you like to know that as well right? (I've never had anyone say no to these two questions). Once I get the two answers, I remind them that the employees that work for them are just like them and want the same things.
As for a particular system, here's the one I prefer.
1. At the beginning of the year have a goal setting meeting where some number of goals are defined along with quality and schedule metrics.
2. Each qarter, hold a brief meeting to update progress and document it as Green for on schedule or complete, Yellow for behind but recoverable and Red for behind and unrecoverable. I sell this to managers not as a performance evaluation but rather a critical leadership tool to manage their business.
3. At the end of the year. a one page review with 3 blocks for each goal (did not meet expectations, met expectaions and exceeded expectations) and a brief explanation line.
The key is to 1. make sure the the manager buys into the fact that the quarterly meetings are really about checking on how THEIR business is running and 2. making sure that the annual review is brief and simply a rollup of the quarterly meetings.
As for timing, I like the annual at some other time than the merit cycle so the discussion is truely about performance rather than compensation.
I like systems, but I think they suit larger organisations where consistency is required across many managers.
In a small organisation with one manager (I call them dinner party organisations), I think you can just ask your people to tell you how they would measure their own performance. Give them some some to think about this, and have a scheduled meeting to hear their response.
You may be appalled by what they say, but you may be pleasantly surprised that they have a grasp of what a good job is, and how they can improve it.
Record the meeting, and add some structure in future years.
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