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The 4 Metrics to Gauge Employee Performance

Understanding and leveraging employee performance metrics is crucial for the success of any organization. In this guide, we'll explore essential HR performance analysis and talent management strategies to enhance your workforce's effectiveness.

A company is only as good as the talent behind it. Consistently and accurately evaluating and measuring employee performance is essential not only to individual success, but also to the overall success of an organization.

That being the case, you’d think more companies would actively analyze their HR data. 56 percent of people teams hope to incorporate more data in their processes in 2018—a 10 percent jump from last year. The question is, exactly how do you measure employee work performance?

Many companies tend to take the more-is-better approach when it comes to measuring work performance, evaluating talent across a wide (often too wide) range of qualities, skills, competencies, etc. But where employee performance metrics are concerned, less is more.

In an effort to accurately gauge the performance level of your employees, consider scaling down from too many subpar measurements to these four tried-and-true talent performance metrics. From assessing quality of work to individual goals, reviewing employee performance on an individual level will help you form an accurate understanding of how your talent stacks up to the rest of your organization.

When it comes to HR performance analysis, focusing on a few key talent management strategies can yield significant benefits. Here are four employee performance metrics you should measure at your business: 

1. Quality of Work

Quality trumps quantity—especially when you consider employee productivity. Sure, meeting deadlines is important and does reflect on individual performance, but if what’s being produced is of lower quality, meeting deadlines takes a back seat. Ideally, you want employees who do it right the first time.

How to measure employee performance with quality of work: Measuring the quality of someone’s work is subjective. What and how you measure is very dependent on the industry you’re in and the specific duties and tasks of the employee. One thing to consider, however, is the percentage of work output that is rejected or must be redone. With talent management software you can gain more insight into individual performance by viewing the status of onboarding for new hires,  360-degree performance reviews for existing staff, and more.

2. Employee Efficiency

Measuring employee efficiency is a cornerstone of productivity improvement techniques. It helps in making informed HR data-driven decisions.

An efficient employee is able to maximize their productivity with minimum effort and expense. Costly mistakes are few and far between, deadlines are met and quality of work is not sacrificed. They neither waste time nor effort. Simply put, they get the job done and done well.

How to measure employee performance through efficiency: To measure individual efficiency, try conducting team assessments. Team assessments can provide an in-depth evaluation of a team’s ability to meet goals, as well as identify challenges. Additionally, communicating with the people with whom an employee works on a day-to-day basis can give you valuable insight on how an employee is performing—insight you might not otherwise get.

Is your employee efficiency slipping? Something as easy as encouraging employees to take more breaks or even more vacation can reduce burnout and improve employee productivity and happiness. Employee unhappiness may be contributing to lower productivity levels. Try measuring employee net promoter score to learn how your employees feel about your organization and leadership. Low morale or a poor company culture may be the underlying culprits behind low employee efficiency scores.

3. Training Programs

Evaluating the ROI of employee training programs is essential in assessing their impact on employee performance and overall business growth.

Invest in your employees, and they’ll invest in you—it’s that simple. Learning and development programs are essential to help employees grow professionally, improve their job satisfaction, and reach peak performance. Millennials are now the largest generation in the modern workforce and they are changing the way companies look at training programs. More and more millennial workers have an appetite to learn and grow professionally, and companies need to adapt their L&D strategies to attract and retain top talent.

However, providing formal training, attending professional development events, bringing in industry leaders for lunch-and-learns, and other such employee development opportunities can be costly. And sometimes, training for training’s sake is not a wise use of company resources. Fortunately, the success of those development opportunities can be argued via their return on investment.

How to measure a training program's impact on employee performance: The most obvious metric to measure when it comes to training programs is participation. How many employees are attending your lunch-and-learns or opting to receive formal training?

Then consider the outcome of those training programs. Are employees applying what they learned to their work? Follow-up with individual employees before and after training programs to better assess their effectiveness.

4. Individual Goals

Employee goals speak for themselves. Whether or not an employee is meeting his or her individual work goals can tell you a lot about how they’re performing, even if you’re not able to interact with them on a daily basis. To gain the most insight when measuring work performance, help your employees set goals that are measurable and timely (i.e. set realistic quarterly goals).

How to measure performance against individual goals: The best time to discuss individual work goals is during performance appraisals. Scratch the annual performance review and, instead, meet with the employee in a casual, one-on-one setting on a quarterly or more frequent basis. This ongoing feedback model is the perfect time for managers to bring up performance and evaluate employee goal-setting and achievements.  

While employee performance metrics are a solid starting point, integrating comprehensive HR metrics for business owners into your strategy ensures a well-rounded approach to enhancing workplace efficiency and productivity.

HR professionals are more data-driven than ever before. Employee performance metrics are a great place to start when assessing your employee’s productivity, but they don't tell the whole story. For even more human resources metrics, read our posts on common HR metrics and talent metrics, and learn more about Namely's performance review software to help you take your people data analysis to the next level.

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