Ways of Measuring Employee Performance

How can you find out and be certain that your workers are as productive as your business requires them to be? Not measuring your employee’s performance can result in some serious trouble, perhaps much more serious, than you can imagine.

In case you aren’t able to define productivity of each employee, the simplest implication would be you not knowing which of them deserve a salary appraisal, which of them are more responsible and which of them should be demoted or even fired. Even though the measurement of employee performance is not an easy task, it’s in your own interest to find a fruitful way of doing it.

The thing is that you won’t ever be capable of building a high-performance business without telling good employees from average employees. And, if that wasn’t obvious from the start, great employees always stand out.

They are easy to spot out. But, it’s much harder to identify good employees. Results of their work are a lot more subject to incompetent resources, obscure priorities, and unexpected issues.

The thing is that good employees are going to try and do their best, even if the results of their efforts don’t meet your expectations. But, how do you discern if the poor outcome is the result of poor efforts or is caused by being put in an originally losing position?

When it comes to measuring employee performance, it’s about landing a system or framework that reduces the effect of personality or emotion to the minimum. Personality factors are a thing to be reckoned with, as managers tend to give lower scores to workers they don’t like during employee reviews.

And it is safe to say that this is one of the biggest complaints that workers have regarding employee reviews and appraisals. You don’t want any human factors to get between you and your business, thus you need an objective system or framework that incorporates actual metrics for measuring your employees’ performance.

Conventional Employee Performance Measurement Tools

Many companies nowadays use one or more ways to measure their employee performance. For example, such companies as Google and Adobe have developed their own employee appraisals to boost productivity and cut the fat, so to say.

There are also such things as performance ratings and OKRs that are widely used by businesses in a wide range of market niches. Let’s take a brief look at them and how they could be used to measure employee performance.

Objectives and Key Results (OKRs)

Objectives and key results (OKR) system is a tool used for setting, communicating and monitoring an organization’s objectives in a way that all workers are moving in one direction towards them.

Many modern companies prefer using OKRs to measure employee performance, because it supplies a practical, simple, and clear framework for determining, monitoring, and measuring objectives.

This way managers can view company goals as something employees may aspire to as well as something measurable at the same time.

While OKRs work well for some companies in terms of goal awareness, focus and prioritization, and measurement accountability, there are particular shortcomings that can become a serious issue and have a serious negative effect on the company’s productivity.

First of all, it’s quite expensive to integrate an OKR-based system, since, in order for it to work, each worker has to fully comprehend how the OKRs work, which means you’ll need to spend a good deal of time and money on training both your managers and workers to get the full grasp of the system.

Secondly, OKRs can be too restricting in terms of objectives and priorities, as business environments, especially when it’s a startup, should be flexible and be able to adjust their goals and priorities according to the current situation. Either way, even the proponents of this system note that OKRs may not be the best way to measure employee performance for startups.

Employee Appraisals

Employee appraisals is perhaps one of the most frequently and most broadly used ways of employee performance measurement. There are various ways of handling employee appraisals and the good thing about them, which is a clear lack in OKRs, is that they are flexible and you can adjust them to your current situation. Moreover, you can make an employee appraisal focused on one particular position or set of skills.

It is safe to say that employee appraisals have established themselves as one of the surest ways of employee performance measurement and they are here to stay for a while, at the very least.

But, you can also say that this can result in holding your business down, because it has a lot to do with the human factor. So, even though, it’s one of the most widely accepted and recognized ways to measure employee performance, it is also considered a sort of a relic by the more progressive managers.

The major and the most significant disadvantage of employee appraisals is personal bias. Managers are humans and they may like or dislike their employees.

This results in inadequate reports and feedback, because due to the bias, they provide better appraisals to the workers they like and worse appraisals to the workers they don’t like. It’s a simple shortcoming, but one that has a long-lasting and serious effect on any business. You need great employees and not a club of friends.

Performance Ratings

Performance ratings is another performance management tool that is used by many companies all around the world. Performance ratings can be assigned either by one manager or a group of peers and supervisors.

Usually ratings are set on a scale of either 1 to 5 or 1 to 10. Thus, performance ratings provide managers with a quantifiable figure that can be used to compare workers with each other and use as a company average that may be tracked over various periods.

The shortcoming of performance ratings, however, is that they are as well subject to personal bias with all the consequences described previously.

Data-Driven Performance Management

Now, the world moves on and so do businesses with all the things related to them. Over the past few years, the market has seen the rise of the so-called data-driven performance management.

This is a new way viewing goals, perspectives, skills, and all things performance that shows some really promising results, especially when it comes to startups.

In a nutshell, data driven performance management is simply a process that heavily depends on informed decisions and judgements regarding managing employee performance based on factual data. It is meant to bring worker’s strengths and weaknesses to the forefront in the most objective way possible.

This allows to go around all the biases that direct reports, peers or managers could have. Data driven performance management draws on the fact that an employee might be good or bad at particular aspects of their job, so their performance should be measured with this in mind.

Using data driven analytics for employee performance management allows large amounts of data to be translated into useful information regarding the ways employees have performed over a particular period.

Comparing to conventional employee performance measurement techniques, data-driven performance management is one huge advantage. It provides reviews based on data, rather than on manager’s feelings or preferences, as we’ve already mentioned: it allows avoiding personal biases.

Moreover, you can use it to overview activity history and get a clear understanding of what exactly was withholding an employee from accomplishing their goal successfully. In general, this is an agile performance management tool that allows for continuous performance measurement.

That is, you can evaluate an individual continuously and see how they at any given point in time during their work in your company. In most other cases, you will only be seeing whatever an employee does right before the review.

There are quite a few data-driven performance management tools out there: Upraise.io, Gitprime.com and Waydev.co, to name a few. All of them provide what was described above – a data-driven way to evaluate your employees’ performance, avoiding personal biases and providing a broad perspective on one’s skills, achievements, and progress in your company.

And while there could still be some disadvantages and even some kinds of biases in these systems, this technology is developing at an ever increasing pace and it’s just a matter of time, when it gets rid of all the issues and will only have cold hard data to work with in terms of employee performance management.

Get on the Vectorly Train!

We have reviewed some of the most popular and widely used ways of employee performance measurement. We have looked into some of their advantages and disadvantages.

The more conventional ones are the most biased, while the newer ones seem to be completely void of whatever makes people working with each other fun. That’s right – fun. This is an important part of any productive work in the modern day and age. If you want your employees to be productive and achieve their objectives successfully, they should enjoy their job.

And this is where Vectorly comes in!

We simply offer you a platform that provides you with the best employee performance management techniques and progress monitoring. That’s right – we have developed a platform, using which you can see how your employees do with their day-to-day tasks, but you can also set some learning in motion and monitor their progress in learning new skills.

If you want to check out Vectorly and what we have to offer, come visit us at vectorly.team and sign up for a free trial. If you’re a startup, this definitely is what you need for your employees’ growth and proper understanding of what’s going on in your team, and if you’re a large company, you can make informed decisions regarding your workers based on actual data.

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