Managers cannot improve what they cannot see! And measuring all the things is not a solution either.
Too many numbers turn performance reviews into a charade. The employee performance metrics should provide managers with meaningful input about productivity, quality, progress, and business results.
The problem lies in which metrics to choose, as the evidence must measure actual work and not just activity.
Step 1: What Does Success Look Like
Define the output expected from each role before making a performance scorecard.
Ask three basic questions:
What should this employee achieve? How will we know it happened? What quality threshold have you been hit with?
An example would be a customer service employee who is expected to resolve issues quickly and with a high level of customer satisfaction.
That’s more informative than just counting call volume.
Step 2: How to Separate Activity from Results?
Not every action creates value.
An employee might go to a lot of meetings, write many emails, or keep all day busy. None of these automatically make for a performance boost.
The metrics should measure performance and tangible results.
This can comprise, again depending on the role:
- Completed projects
- Revenue generated
- Customer retention
- Error reduction
- Response times
- Project deadlines met
One right measure will differ from one position to another.
Stage 3: Merged Brief-Time Period & Deep-Time Period Solutions
Monthly targets give instant performance. This might not indicate whether an employee is creating enduring value.
You can use both types of measures.
Short-Term
They monitor continuing production, deadlines, sales, or service levels.
Long-Term
These can monitor customer retention, skilled development, project completion, or improvements during a duration of time.
Having both provides managers a wider scope of progress.
Step 4: Set Achievable Objectives
A target must push but be in the realms of attainable.
When employees think the target is unachievable, motivation can weaken. A target that is trivial could lack value.
Past performance, resources that are available, market conditions. and challenges in a particular role must be considered by every level of management.
Targets should also be re-assessed if circumstances change.
Step 5: Simple Scorecard
It is challenging to manage a complex performance system.
An example of a straightforward scorecard that has four dimensions might be:
| Area | Example Measure |
| Productivity | Completed work |
| Quality | Error rate |
| Customer impact | Satisfaction |
| Development | Skills gained |
The specific measurements should be aligned with the job of the employee.
Step 6: Read the Stories Behind the Numbers
This is probably the most critical component of using employee performance metrics.
A number does not give you information in itself.
The managers should ask why are they have not productivity if production decreased. Was there a heavier workload? A system problem? Staff shortages? New responsibilities?
The aim is to understand, not proceed with automatic judgement.
Keep Improving the System
Business priorities change. Roles evolve. There are some statistics which cease to be practical at one point.
Examine employee performance metrics regularly and withdraw measures that no longer represent material performance.
A good measurement system is not all encompassing. It focuses on those things that matter most, puts them in context and uses the results to help employees − and the business − get better.