Performance measurement is a process of quantifying and assessing the effectiveness and efficiency of a program, project or an initiative.
The purpose of performance measurement is to understand how an individual or an organization is performing and identify the areas of improvement. The data collected hence provides feedback for the employer as well.
In this article we’ll discuss:
An employee’s performance can be measured using several different methods. Most common methods are:
- Key Performance Indicators (KPIs)
Key Performance Indicators offer a way of measuring how a company or an individual is performing (or responding) in context of the key performance areas (KRAs).
It is a metric system used to evaluate the effectiveness of the activities to communicate the results for an informed and strategic actions.
- Performance Appraisals
Performance Appraisal is another process that the organizations use to assess and evaluate the employee’ job performance.
The process involves analysing the information about an employee’s strengths, weaknesses, and areas of improvement that are relevant to the organization’ needs.
- Benchmarking
Benchmarking, otherwise known as ‘Performance Benchmarking’, is the process of comparing, measuring and analysing the organization’ service, products and performance against the competitors in the industry.
It helps the company explore the area of improvement and work on it. Not only that, but the company also identify their strengths and weaknesses and discover new opportunities. Benchmarking is usually performed in finance, employee efficiency and customer satisfaction.
- SMART Goal Settings
SMART goal settings is a framework that is used for creating goals that are Specific, Measurable, Achievable, Relevant and Timely. SMART is the acronym outlining the goal setting’ process. The main objective of using SMART goals is to build trust among the managers and their employees.
- Upon breaking down the acronym,
- Timely or time-bound goals are deadline or time centric. It provides a sense of accountability, urgency and responsibility among the employees.
- Specific goals are clear and concise. They are specific, not vague. Specific goals outline and answer the exact questions of Who, What, When Where and Why (the 5Ws) and provide a clear understanding.
- Measurable goals can be tracked and are measurable, as the name suggests. They show if the employee is falling behind, keeping up or is ahead in achieving their goals and identify the strengths and potential of the employee.
- Achievable goals are realistic goals but can be challenging. Though these goals can be achieved provided the resources, tools, skills, etc.
- Relevant goals are relevant, as the name suggests and align with the company’s objective, goals and responsibilities. These are important as they keep employees concentrated and contribute to the long-term goals.
- Customer Feedback
As per the HubSpot, “Customers are, more often than not, willing to talk about your business. When they do talk, the information they share is called customer feedback.
“To understand it simply, customer feedback is the information, opinion, review or suggestions shared by the customers about their experience with your company’s products or services.
Customer feedback is considered important as it holds up a mirror to the company reflecting their issues, expertise, and areas of improvement.
Companies may look into the issues concerned and take up strategies that may seem feasible. This method can also prove as one of the effective methods for performance measurement.
- Self –evaluation
Self-evaluation or self-performance review is a written document where the employees themselves state what they think of their performance, work and their goals. Not only that but it also serves as a tool that allows you to move further in your career and look for opportunities by analyzing your own work and strengths.
- 360 Degree Feedback
360-degree feedback, or multi-rater feedback is an employee evaluation method that collects feedback or input from different sources from people who have a working relation with the employee.
These may include supervisors, peers, and clients as well. External parties or stakeholders such as clients or suppliers may also participate.
360-degree feedback is basically a tool used by employees to receive feedback from their managers and peers. The process may vary from company to company.
An administrator invites 6-10 entities to complete an anonymous online feedback form.
Employees are also given self-evaluation forms to judge their performance.
The reviewers’ responses turned into a report presented during the 360-degree feedback.
Using this report, the employee and reviewers discuss the former’s performance. They also suggest ways to increase their efficiency and productivity.
A follow-up plan is set to monitor the employee’s performance in the long run.
Employee Management
The employee management system involves monitoring and coordinating the reports and resources to boost the performance and productivity of the employees. Performance management includes a number of functions such as hiring, training, performance evaluation, feedback, communication, rewarding improved performance, etc.
Employee management asks for effective strategies and leadership skills and human resource management. Creating a system, procedure and policies that support employee satisfaction and aligns with the company policies is the motive. Organizations may create a highly productive, engaged, and driven staff that fosters innovation, accomplishes company goals, and maintains long-term success in today’s competitive market.
Key Takeaways
Performance measurement is a process of quantifying and assessing the effectiveness and efficiency of a program, project or an initiative.
The purpose of performance measurement is to understand how an individual or an organization is performing and identify the areas of improvement. The most prominent methods used for performance measurement are KPIs, Performance Appraisals, Benchmarking, SMART Goal Settings, Customer Feedback, 360 Degree Feedback. It requires careful planning and communication to implement the process fruitfully.