How to Measure Performance

Last Updated: March 29, 2019

Measuring the performance of your employees is a necessary measure. If you need to improve business or simply build upon current success, it’s a process that can greatly impact operations. There are a wide variety of ways in which performance can be measured, whether individually, as a whole, internally, or from an external perspective. If you are looking to measure employee performance in your company, consider a variety of industry-accepted approaches.

Method 1

Method 1 of 4:

Performing a 360 Degree Evaluation

1
Gather appraisals from subordinates. Ensure the appraisals are anonymous, so the employees have no fear of reprisal. A 360-degree appraisal has the benefit of accurately assessing a manager’s ability to manage and lead.^{[1]
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Research source} Something similar to one of the following items could lead subordinates to open up about their supervisors:
- ”Do you feel your supervisor does a good job leading the team?”
- ”Give an example of where your supervisor could improve his or her leadership style.”
- ”Provide an instance where your supervisor excelled in his or her job.”
2
Perform a self-appraisal. Self-appraisals are a great option. Employees are given the opportunity to appraise themselves. An employee is likely to look at their own strengths and weaknesses differently than others. Most will overstate their performance. The major benefit to the 360 evaluation is that the self-appraisal is complemented by the mix of ideas from other evaluations. ^{[2]
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Research source} Leading questions like the following can help an employee delve deeply into their performance:
- ”What situations have you excelled at in the past?”
- ”What are some examples of when you could have used time more wisely?”
- ”What will your fellow employees, from supervisor to subordinate, say about your performance?”
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3
Collect colleague feedback. Feedback from your peers helps you improve at your job because they know the type of dedication and work that is required for the position. Colleague assessments are particularly adept at helping an employ who is analyzing their positives and negatives^{[3]
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- ”Where does your colleague rank in comparison to others with a similar position?”
- ”How can your peer improve his or her performance?”
- ”Provide an example of how your peer has shown job competency.”
4
Compile supervisor evaluations. Superiors typically provide an overhead view of employees’ roles, responsibilities, and work quality. They also assess employee production. They would best know whether an employee is ready for a promotion or demotion, based upon their quality and output. ^{[4]
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Research source} Questions similar to the following may work well from a supervisor perspective:
- ”Do you feel the employee performs satisfactorily?”
- ”In which way could the employee improve their job performance?”
- ”Why or why isn’t the employee ready for advancement?”
5
Understand the limitations of 360-degree evaluations. 360-Degree feedback methods are very subjective and responses generally depend upon the relationships between the appraiser and appraised. Accordingly, you should never use a 360-degree appraisal as your only appraisal method.

Method 2

Method 2 of 4:

Conducting Performance Measurement

1
Use quantitative measurements. Performance appraisals of this type are typically subjective, rather than objective. They are most valuable when objective criteria such as as production rate, cycle time, cost, and error rate are used. Each department should have its own quantifiable measurements so work can be compared to pre-determined standards, group norms, trends, and employee-to-employee. Collect the data systematically, and determine if the guidelines being used to conduct business are adequate.
- For example, you might track the amount of time a customer waits in line.
- Regularly document the number of items or reports an employee can produce in an hour.
- Be sure to clearly communicate performance measures and expected performance to employees before measurement begins. Training in this areas might be required.
2
Compare quantitative plans, goals, and results. When the data collection begins, set plans and goals for job performance. Once the data has been collected, measure it to see if your goals were achieved. If not, a baseline can be established and used to set goals for improvement throughout the organization.
- If customers typically wait in line for 3 minutes before being addressed, strive to lower the customer response time.
- Conflict resolution through customer support can be a daunting task. Once you know the amount of time a typical call takes, it can help your company streamline the process by identifying which calls take longer.
- Use percentage-based quantitative improvement goals. If the company sold $500,000 worth of product last quarter, attempt to increase sales by 1%.
3
Use measurements to create a plan of action. Progress must be measured and acted upon. If a performance measurement is lacking, periodic measurement needs to occur to ensure progress is being made. The measurements also serve to determine whether or not the plan of action is working.
- Utilize exemplary programs to serve as a guide for those that are lacking.
- Do not hesitate to change a plan if measurement shows no progress is being made.

Method 3

Method 3 of 4:

Ensuring Work Quality

1
Evaluate employee work quality. Performance of employees reflects upon all facets of their work, from work ethic to individual achievements. This method of assessment would look at each employee as a whole on an annual basis. This assessment would provide suggestions and an opportunity to improve, while recognizing any excellence.
- How much an individual is able to produce either in product or sales.
- The quality of work produced.
- How quickly an employee produces a product or makes a sale.
2
Conduct comprehensive employee assessments. Comprehensive evaluations may help identify potential solutions, particularly if your company is undergoing problems. However, it is more common that problems result from poorly designed processes, inadequate training, or poor management. Generally, a review of the entire process, with inputs, outputs, actions and deliverables, is required to resolve complex or complicated problems.
- Hiring a professional assessor who can impartially appraise the everyday functionality of your business, as well as the performance of your employees, could be very beneficial.
3
Establish random quality control checks. The obvious benefit to this approach is that your company employees may be aware of the checks, but they won't know when checks will occur. Consequently, employees that are slacking in some way or not performing to par will be exposed. Try a few different approaches so employees are on their toes.
- Perform random spot checks on products.
- Randomly review phone calls.
- Inspect log books at random intervals.
4
Solicit customer feedback. Client satisfaction should be your ultimate mission. Customer service experience can be used as a way of assessing employee performance. Ask customers if they are satisfied with their product or service. Getting an outside perspective on performance is smart, as it offers the potential of an objective analysis.^{[5]
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- Be cautious of overly harsh customer feedback. Some industries and businesses, such as repossession of vehicles, is bound to have overly negative reviews.
- Develop feedback tools or forms so the feedback can be standardized and weighed equally.
- Customer feedback is always subjective and generally only from those customers with bad experiences. Balance any review with objective measures of customer service, such as time on hold, resolution of problems, and call-backs.

Method 4

Method 4 of 4:

Gauging Time Management

1
Measure time spent on particular tasks. One way to measure time management is to assess the time and employee spends on a project. However, you should only use those measures that can be collected automatically such as time cards or computer software. For most jobs, manual reporting, such as entering data into a timesheet, is neither reliable nor cost-effective.
- There are multiple software programs that can track what is being done on a computer. This way, you can investigate employees who are not meeting performance standards to see what they are having trouble with.
- If specific employees are falling far below the average, they can be singled-out and helped to meet the performance requirements.
2
Give regular, but not too frequent, feedback. While feedback is important, daily monitoring is a two-edged sword that can be a morale buster. It also shifts performance responsibilities from management to a tool. It's better to use weekly or monthly measures. In addition, use bonuses instead of humiliation to encourage employees, and keep individual performance figures confidential.
3
Note lapses in workplace decorum. One manner of measuring performance is to make note of how an employee adheres to company policies. To monitor these lapses, try the following methods:
- Monitor punctuality issues. Employees who are habitually late are naturally missing minutes they could be working. What’s worse, they could be upsetting other employees.
- Check for dress code violations. An employee that is relaxed on their professional appearance is likely to exhibit the same approach to their actual work.
- Clarify usage of workplace items. Be sure employees know how and when they may use company items like a car, cell phone, or computer. Employees abusing company materials are not using time wisely.^{[6]
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