The field of human resource management has embraced the trend towards quantifying employee productivity and performance. Most commonly, this takes the form of measuring an employee’s work output over time, checking work quality or a mixture of both. This is essential for measuring employee performance. Any organization should be able to gauge employee performance as part of an ongoing assessment program. However, trying to quantify people is seldom straightforward. It is a mistake to treat people in the workplace the same as any other business resource. Individuals have different methods of working, and this makes a “one size fits all” approach to performance metrics impossible. It is important that the data gathered on employee performance is meaningful and useful as an analytical tool. There are some key points to note when developing a set of employee performance metrics.

Aligning Metrics with Organizational Goals

Rather than recording arbitrary data, the criteria used should reflect the organization’s goals. For example, if the goal is good customer service, this should be the criteria by which employees are measured. Call centers are often examples of the application of poor performance criteria. Staff is often measured on the volume of individual calls that they answer; however, this can encourage them to cut calls short to increase their personal volume. This can adversely affect the customer experience and reduce confidence in the business. It is far more useful to apply a range criterion, including call quality, to help maintain high service standards.

Employee Performance Metrics Are a “Soft” Analytical Tool

Leading from this, there are increasing examples where performance metrics are set as employee goals. Failure to achieve these targets may even result in disciplinary action. Performance metrics are seldom a hard indicator of employee performance; however, they can be used to gain an insight into areas of improvement for each employee. As well as aiding employee development, they can also help managers to understand where their employees’ talents lie.

Productivity and Quality Are Not Separate Concepts

Jobs are increasingly hard to measure. In many roles, there are often no clear indicators of what constitutes “performance.” While it is tempting to measure the amount of work completed by an employee in a given timescale, this might not give an accurate picture of an employee’s output. In jobs where accuracy is important, mistakes can reduce productivity by creating extra work. Those with a reduced output but a high level of quality may actually be the most productive employees. The ability to prioritize is also a valuable attribute that should be taken into consideration. An organized approach to work results in greater efficiency over time.

In Summary…

Maintaining flexibility with employee performance metrics is critical to maintaining employee motivation. The application of rigid productivity requirements risks invoking the observer’s paradox. If employees feel as if they are under scrutiny, they may forsake good working practices to meet these criteria. If the system appears punitive, this can also undermine motivation, leading to absenteeism and increased staff turnover.
A flexible metrics system that reflects company values provides a guide by which staff can develop their careers. It also makes allowances for individual approaches to work, allowing organizations to best harness their employees’ talents.