Employee performance is the fuel that powers an organization. It can be a great asset or a liability, depending on how it’s managed. While unengaged team members might keep your business (barely) chugging along, a company culture that values and supports employee productivity is capable of building additional momentum that helps achieve and exceed company goals.
Enhance the employee experience, identify growth opportunities, and improve the quality of work by implementing a strategy to measure employee performance to help every team member reach their potential as a top performer.
What is employee performance?
Employee performance is essentially how an employee works, with a focus on the quality, consistency, and efficiency in which they perform their primary job duties and tasks.
Work performance includes several different aspects, including individual employee skills, time management, communication, collaboration, and the ability to set goals and meet deadlines.
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What does employee performance really mean?
Aside from the obvious (as an indicator of output), employee performance also reflects how employees feel about their work environment and hints at their level of job satisfaction.
When employee needs are being met, productivity – and consequently, profitability – improves. Requesting employee feedback and implementing relevant suggestions can improve the overall performance of your team and your organization as a whole.
How does employee performance affect the company?
Employee performance is the foundation of everything a business is and does. Underperformance can affect more than your bottom line; it can lower team morale, damage brand reputation, and make it more difficult to recruit and retain top talent.
Conversely, a high-performing team can optimize, collaborate, and innovate to reduce costs, boost profits, improve the workplace experience, and outpace the competition.
In many ways, work performance has more of an impact on an organization’s success than the actual product or service provided by the business, making employee performance management a valuable investment.
Read more about evaluating and improving employee performance:
- Measuring employee data and taking action
- Building a high performance culture
- Tailoring your management strategy
Measuring employee performance
So, how do you measure something as subjective as performance? After all, performance goes well beyond simply turning in adequate work on time. The ability to work efficiently, collaborate with co-workers, brainstorm creative solutions, produce quality work, and embody the core values of your organization are all important aspects of performance that would be neglected if an evaluation was solely based on meeting metric-based goals.
To get a big-picture perspective, consider using a variety of sources when gathering information for a performance evaluation. Managers, supervisors, and team members are all excellent resources for objective opinions on productivity, communication, collaboration, and quality work. Asking employees to do a self-evaluation may also offer helpful insight into their strengths and weaknesses.
Check out this webinar to learn more about performance management:
What factors influence employee performance?
The most important aspect of performance improvement is understanding what motivates employees to work the way they do. There is a long list of external factors that have the potential to impact employee performance. But when it comes to what an employer can control, there are three main areas of focus:
Company culture
Your company’s core values should be clear, modeled from the top down, and should support performance. Emphasizing attributes like helpfulness, communication, intellectual curiosity, reliability, and a love of learning can help establish a high-performing atmosphere.
Employee environment
A positive workplace culture that values individual employees and supports a healthy work/life balance pays off through performance. Build employee confidence with trust, empathy, transparency, and quality leadership.
Training
Make sure your employees are equipped with the knowledge and skills necessary to do their work well. Prepare new employees with training and mentorship beyond onboarding, and help your team expand their core competencies with upskilling opportunities.
Improving employee performance
Aside from investing time and intentional effort into training, a positive work environment, and a strong company culture, consider the following suggestions to help improve employee performance:
Find the right fit.
Implement a talent management plan to assign employees to positions and projects that align with their skills and goals.
Support employee development.
Provide growth opportunities such as education, mentorship, and training that support their desired career path.
Set clear goals.
Make sure that performance expectations and goals are measurable, and explicitly stated.
Empower and inspire employees.
Encourage leadership to be generous with acknowledgment and appreciation. Recognition is a powerful motivator.
Prioritize communication.
Employees need to be informed and updated in order to do their jobs well, and innovation is impossible if communication isn’t a two-way street. Improve engagement by soliciting feedback and encouraging collaboration.
Additional resources on improving performance:
- The CEO’s guide to performance management
- Motivating employees to perform
- What is employee engagement?
- What performance Is and how to measure It
- The role of engagement in job performance
- Creating a culture of employee engagement in the workplace
- How to improve employee performance
Conducting effective employee performance reviews
Performance reviews are an important part of creating awareness and accountability about expectations, current performance, and potential areas of improvement. Add more value to performance appraisals by incorporating the following elements:
Establish performance metrics.
Although it can be difficult to quantify performance, creating a performance rating scale or rubric makes it easier to compare or measure improvement.
Assess core values.
Reinforce your company’s core values by including them as part of the performance review process.
Ask for their input.
Invite employees to evaluate their own performance by asking what they consider to be their recent professional achievements, how they think they could improve, and about their own short- and long-term goals.
Create actionable next steps.
End your reviews with a list of actionable next steps based on your meeting notes. Define objectives and key results (OKRs), identify new goals, or create a plan for the employee to pursue growth opportunities.
Keep communication open.
Feedback should be an ongoing process. Although one formal annual review may suffice in some cases, frequent check-ins can give employees the time necessary to adjust and improve.
For more information about optimizing your employee review process, check out the following resources:
- Why your company is fumbling with performance feedback
- How to make a performance rating scale
- Five new ways to evaluate your employees
- Addressing states of engagement and performance
What to include in an employee performance review
The criteria used to evaluate an employee’s performance will vary depending on the organization and the position, but regardless, it should be clearly and consistently established. Ask yourself what matters most to your organization as you develop your performance review strategy.
Are you evaluating employees strictly on quantifiable metrics. or will you include intangibles? If you choose to evaluate beyond earnings, deliverables, or outcome-based metrics, you might include criteria such as:
- Leadership
- Drive
- Initiative
- Team management
- Communication
- Core values
There is no one-size-fits-all method for evaluating employees. Consider your company culture, organizational objectives, and team expectations to develop a performance appraisal model that works best for your business.
Learn more about how to optimize your employee performance review process:
