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How to Measure Employee Performance in the Workplace

August 24, 2023
Female office manager reviews employee performance reports with a colleague.

The thought of a performance review can be anxiety-inducing for employees, but it doesn't need to be. When employee performance measurement is linked to relevant goals like career development and business goals, it can minimize the feeling of being scrutinized and instead be celebrated as a way to unite across the organization to succeed together. A healthy employee evaluation process can even lead to greater profits and can improve employee satisfaction.1

So how do you implement a way to not just track your employees' performance but improve employee performance as well? Keep reading to learn how to establish goals, choose the ideal methods for tracking performance and how to implement career development plans to empower employees and improve company culture.

Establishing employee development and performance goals

Goals are an important motivator. Measuring employees' work gives them set parameters so that they understand performance expectations. Proper goal setting can boost employee engagement, which in turn improves the individual employee performance that will benefit the organization as a whole.2

Consider employee and organizational needs

Employee development goals should always be based upon business goals. While that might be obvious when an organizational goal is something like, 'increase sales,' it can be more difficult to pin down individual contributions for things like 'position the company as an innovative industry leader.'

But not all employee goals have to be directly in line with those larger encompassing company goals. Consider the professional development of your employees to be one way to bring new skills to the company and encourage employees to find avenues for growth that can also help the organization. Can you offer workshops on building leadership skills, or cover the tuition fees for a department interested in a class to help them earn professional certifications? Ultimately the goal with monitoring employee performance and development should be to foster engaged employees who are happy and properly skilled to take on the challenges of company growth.

Setting SMART goals

When creating goals, it's helpful to have some sort of outline to follow. The SMART (specific, measurable, achievable, relevant, time-bound) goal-setting method is widely used and recognized as an effective way to create strong goals.

SMART goals are:

  • Specific - The stated goal includes everything that's supposed to be accomplished with who, when, and where.
  • Measurable - Meaning the goal can be tracked by indicators of success.
  • Achievable - You need to make a goal attainable and realistic, which helps keep motivation.
  • Relevant - A goal should be aligned with the vision, mission, and priorities of the employee and the organization.
  • Time-bound - A goal should have a set amount of time by which it should be achieved to help team members to take action with an intent to achieve the goal.

To effectively set SMART goals, care should be taken in planning to include collaboration and communication between all relevant parties.3 Give employees plenty of time to reflect on company goals and figure out ways they could help meet them. Then allow a period for meetings between team managers and their team members to discuss goals and make sure they're meeting both business needs and the employee's own interests.

Identifying key employee development metrics

Goals aren’t helpful without metrics and employees need indicators to know when they are progressing. The metrics you choose to measure could be subjective or objective but it's key to have both. Some standard metrics might include: project outcomes, quality of work, efficiency and volume of output. But these are all still relatively vague until related to each role at your business. Work with the HR managers at your organization to clearly define the evaluation metrics that employee development and performance will be based on.

Methods for measuring employee development and performance

Depending on the types of goals being set, there will be different methods to measure each employee's development, including:4

  • Graphic ratings scales
  • 360 degree feedback
  • Self-evaluation
  • Checklists

Tracking performance helps employees and the organization understand how employees progress and how successful they are and also helps identify growth opportunities and areas for improvement.

Employee development plans

An employee development plan is a key piece to measuring performance and outlining goals. It can be an excellent tool to outline an employee’s professional growth within an organization.6 An employee professional development plan, not only maps a successful employee’s trajectory at a company, but it also helps the employee see that the company is investing in them and their career development. It helps them know they are thought of as an actual person and not just a “cog in the machine.” Fostering a company culture of engagement and professional development could be key to employee retention and a method to attract job seekers.

Go in-depth on strategies for creating an effective employee development plan with Marquette University's guide to creating effective employee development plans. Inside the guide, which is free to download, you'll find advice for preparing employee development plans, an employee self-assessment outline, ideas for development plan activities, suggested metrics to track employee engagement and more.

Performance reviews

There are benefits of regular performance reviews. From the employee’s standpoint, there’s a sense of consistency. They know when they are evaluated and they know what they are being evaluated for. From an employer’s standpoint, this offers a snapshot on the investment in their people. Employers can learn what to work harder on and identify the star players in their organization.

Companies who opt-in for the self-assessment may have a 1:1 with their employees discussing what the employee thinks of their own performance and another 1:1 about what their managers think. Again, the reciprocity of this kind of review works in favor of the company. The company is truly investing time and energy in their employees.

It’s also important to be aware that any performance issues that come up in the review process can be daunting. Most people don’t inherently enjoy receiving criticism, and many can be uncomfortable providing negative feedback. In these instances, it’s best to keep all feedback and criticism constructive. After all, what good is feedback if there isn’t room for growth within it? It’s also a good idea to frame the conversation with your employee around what they should start, stop, or continue doing. Through these three areas, the employee will get clear direction, especially when you provide the ‘why’ behind why you want these changes to happen.5

Pursue your own professional development with Marquette University Business online

Step up as a leader who makes a difference in the lives of employees. Develop your own career with Marquette University’s online MBA or online Master in Management. Both programs offer the flexibility to continue to work and live your life while getting closer to your career goals. You’ll learn the same critical business skills that you would in the on-ground programs and have the opportunity to meet one-on-one with Marquette’s expert business faculty. You’ll also have access to the Business Career Center to help you with interview prep, job hunting, professional development opportunities and more. Plus, you’ll be able to connect with the Marquette alumni network of 110,000 and growing, that spans the country. For more information, schedule a call with an admissions outreach advisor today.