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Performance management metrics help evaluate employee engagement and employee feedback. There are many different points of view about what constitutes an effective performance management metric. The main objective is to have a tool that allows employee's strengths, weaknesses, behaviors, preferences, abilities, potentials etc., to be evaluated so they can continuously improve upon their skills and talents.
According to the Society for Human Resource Management (SHRM), 7 performance management components should be considered when assessing employee performance:
“Performance management metrics aren’t just historical, but they are also forward-looking projections so that managers can know who has a positive trajectory.”
While individual employees may have different strengths and weaknesses, some general pros and cons can be said about all performance management KPIs. For example, according to SHRM, traditional performance management metrics such as employee attendance and employee behavior may be the most widely used.
On the other hand, more modern/innovative performance management metrics are typically seen in small businesses because of cost-effectiveness. Traditional performance indicators are general enough to be assessed across many different industries or job positions, while some newer ones are industry-specific.
Pros of traditional performance management key metrics
Cons of traditional employee performance management metrics:
However, if implemented correctly and promptly, these can be considered minor issues that should not overshadow the many benefits of business performance management, including company loyalty and employee productivity. An article by Dow Schofield Watts that discusses how employee satisfaction is fundamental for business success notes that satisfied employees are more likely to stay with a company which reduces training costs resulting from employee turnover. In addition, satisfied employees contribute to proper work ethics within an organization leading to employee retention and better performance.
Small and medium businesses may not have the budget or time to implement a perfect, foolproof performance management technique; however, there are ways they can mitigate employee anxiety within an organization without breaking the bank.
A well-intentioned employee will recognize that any feedback received following a performance evaluation is given with good intentions and is likely to help improve their work output. On average, employers spend $500 per employee when evaluating employee performance. That does not mean it has to cost upwards of $500 for employees to take evaluations seriously; rather, managers should focus on putting in place basic tools that allow employees to see how they can improve upon their weaknesses and build
Smaller companies usually have few employees, which makes it easy to track employee feedback, performance etc. Medium-sized companies, on the other hand, might have many more employees. However, there might still be a large enough employee base at each location or department so that employee feedback can still be collected if required. However, some larger organizations with lots of employees may not quickly assess all employee performance feedback due to time constraints. This is why it' s important to have employee performance feedback procedures in place so employee morale, motivation and productivity are not affected.
One major benefit of employee performance management KPI is that it can increase employee's focus, passion and loyalty towards the company. It may also help to improve employee satisfaction which is linked to employee retention rates. Employers will find these actions useful to identify which employees need more training or improvement in areas where they are weak.
Some downsides of using these performance management metrics are that some employees might tend to exaggerate their performance abilities. In contrast, other employees might try not to perform well, so they don't get fired or promoted - this could potentially result in legal issues for employers if they act on false information given by an employee.
This is why employers need to provide employee feedback and performance management metrics to know their strengths and weaknesses. It's also important to make employee performance management metrics accessible to employees so they know the employee performance levels for each employee to improve employee morale, motivation, and productivity.
Employee performance metrics have been identified as a very effective employee performance management tool that makes employee feedback and appraisals more accurate. Performance management metrics are a great way of providing ongoing employee feedback so employees can always know what areas they need to improve on and what areas they excel in. The employee assessment should include employee strengths and weaknesses and suggestions on improving their skills.
Another example is that there could be a formal process for employees to provide peer feedback (employee self-assessment) so they know what they need to do better in the future. Some employers use 360-degree feedback where employees provide peer feedback as well as manager feedback for one another. Other examples of performance metrics/KPI used by businesses include:
Here is a list of employee performance management examples that can help in employee retention.
Letting your employees know their values in the team and how they are responsible for every result through a fast and continuous feedback mechanism is a sure way to improve employee performance. Matter's free Slack app offers you just the right tool and feature to do this. Managers and employees can give and request feedback within few clicks. Get yours now; it’s free.