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How to measure employee performance and set targets for your staff

Among the several key HR functions, such as staff selection, adaptation, training and internal communications it is fair to highlight one of the main ones that is called personnel evaluation. What exactly we are evaluating and why? Let's discuss which criteria we will use during the process of staff evaluation that will help to discover effectiveness of each employee.

...Imagine a company manager, whose main task is customer service. To measure manager’ performance top manager needs to find clear criteria of efficiency of her work. This can be a number of incoming calls, during which manager spoke in a polite tone with customers. Thus, if he speaks with 100 customers in a very polite manner, company will definitely get more potential orders and, thus, more profit. Therefore, the number of calls will be criteria of manager’s effectiveness and management can conclude that the staff member is the best match for this position...

The example shows that efficiency is a characteristic of the use of labor resources, measured as the ratio of the objective results achieved by the employees, the cost of managing them and company in general. Using these evaluation criteria, we were able to judge employee’s effectiveness. It is obvious that for regular staff evaluations, there is a need to create a list of fixed parameters or introduce a so-called KPI's or Key Performance Indicators.

When we set up company KPI's for all positions, this means that each staff member knows what are the criteria of work to be assessed, as well as, what quantitative indicators he/she needs to achieve to get the promotion/bonus/additional projects.

With the implementation of KPIs, employees clearly see the scheme of achieving the goals set. At the same time, company gets a simple and intuitive tool to fulfill its strategic plans at each level in the organization. After all, company’s management can easily change/correct KPI's in order to achieve the desired results.

There are evaluation methods, assessing only the results achieved with help of key performance indicators, or, for example, only the level of competences development. But more often companies use more complex and extended approaches, which are more effective.

Evaluation methods

Today one of the most reliable methods of evaluation is Assessment center. Practically every big international company employs this method to evaluate personnel.

Combinations of several different procedures that can improve the validity of measurements within the assessment center are:

· Competency interview and case studies, during which data is being collected on knowledge and experience of the employee, his/her psychological qualities and abilities;
· Psychological, professional and general tests;
· Business game, in which a group of employees or candidates casts a business situation;
· Biographical questionnaires;
· Expert supervision and based on its results evaluation team preparing recommendations for each employee.

Despite the complexity and requirements that apply to this method, the assessment center is very actively used by international companies and continues to be the most valid and reliable method of assessment.

As a simpler alternative, some companies use a circular evaluation by 360-degree method. Employee’ work is assessed according to the same criteria by several groups of people with whom he/she interacts directly in daily activities. It can be: managers, subordinates, clients, partners and colleagues.

Thus, we obtain the estimation of professional qualities of the worker, from different angles. That gives the opportunity to understand how worker is perceived by different groups of employees, to quickly identify the problem, if it exists at some level, and further to influence the situation.

The results of employee’s evaluation are presented as an individual development plan. During the meeting with the company’s HR Manager, employee becomes familiar with results of evaluation, later, he will be offered options of special training and further development. For example, employee consciously starts working on self-esteem, turning it into healthy ambitions or pays special attention to interaction with the most problematic group of respondents. And company’s management will be able to observe employee’s further evolvement and continue to set new, more interesting goals.

As for advantages of 360-degree evaluation, it’s carried out regularly and participants as well as top management have opportunity to observe the dynamics of employees’ development within the company. Plus, with necessary software, this method enables to relatively easy collect the required data. Also, there is no need to involve highly paid professionals. Amongdisadvantages, it has a significantly lower reliability in comparison with the assessment center and needs to attract a sufficient number of respondents that evaluate a single party to obtain the most objective evaluations.
 

Also companies apply methods to evaluate candidates or current employees using interview. Interview, being a live communication with candidates, enables to obtain multiple real-world examples from persons’ past experience, which gives an idea of how people behaved before. At the same time, it gives the ability to predict behavior in similar situations in the future. Again, in this case, for qualitative assessment of candidates through interview, it is necessary to attract qualified professionals, which is not cheap. The probability of subjective assessment is rather high, as interviewer communicates face-to-face and had not witnessed assessed person in other situations.

Each method certainly has its advantages and disadvantages. Methods differ from each other in format and price range. Which one is the best, you’d ask? This all depends on the opportunities, current experience and how experts responsible for evaluation will guarantee the high level and quality of the performed assessment.

With the Performance solution by Lanteria you can easily try different evaluation methods to choose the best one, that will perfectly fit your company’s needs. You can try Lanteria solutions for free, just fill in the form at: http://www.lanteria.com/free-trial