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Key Metrics for Measuring Employee Performance


When measuring employee performance, the goal is to focus on meaningful data that allows you to determine employee profitability. Based on this data, you'll know whether employees are having a positive or negative impact on the bottom line and then be able to decide how to proceed. Below are four metrics that can give you this information.

  1. Attendance metrics. 
    You should know whether your employees are showing up for work as scheduled and whether they are working their full shift and taking breaks as allotted. If they are habitually coming to work late, leaving early or taking too much time off, they are a clear and present danger to the bottom line.  
    When measuring attendance, look at who's doing what, when and why, and at the effects of good and poor attendance on not just your team but also the overall company.
  2. Productivity metrics.
    Employees' productivity is a key indicator of whether they are living up to your expectations for their roles. When measuring productivity, you'll need to evaluate the job description for the position, the type and amount of work assigned to the employee, deadlines for accomplishing each task, and the quality of work submitted. This information will help you determine which improvement strategies should be implemented and whether rewards should be extended or disciplinary action should be taken.  
  3. Training metrics.
    The intent here is to measure the effectiveness of your training program, as inadequate training is a capital reason for employee turnover.  
    Training metrics should include participation and completion rates — that is, how many employees entered and finished their assigned training. For immediate results, you can have employees take written tests and post-training surveys. Longer-term results will reveal themselves over time in your productivity metrics. For example, if training is successful, you'll see a boost in retention. If not, you'll experience a decline in productivity and a surge in turnover. 
    Training should be designed to meet the specific needs of the respective employee. So, along with measuring the all-around success of your training program, be sure to evaluate how the program affects employees on an individual level.
  4. Performance reviews metrics.
    Performance reviews are an opportune time to assess whether employees have met their goals for the review period and what subsequently needs to happen. 
    For example, should certain employees be promoted? Should they take on fewer responsibilities or the same number? Should they receive raises? What new goals do they need to meet? Do you need to assign more resources to employees or adjust their working conditions? Is disciplinary action warranted? All this information must be documented, tracked and appropriately measured.

Keep in mind that these are general metrics for measuring employee performance. Deeper insight can be obtained through more targeted metrics that are relevant to your company.

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Scott Johnson
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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