Measuring employee performance is a key strategy for organizational success. By keeping a fair and consistent evaluation methodology, managers can determine where inefficiencies exist, identify strong employees for promotion and development and award salary increases and bonuses in a quantifiable way.

Measuring Employee Efficiency

Employees' ability, competency and productivity should be measured against their peers regularly. This is helpful to both the employee and the company overall. By identifying areas where an employee may be trailing his colleagues, a personal development plan can be put in place. Similarly, if a negative trend is seen among a number of employees, company controls and procedures can be evaluated to address these problems at a general level.

Identifying Talent

By using a consistent and quantifiable method of evaluation, the strongest employees can be identified and earmarked for promotion. Staff turnover is a primary source of frustration for managers, and by having a method in place to develop in-house talent, employees are more likely to stay with their current employer. This is mutually beneficial.

Salary and Bonus Payments

Many companies provide annual salary and performance incentives. To be fairly awarded, an evaluation system is indispensable. Not only will managers be able to justify the awards to senior management, but staff will know that there is an equitable method of compensation within the organization. More arbitrary methods can lead to low staff morale or the feeling of favoritism.