During performance evaluations, also known as appraisals or reviews, a manager evaluates an employee's work on the job, usually in terms of quality and quantity. A performance evaluation provides feedback to the employee on how well he is doing and helps a manager make decisions about training, promotions, salary increases or disciplinary actions. Establishing a strategy for identifying and measuring metrics that accurately determine how well an employee is performing enables a manager to make good decisions for his employee and the organization as a whole, in accordance with Equal Employment Opportunity requirements.
Identify metrics (quantitative measurements) that can be reported today but which also impact future success. Ideally, measuring metrics during a performance evaluation helps an employee plan his or her career. For example, corporate instructors can be measured on the satisfaction ratings provided by their training session participants. Past success typically indicates future high performance.
Encourage some risk taking. If employees are only rewarded for what they can guarantee they can produce, they are likely to avoid risky, but innovative, projects that may have an adverse effect on the company in the long run.
Identify the metrics that the employee can have an impact on today. These metrics should be easily observable and managed. Making metrics difficult to monitor or evaluate restricts a manager's ability to help an employee improve. For example, rather than measure managers on how happy their employees feel, establish a survey to determine how many projects employees were able to complete with their manager's support and guidance.
Align metrics with corporate goals. Actions and decisions made based on responding to metrics enables employees to achieve success for themselves and the company (in terms of market share, profit and cost containment).
Report metrics using a common corporate system so there is a single source of data that cannot be disputed by different departments.
Assemble metrics into monthly departmental scorecards to report the key performance indicators. Then, during the annual performance evaluation, the information is easily available. For example, a scorecard for a Human Resources department might include such items as "cost per hire," turnover rate", "turnover cost" and "employment length" to calculate employee turnover. Talent managers who consistently have a high employee turnover rate associated with the people they hire can be counseled and advised on ways to improve their performance or disciplined if improvements do not occur within a specified time frame.