Measuring employee performance against your company's production metrics involves aligning employee performance objectives with operational and strategic goals. By focusing on accomplishments rather than activity, you can improve your overall business and help your employees develop their careers. Determining which metrics your employees can affect also contributes to developing employee morale, loyalty and job satisfaction. During your employee’s performance review, ask him to demonstrate how he completes job tasks in an efficient and cost-effective manner, and how this helps your company achieve its competitive edge.
Review your company’s strategic plan to identify the goals and objectives that can be impact most directly by your employees. Establish and communicate the standards for excellent performance. For example, customer support representatives have direct contact with customers and influence customer satisfaction ratings using their communication and troubleshooting skills. They also have indirect responsibility for improving product quality by accurately documenting product problems and providing feedback to the product development and manufacturing departments.
List your employee’s accomplishments and link each one to a production metric. Communicate quotas or other performance expectations. Monitor performance and provide feedback to the employee on their progress towards daily, weekly, monthly or annual goals. Establish standards for disciplinary action when required. For example, if your department goal is to produce a certain number of units per week and your employee’s share is not met on a continual basis, institute a probationary or re-training period. You may also need to establish criteria for termination from the job.
Identify your employee’s personal accomplishments that contribute indirectly to the success of the overall unit. For example, reward employees for training their co-workers and new staff members. Provide incentives for employees to streamline processes and identify cost-saving tactics for improving production metrics. Performance measurement should be quantifiable and verifiable.
Rate employees on competencies (skills and behaviors required to complete a job task successfully) as occurring sometimes, never or always. Analyze the ratings for all employees in your department to determine if training or new policies and procedures can boost the results.
Conduct performance reviews on a regular basis. Determine how to appraise the employee, typically by asking for input from co-workers and customers or comparing employee accomplishments to data reported on the company balanced scorecard. For example, sales employee performance reviews should include examination of closed sales achievements, reported as a percentage of the total company sales.
Adapt policies and procedures, standards and production metrics to current business conditions or changes in strategic direction. For example, as new products or services launch, add production metrics associated with them to both the company balanced scorecard and individual employee career development plans.