How to Measure Employee Performance Without Killing the Fun Boss Culture
Imagine your team is a well-oiled machine. Everyone knows their role, they all work together harmoniously, and the end result is an incredible product or service that leaves customers wanting more… 🤩
This dream team scenario doesn’t happen by accident — it takes a lot of hard work and effort to get there. And one of the most important factors in achieving this level of success is employee performance.
So, what is employee performance, exactly? And how can you go about improving it? Read on to find out!
What Is Employee Performance?
Employee performance generally refers to how well an employee performs their job duties and responsibilities. The internal factors that can influence employee performance include an individual’s motivation, ability, and work ethic, while the external ones include organizational policies, work environment, and management.
Internal factors affecting employee performance
🟠 Individual motivation
When employees are motivated, they are more likely to put forth the effort required to do their job well. Additionally, studies show that motivated employees are often more creative and innovative, which can lead to better performance.
🟢 Ability / skills
It goes without saying that people who have the necessary skills and knowledge for their position usually perform much better than those who don’t. Well-developed knowledge and skills make it easier for a professional to do their job efficiently and commit fewer mistakes, which can increase the quality of their work.
🟣 Work ethic
Employees who have a strong work ethic are likely to be hardworking and dedicated to their job. This makes them more responsible, trustworthy, and productive. They will find pleasure and doing their job the right way and are likely to show a superb performance quality than those with a weaker work ethic.
External factors affecting employee performance
🟡 Organizational policies
Organizational policies have a major impact on employee performance. They are meant to regulate employee behavior and maintain order in the workplace. But the way they do that can either boost or decrease team morale and job satisfaction and, thus, affect individual and collective performance at work.
For instance, overly restrictive policies can make employees feel like they are micromanaged. Or if a policy doesn’t do anything to protect employees’ interests, they may start to feel that their work is not valued or that they are not being treated fairly. Hence, it’s pivotal to build organizational policies smartly and ensure they promote team productivity instead of ruining it.
🔵 Work environment
If you have a stressful or unproductive work environment, your employees can become stressed out and unmotivated. On the other hand, if you have a positive and supportive work environment, it can really help your staff to feel more engaged and do their best. Ultimately, the type of work environment you create will have a big impact on employee performance.
By setting clear expectations, providing adequate resources, supporting employees, and maintaining effective communication with them, managers can create an environment that encourages everyone to excel in work. In contrast, when management is ineffective, employees may become disengaged, and their performance may suffer.
How Do You Improve Employee Performance?
It’s obvious that in order to improve employee performance, managers need to address both intrinsic and extrinsic factors defining its quality:
🙃 Focus on intrinsic motivation
This is the type of motivation that comes from within oneself. It’s driven by a desire to do something because it is personally satisfying or interesting, not because it results in an external reward. So, to tap into intrinsic motivation, managers need to identify what drives each individual employee:
- What are their interests?
- What makes them feel good about their work?
Once you know what motivates an employee, you can create work tasks and goals that are aligned with those interests.
🎓 Encourage skills development
Employees who feel like they are constantly learning and growing in their roles are more likely to be engaged and motivated. As a manager, you can provide opportunities for employees to develop their skills by offering training and development programs or by giving them assignments that stretch their abilities.
🧡 Create a positive work environment
To create a positive work environment, you should provide employees with fair and consistent treatment, clear expectations, and effective communication. You need to make them feel valued and appreciated to motivate and engage them in work.
Here are some things that can help with that:
- Provide incentives — While intrinsic motivation is more internal and often more powerful, extrinsic motivation can be helpful as well. You can provide employees with incentives for meeting goals or for going above and beyond their job duties. Incentives can be financial, such as bonuses or raises, or non-financial, such as recognition or additional responsibility.
- Set clear goals — When employees know what is expected of them, they are more likely to be motivated to meet those expectations. As a manager, you need to set clear and achievable goals for your team and help them develop a plan to reach those goals.
- Give feedback — Regular feedback is essential to keeping employees motivated. Feedback should be specific, objective, and timely. It should also be given in a way that is constructive and positive.
🦸♀️ Work on your leadership skills
The way you lead your team can have a big impact on employee performance.
For instance, if you are an autocratic leader who oversees each step your team members take, you are bound to stress them out and fail to motivate them in the long term. On the other hand, if you are a democratic leader who likes to listen to their staff, you may be more successful in motivating employees because you involve them in decision-making and give them a sense of ownership.
Besides adopting a more people-oriented leadership style, it’s also important to be a role model for the behavior you expect from your employees.
- If you are constantly late or absent, it will be harder to motivate employees to be punctual and present.
- However, if you are always on time and working hard, employees are more likely to follow your lead.
Being a role model is not only about setting an example for employees to follow but also about showing them that you are invested in their success. Thus, you need to be available to help them when they need it and share your expertise and constructive feedback regularly.
There are a variety of ways to improve employee performance, but it’s important to remember that not all employees are the same. What works for one employee might not work for another. That’s why it’s important to tailor your approach to each individual.
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How to Measure Employee Performance
There are a variety of systems and tools for employee performance measurement out there, so you have several options to choose from and find what works best for your organization:
🔄 The 360-degree feedback system
The 360-degree feedback system involves collecting feedback from employees’ peers, subordinates, and supervisors.
The main advantage of using this system is that it can provide a well-rounded view of an employee’s performance. However, it can be challenging and time-consuming to collect all of the necessary and honest feedback that the technique requires you to get. So, if you’re considering using a 360-degree feedback system for your employees, there are a few things you should keep in mind:
- First, make sure you have a clear goal when collecting and evaluating colleagues’ feedback on employee performance. This will help to ensure that the process is used effectively and that the results are meaningful.
- Second, clearly communicate the expectations and guidelines for giving feedback to employees who will be participating in the process.
- Finally, provide employees with some training on how to give constructive feedback.
By following these tips, you can make the best out of the 360-degree feedback system and get truly valuable information about employee performance.
💥 The critical incident technique (CIT)
The CIT involves collecting and analyzing data on incidents that have had a significant impact on the organization. This information can then be used to identify areas where employees need improvement, as well as areas where they are excelling.
When using the CIT, it is important to collect data from a variety of sources: employees, supervisors, customers, and more objective performance and progress tracking tools. This will ensure that the results are accurate and representative of the entire organization. The data should also be collected over a period of time so that trends can be identified.
Once the data has been collected, it needs to be analyzed in order to identify critical incidents. These incidents can then be used to create performance measures. For example, if a customer complains about an employee’s attitude, this would be considered a critical incident.
The advantages of the CIT are that it can provide detailed information about employee performance. Additionally, the CIT can be used to identify both positive and negative incidents, which can be helpful in developing targeted performance improvement plans.
The disadvantages of the CIT include the potential for subjectivity in data collection and analysis. Additionally, the CIT requires a significant amount of time and resources to implement properly. So, make sure you have it all when deciding if the CIT is the right tool for your organization.
🎯 Management by objective (MBO)
Under this approach, managers set specific objectives for their employees and then evaluate their progress towards these goals. This provides a clear and concise way to track employee performance and identify areas of improvement.
There are several advantages to using the MBO technique:
- First, it ensures that all employees are aware of the company’s objectives and their role in achieving them.
- Second, it provides a common language for managers and employees to communicate about results.
- Finally, it creates a culture of accountability by holding employees responsible for meeting specific objectives.
Despite its many benefits, the MBO technique is not without its challenges. One of the most common problems is that objectives can become too narrowly focused, leading to a lack of creativity and innovation. Additionally, the MBO approach can be time-consuming and resource-intensive, especially if objectives are constantly changing.
Perhaps the most common method for measuring employee performance is simply asking your team members themselves how they feel about how they’re doing. This allows employees to reflect on their own performance and identify areas where they need and want to improve.
Self-evaluation can be done through surveys, one-on-one interviews, or other feedback mechanisms. The main challenge though is that one has to be 100% honest and objective when evaluating their own performance. Employees should not hesitate to identify their own weaknesses and areas for improvement, but they should also highlight their strengths and accomplishments.
A well-made self-evaluation report can help employees to get a better insight into their work results and behaviors and make a meaningful plan for how to address any identified performance issues. It can also help employers understand each employee’s self-perception and, by engaging them in the evaluation process, motivate them to become better at work.
An obvious disadvantage of self-evaluation is that it’s highly subjective. What one employee considers to be a strength may be seen as a weakness by another. Additionally, some employees may be reluctant to identify their own shortcomings. Thus, it’s recommended to combine self-evaluation with more objective measures such as attendance and absence records, quality of work, and overall output.
💻 Software solutions for real-time feedback
The traditional yearly employee performance reports seem to have been falling increasingly out of favor with a lot of companies recently. The main reason for that is that such reports hold them accountable for past behavior with little focus on improving their current performance and coaching them for better results in the future. So instead of the once-a-year evaluations, companies opt for a more proactive and real-time approach of frequent ongoing feedback on a worker’s performance throughout the year.
The new approach makes sure that employees are constantly informed on how they’re doing while providing managers with a clear perspective on workers’ progress. This allows them to react to any challenges their subordinates are facing or listen to their ideas in a more immediate and impactful manner. That’s why modern software for real-time feedback comes in handy.
A system for real-time feedback may take on different forms from company to company, with many relying on various software solutions.
Some firms use specialized applications for real-time feedback. They allow workers to report on their progress towards specific goals and request input from their peers or managers. Managers can track their subordinates’ progress and have it presented in a clear and concise way with the help of reports, graphs, and charts.
Others take advantage of time tracking software. Integrating this type of solution into their day-to-day business workflow offers distinct benefits on multiple levels:
Workers. Logging time spent on their current projects and tasks helps employees keep their workday organized. Everything they’re working on is right there in front of them, easily accessible for review, approval, and feedback from their supervisor.
Managers. It allows managers to get a quick overview of their team members’ progress towards their goals, see where they’re struggling and what takes up most of their time, and as a result, identify any roadblocks that need to be eliminated to complete a specific goal.
Companies. Businesses get access to a vast amount of valuable data. For example, just being able to see how their employees spend their work time can help detect problem areas that require attention. Team leaders can then check in with their direct reports and provide them with useful and relevant feedback.
It can also help highlight those areas where employees are making good progress, which could serve as an excellent basis when considering future promotions and performance-based financial rewards.
Need an Effective Tool for Employee Performance Management?
actiTIME is an excellent example of a multifunctional solution that helps to collect essential data on employees’ performance and improve their work results with ease. It contains the following valuable features:
- Weekly timesheets that let you log the time each employee spends on specific tasks every day.
- Project management module that allows you to see how well your team is performing against the set goals, i.e., estimates, deadlines, etc.
- Absence tracking functionality that makes it easy to detect if someone is taking too much time off or is frequently absent without a good reason.
- Comprehensive reports and visual charts that give you a clear overview of your team’s productivity, time off statistics, and project resources utilization.
Here are the main types of actiTIME reports for more effective employee performance management:
- Staff Performance Report — It shows how much time each employee spends working on the assigned tasks. You may use this information as a piece of additional evidence during the employee appraisal process to identify if someone uses their working time effectively or not.
- Time Balance & Overtime Report — It depicts how much overtime your employees work. Analyzing this data against specific productivity outputs, you may understand which employees are willing to invest extra effort in work for attaining higher-quality results and if that’s even worthwhile.
- Leave Time & Balances Report — It visualizes employee absences and time off data. This information is very helpful in detecting potential attendance issues at an early stage and taking measures to improve the situation before it gets out of hand.
- Estimated vs. Actual Time Report — It allows for comparing the estimates with the actual time employees spend on tasks. This way, you may quickly find out if there are any significant deviations and why they occur.
With actiTIME, you get a full picture of your team’s work routine and performance. It is an irreplaceable tool for any manager who wants to increase productivity and optimize resource utilization. Try it for free now!
Adopting a timesheet solution (much like any other new piece of software) in a company new to the concept could be a bit of a challenge. So if you’re considering using a tool like actiTIME to analyze employee performance in your company, be sure to keep the following recommendations in mind in order to get the most out of it:
🤝 Get your team on board with data
Make sure employees understand the advantages of tracking time. Show them with actual data how it can both benefit the company bottom line, and contribute to their personal growth and development when used to analyze their performance and identify any problem areas.
🙌 Distribute workloads in a way that makes sense
For better transparency and therefore quicker feedback process, team leaders need to have access to either all of the current projects, or at the very least the same ones that their direct reports are working on. That way they can keep an eye on what everyone is doing at any given time, and provide the necessary input and guidance when necessary.
💬 Make good use of the comments feature
Time tracking data can be extremely valuable by itself, but adding detailed comments helps provide helpful context that makes the data easier to read and analyze.
✨ Take full advantage of available functionality
Most time tracking applications these days offer numerous useful features that go beyond simple time tracking. Things like Statuses, Time Estimates, and Deadlines are all extremely helpful when it comes to tracking and evaluating employee performance. So it’s crucial that your managers and workers know how to use them if you wish to get the most of your time tracking tool.
So, what have we learned about employee performance? Mostly, that it’s a very complex thing. But there are some things you can do to increase the chances of a good outcome.
First, make sure your employees feel like they belong and are part of a team. Give them clear goals and feedback, so they know how they’re doing. And finally, trust them to do their job. With all this in mind, go forth and create an amazing workforce! (And let actiTIME help you with that).