Need to know: measuring performance

Describe the key factors used to measure employee performance – formally and informally.

Most businesses will have formal, business specific, measurement criteria that are linked to the company’s key indicators and business goals – you will probably be aware of how your company is measuring performance in this respect.

Formal measures will constitute part of the performance management process and will be more or less specific, depending on the company, but they might include things such as customer satisfaction in an external facing role, or run rates in a factory. An HR person needs to know and understand these key measures, to ensure that they understand individual and team performance

It is vital that HR people also understand the informal criteria that managers might use.

Informal measures are often more important in terms of people being promoted or rewarded and so we should ask questions like: What would someone get praised for in your organisation? What would someone be criticised for? We also need to understand how these informal measures are implied in the formal process ‘yes they’re good at meeting targets but they’re difficult to get on with’, or ‘yes they’re a good contributor but they’re always late to meetings’.

Informal measures make the review process difficult to manage, as different managers will use different informal measures. HR needs to be good at spotting these measures by both observing how people talk about employees in terms of performance, and by asking good questions.

You will find that if you have a manager who particularly applies informal measures, you will have employees who are cynical about the performance management process, or in the worst cases you might see increased grievances from staff who thought that they were doing the right things and displaying the right behaviours and yet weren’t rewarded for them.

Understanding the informal measures your business uses will enable you to know what is really going on. Use that knowledge to challenge behaviour that’s bad for business and use your influence more intelligently by looking at what’s really happening, rather than just at the theory of what should be happening.

Jan Hills is director, HR with Guts

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