What Should HR Managers Base Performance Metrics On?

Managers

Human resources are the soul of every organization both large or small. Here’s what we think many may not know, though. How do HR managers measure the performance of their employees?

Wondering why a certain colleague gets recognized and awarded during their company’s annual dinner event and more than once, too? We know what that’s like.

What’s their secret? Read on to find out. 

Those employees know something others don’t. They know the key performance indicators of an employee in that particular organization. Different organizations have their unique policies and mode of operation. This also applies to their key performance indicators. 

What is measured in an affiliate marketing company will be different from what is measured as performance in a book publishing company. However, certain key performance indicators are commonly measured. 

So what are these key performance evaluation tools that the HR managers use to measure employees’ performance in an organization? Why is Henry getting awards at the annual company’s dinner event and others don’t?

Let’s delve right in to know why. The first performance metric is clients’ satisfaction. 

 

Clients’ Satisfaction

No organization will be in business without its clients. It’s a common performance metric for employees. So how do they relate with the organization’s clients?

Let’s look at a telecommunication firm, for instance. Gemma is a customer care representative at the firm and is in charge of fielding calls from subscribers phoning to lodge complaints. Unfortunately, Gemma is temperamental and easily loses her cool when a client gets insistent on certain requests. She becomes rude, forgetting she is projecting the image of her firm to the subscribers. This goes on for a while until the firm notices that they are experiencing a significant decline in subscribers. A quick investigation into the source of the problem is launched, and HR discovers from the reviews online that the firm has one of the worst customer support centers.

An unsatisfied client is an unhappy client. An unhappy client is bad for business. When a business becomes bad, it will reflect in the performance metrics of that organization. The customers’ rate of satisfaction with the products and services is a key performance metric for every company. Conversely, organizations experiencing a surge in growth and stock value are keeping their clients happy. 

On the other hand, when the clients are not happy, they will seek satisfaction elsewhere (going to the competitors). This can gradually lead to a decline in business and the company’s market value. This metric can be quantified or measured by the number and nature of reviews, recommendations, and testimonials about the company’s products or services. 

 

Employees’ Productivity

HR managers look at the quality of work done by the organization’s employees to gauge their performance. It’s beyond keeping up with task deadlines, working efficiently, getting the job done, and doing it well. No supervisor will applaud a staff who delivers work on time when the work is far from impressive.

Hank is a staff in the administrative department. His desk is regularly saturated with tons of paperwork to type, proofread and submit before the close of work each day. Then, finally, his boss hands him a particular file, telling him to prepare a comprehensive report on it and submit it before closing for the day. Two hours before the close of work that day, Hank is back with the typed report and submits it to his pleasantly surprised employer. Only that satisfaction is short-lived once he takes a look at the document and finds it poorly structured and riddled with typos. 

This is a subjective performance metric. Employees handle different tasks, but how they’re measured depends on what they’re doing. However, one common denominator is the quality of the task done. If it’s impressive work, then it speaks well of the employee’s performance. But if not, such work will be turned down, which leaves a dent in that employee’s performance. 

 

Individual Targets

A lot of times, employees are given separate targets or goals to accomplish. As much as teamwork is a thing, so are individual tasks. Teamwork can shadow low-performance employees due to the brilliance of others covering for them. However, in an individualized setting, it’s every employee for themselves. Organizations usually give employees quantifiable or measurable targets. 

Typically, nominees for “employees of the year” are those whose individual achievements and contributions have been instrumental to the organization’s success. The appraisals of employees’ accomplishments are used to measure this performance metric. In-house company reviews can be carried out monthly, bi-monthly, quarterly, or annually where the employees’ output will be analyzed and evaluated. 

How about we paint a scenario with this?

Henry is a staff in the firm’s marketing and sales department. Along with his co-marketers, he has been given an individual monthly target to sell 50 of the company’s products. After every month, a performance review is conducted by the head of Marketing and the HR manager. A couple of them were able to sell 20 products, some 25, others 30. Some performed below expectations and were able to sell only 10. Henry delivered and sold all 50 products. So naturally, he gets the highest performance ratings for that month and a noteworthy appraisal from his superiors. 

With this scenario, it’s easy for you to know how the performance metric for each marketer will be like. If the metrics are graded via percentages, those who sold 30 products had a 60% success score. Those that sold 25 products achieved a 40% success score. Henry, who sold every single product allocated to him, had a 100% success score. 

Indeed, percentages may not be used. It’s up to the company to decide how to quantify their employees’ performance data. 

 

Conclusion

In summary, the clients’ satisfaction, the employees’ productivity, their quality of work, and setting individual targets for employees are some of the key performance metrics that HR managers based on for their employees’ reviews. 

So, what other performance metrics do you think HR managers use? Please drop your comments. We’ll love to know what you think. 

 

References

https://blog.namely.com/the-4-metrics-you-need-to-gauge-employee-performance

About AbstractOps

Do you want to implement performance based metrics? AbstractOps handles and automates your HR ops so that you can focus on your customers. If you have any questions about how to implement performance based metrics, email us at hello@abstractops.com. We’ll do our best to help.

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