2017-12-05 00:00:00 Managing People English Avoid trouble before it starts, and help your team reach its goals, by drafting a set of objective performance metrics everyone can follow. https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/12/Man-and-woman-on-construction-job-site-evaluate-small-business-performance-metrics.jpg https://quickbooks.intuit.com/ca/resources/managing-people/small-business-performance-metrics/ Set Objective Performance Metrics for Employees

Set Objective Performance Metrics for Employees

4 min read

Gauging your team members’ performance is a big part of managing employees, but it can be hard for a small business to do this fairly. When employee evaluations are largely a matter of one-on-one reviews and personal meetings, it’s not always possible to purge subjective opinions from the process. This can introduce problems for your company, as a personal opinion can be unfair to some otherwise-good employees who just rub their supervisor the wrong way. It can also create a false view of workforce performance, as some popular employees earn rapid advancement and/or other rewards beyond their objective level of productivity. Another likely problem that comes from subjective performance metrics is that your evaluators miss out on some key factors affecting employee success simply because there’s no systematic method for identifying good work. Adopting objective performance metrics, and making sure front-line supervisors are all trained in the company evaluation methods, solves most of these problems and encourages every worker to do his best in a fair environment.

Fair for Employees

Your workers are human beings, and as such, they tend to be good judges of how productive their fellow employees are. They also usually respond to the way they feel they’re being treated by management. When employees see rewards and disciplinary actions being distributed in a way seemingly unconnected to performance, morale can drop and rumors of nepotism and unfairness start circulating. This is toxic to a productive workplace of any size, but it’s especially damaging to a small business with very few employees.

Management can counteract this potential difficulty in advance by drafting a checklist of important performance metrics and judging employees’ work according to it and it alone. For extra transparency, the company can distribute this checklist in advance of performance reviews to give everybody a fair chance to make the required numbers. This kind of open, non-partisan approach encourages the whole team to pull together toward identifiable targets, rather than keeping some people in the dark or possibly misdirecting them regarding what’s expected of them.

It’s Good for the Company

Objective metrics are good for employees, but they may be better for the company. Modern workplaces often find themselves under scrutiny by regulators and even courts for the way they handle employee relations. Any suggestion of unfairness whether it be on the basis of race, gender, or another identifiable factor can rapidly become a very costly and time-consuming problem. If, for example, your company has to choose between two candidates, a black man and a white woman, for a promotion, any decision may become the nucleus of a future human rights complaint one that could be impossible to defend against.

By setting an objective standard in advance, especially one that’s comprehensive enough to suss out the fine differences between similarly talented and qualified employees, your company not only finds making a decision like this easier, but it’s also much safer. In the event of a later complaint, your company can point to a set of objective criteria and explain to the human rights commission how the successful candidate met more of them than the unsuccessful complainant, which may be all it takes to dismiss a case. In fact, your investment in objective performance metrics may even derail a complaint before it’s made by helping the less-successful candidate better understand where he fell short, rather than leaving the worker in the dark to imagine the worst.

Performance Metrics as a Talking Point

Drafting objective standards helps your small business in another more subtle way: it can encourage good communication within the company. To be successful, a small business has to set goals and move toward them efficiently. Unclear goals, accompanied by muddy evaluations and subjective standards for success, can quickly derail the progress you’re hoping to make and leave the whole team foundering on the shoals. If, for instance, you hope to break into a new market in a given year but there’s no clear direction from above for how that process may unfold, the typical pattern is for some employees to give it their best effort, some to hold back, and others to sit confused at their desk waiting for instructions.

Using the concept of a clear, unambiguous standard for evaluating progress can open up a world of opportunity here. You can, for instance, draft a list of metrics in which every sales employee is expected to make 250 phone calls a week, develop 50 leads, and close 10 sales. With such a clear and objective set of expectations, employees, supervisors, and upper management know at a glance whether a single employee is succeeding. They can also tell, from repeated shortfalls on the part of the whole team, whether or not their goals are realistic and adjust expectations in something like real time. These objectives, and the progress everybody is making toward fulfilling them, can then be the subject of the weekly team meeting.

Objectivity Matters

Judging your workforce’s performance is one of the trickier aspects of effectively managing employees. Even a hint of unfairness in the process, especially when bonuses and promotions are on the line, can send employee morale into a tailspin. Subjective performance metrics also blind you to whether or not your company is succeeding in the marketplace. By drafting a set of objective standards and holding everyone to them equally, you can streamline the way your company operates.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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