The most difficult part of the performance appraisal process is to accurately and objectively measure the employee performance. Measuring the performance covers the evaluation of the main tasks completed and the accomplishments of the employee in a given time period in comparison with the goals set at the beginning of the period. Measuring also encompasses the quality of the accomplishments, the compliance with the desired standards, the costs involved and the time taken in achieving the results.

Measuring employee performance is the basis of the Performance appraisal processes and performance management. Accurate and efficient performance measurement not only forms the basis of an accurate performance review but also gives way to judging and measuring employee potential.

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For the purpose of measuring employee performance, different input forms can be used for taking the feedback from the various sources like the superior, peers, customers, vendors and the employee himself. All the perspectives thus received should be combined in the appropriate manner and to get an overall, complete view of the employees’ performance. Observation can also be exercised by the superior to obtain information. Some suggestions and tips for measuring employee performance are:

  • Clearly define and develop the employee plans of action (performance) with their role, duties and responsibilities.
  • Organizational outcomes or the achievement of organizational goals should also be kept in mind.
  • Focus on accomplishments and results rather than on activities.
  • Also take note of the skills, knowledge and competencies and behaviors of the employees that help the organisation to achieve its goals.
  • If possible, collect the feedback about the performance of the employees through multi-point feedback and self-assessments.
  • Financial measures like the return on investment, the market share, the profit generated by the performance of the team should also be considered.

For an organisation to be an effective organisation and to achieve its goals, it is very important to monitor or measure its’ and its employee performance on a regular basis. Effective monitoring and measuring also includes providing timely feedback and reviews to employees for their work and performance according to the pre-determined goals and standards and solving the problems faced. Timely recognition of the accomplishments also motivates the employees and help to improve the performance.

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Measuring the performance of the employees based only on one or some factors can provide with inaccurate results and leave a bad impression on the employees as well as the organisation. For example: By measuring only the activities in employee’s performance, an organization might rate most of its employees as outstanding, even when the organisation as a whole might have failed to meet its goals and objectives. Therefore, a balanced set of measures (commonly known as balanced scorecard) should be used for measuring the performance of the employee.