Guide

Measure performance and set targets

Employee focused performance measurement

As your business grows, the number of people you employ is likely to increase. To keep on top of how your employees are doing, you may need to find ways of efficiently measuring staff performance.

Some common ways include:

  • one-to-one meetings
  • staff meeting
  • appraisals
  • end-of-year or 360 reviews

Meetings and appraisals

Informal meetings and formal appraisals provide a very practical and direct way of monitoring and encouraging the progress of individual employees.

They allow frank exchanges of views by both sides. You can use them to increase productivity and performance by setting employee targets and measuring progress towards achieving them.

See more on managing the performance of your staff.

Regular staff meetings can also be a very useful way of keeping tabs on wider developments across your business. These meetings often give an early indicator of important concerns or developments that might otherwise take some time to come to the attention of your management team.

KPI metrics for employee performance

Looking at employee performance from a financial perspective can be a valuable management tool. The most commonly used measures in this area are:

  • sales per employee
  • contribution per employee
  • profit per employee

These measures are not an alternative to the broader appraisals but can flag up issues that you might later want to explore in more detail during the formal performance management process.

Expressing employee performance in quantitative measures is easier for some sectors and for some types of worker. For example, it should be quite easy to see what kind of sales an individual salesperson has generated or how many units manufacturing employees produce per hour at work.

But with a bit more effort, you can apply these kinds of measures in almost any business or sector. For example, using timesheets to assess how many hours an employee devotes each month to different projects or customers under their responsibility gives you a way of assessing what the most profitable use of their time is.

Download a sample performance review form (DOC, 23K).