Importance of measuring and managing employee performance

Written by stuart withers Google
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Importance of measuring and managing employee performance
Measuring and managing employee performance (Digital Vision./Digital Vision/Getty Images)

The ability to effectively measure and manage employee performance is critical to ensure the success of any business. Without any measures in place, human resources departments and managers cannot effectively and quantifiably analyse their employees. It's crucial for any business distinguish between successful employees and those that under-perform or need training and development. With strict performance measures in place, businesses have the ability to fairly and accurately manage employee performance.

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Career development

Many employees plan to advance their careers. However, not all will display the skills and determination needed to take their career to the next step. Through careful measurement of employee performance, businesses can evaluate current performance and can administer clear development plans to encourage employees to work towards a promotion. This benefits both the business and the employee. The business obtains the skills needed to ensure success and the employee can clearly identify the strengths and weaknesses in their performance, as well as any gaps in their knowledge and skills.

Retaining talent

In the average business there will be those employees who are happy to carry out the duties of their role and there will be the employees who are exceptionally talented and often go above and beyond their call of duty. It’s therefore important for businesses to have processes that enable them to recognise and reward talented employees before it’s too late. With proper performance management, businesses can retain, develop, and encourage flourishing talent, which is of benefit to both the business and the talented employee.

Boosting productivity

All businesses need a productive workforce. Employee productivity is often a key factor in achieving business goals and objectives. Without proper performance measures in place, there is no quantifiable method of analysing and assessing productivity. Closely measuring and analysing productivity allows businesses to set reasonable goals and expectations, identify and reward those that are highly productive, and provide a platform for the development of those who are underachieving. Measuring productivity can be beneficial for a business and its employees.

Implementing reward

There’s nothing worse than not being recognised for all of your hard work. People like to feel that their contributions and efforts are making a real difference, and, of course, we all like to be rewarded for those efforts. By carefully monitoring and measuring employee performance businesses can then effectively manage that performance through various rewards. Rewards can come in many forms, from receiving recognition for being the “employee of the month” to salary increases, bonuses, and other incentive schemes. Reward is also beneficial for business as it helps increase employee engagement and motivation.

Educated decisions

Overall, the importance of measuring and managing employee performance all boils down to the ability to make educated business decisions based on fair measures and quantifiable research. Using a structured approach, measuring and managing performance helps businesses better understand their people, revealing the high achievers and highlighting any issues. And let’s face it; any business knows an informed decision is a good decision.

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