Performance and your employees: What's the best way to measure it?

Michaela Peterson, Fsp Business, 21 May. 2015

Tags: performance measurement, measuring performance, performance management, key performance indicators, kpis, performance measurement system

If your business is still small, you won't have many issues regarding performance management. But, the more employees you have, the sooner you should think about implementing a proper performance measurement system.

Here are two effective ways of measuring their performance:

#1: Measuring performance through meetings and appraisals

Informal meetings and more formal appraisals offer a more practical and straight forward way of monitoring and encouraging the progress of each employee. According to, "they allow frank exchanges of views by both sides and they can also be used to drive up productivity and performance through setting employee targets and measuring progress towards achieving them.'

Moreover, you can use regular staff meeting for a bigger picture of the way your business develops since through these meeting you'll gain a better understanding of what are the main concerns or development issues.

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#2: Quantitative measurement of employee performance

With this method, you look at employee performance from a financial perspective.

„At the level of reporting for the overall business, the most commonly-used measures are sales per employee, contribution per employee and profit per employee. These measures shouldn't be thought of as an alternative to the broader appraisals outlined above, but can flag up issues that might later be explored in more detail in those meetings," reveals the same source.

This happens because seeing employee performance quantitatively is easier to handle for some sectors and for some types of worker: "It should be quite easy to see what kind of sales an individual sales person has generated, or how many units manufacturing employees produce per hour at work", explains the source.

Nevertheless, the same type of measures can be applied in almost all fields and you can still be successful at getting the right results.

But before you get excited, don't forget that you have to know your business very well and pick the right key performance indicators (KPIs) for your business.

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