17 ideas for measuring employee effectiveness

Measuring your employees’ effectiveness is an important part of managing a team, and ensures your organisation is running at its most productive. Some roles are easier than others to evaluate, eg fundraising roles usually have quantifiable targets to hit and the effectiveness of these employees is purely based on performance against these goals. However, it can be much harder and more subjective to evaluate the performance of other employees, eg support staff. Below is a list of different metrics that you could use to evaluate employee effectiveness during appraisals.

When deciding which metrics to use, it’s worth bearing a couple of things in mind. Firstly, ask your employees how they measure their performance. They have the best knowledge about their role and what success looks like, and allowing them input into the metric used gives them ownership of the measurement process. Try to use a combination of objective (measurable numbers) and subjective (rating by a manager) measurements, and make sure you cover the whole of their role, to give you the full picture of how they are performing.

1. Management by objectives

This is probably the most common way to measure employee performance. Objectives are set periodically, eg each quarter, and reviewed at the end of the target period. Progress towards each objective is then scored and new goals set.

2. Use rating scales

For subjective measurements, such as cooperativeness, dependability and judgment, a manager can rate their employee on a scale of 1 to 10. The rating should be done at regular intervals and be consistent in both what it measures and the scale used, to track changes in staff performance. Use the job description to set criteria necessary for the role.

3. Focus on performance

To keep employees focussed solely on tasks which are critical for the success of the organisation, you can look at how much time they spend on other things, eg how often are they online or checking emails? How much time do they spend on admin? Do they often take personal calls at work? This can help identify more efficient ways of working. It is also interesting to look at productivity statistics at various times during the day, to see if there are any times where employees typically ‘slump’.

4. Ask staff to rate their own job satisfaction

Happier employees are usually more productive employees, and job satisfaction is a particularly important motivator for charity staff. This is also a very useful indicator about whether employees are likely to leave in the near future.

5. Track digital trails

Computer software increasingly allows managers to track their employees’ work, eg through keystrokes made, tasks completed or percentage of an employees’ time spent using a particular application. These metrics are especially useful for data entry or processing roles.

6. Team performance

Measuring the performance of a team as a whole, as well as the individuals within it, will help determine whether they work well together, and if a reorganisation may help boost productivity.

7. Peer appraisals

Other staff members in similar roles can be asked to rate an employee’s performance, on the basis that they know best what the job requires. This is also a good way to monitor an employee’s ability to work well with others.

8. External evaluators

The use of professional assessors who monitor employees during simulated or actual work activities gives truly objective results, but is probably not a realistic option for most not for profit organisations.

9. Quantity and quality

It is important to always make sure these measures are linked. For example, scoring call centre staff purely on number of calls fielded ignores whether the majority of these calls have a satisfactory outcome or not.

10. Cost effectiveness

If the employee has some control over their budget, this can be a useful indicator of performance.

11. Absenteeism / tardiness

Obviously, an employee is not performing when they are not at work. However, you must be careful not to discriminate in cases of absence due to sickness.

12. Creativity
This is difficult to measure but can be an incredibly important part of some roles, eg design or marketing and communications jobs. Ask an employee to keep a record of their creative work and use appraisals to go through examples and score them.

13. Feedback forms

Whenever employees have contact with either donors or service users, you can use feedback forms to track the success of the interaction and grade the staff member on their performance. Limit feedback forms to a couple of easily answered questions and you should get a sufficient flow of replies to establish a track record.

14. Mystery shopping

For staff who regularly interact with the public, eg supporter services, mystery shopping is a good way to track intangibles like knowledge, friendliness or helpfulness. Someone pretends to be a service user and uses a pre-prepared script to gauge the employee’s ability to deal with a certain situation.

15. Advocacy

Staff advocacy is particularly important for not for profit organisations, as it is important for employees to feel enthusiastic about their organisation’s cause. However, it can be difficult to measure. You could look at using net promoter scores for employees, based on their willingness to promote your organisation’s services or internal jobs.

16. Personal appearance/grooming

The key thing to measure here is appropriateness. Different roles will require different levels of personal appearance, depending on who the employee is in contact with, but it is important that employees know the standard that they are expected to adhere to.

17. Physical fitness

An increasing number of organisations are investing in their employees health and physical fitness, for instance with regular exercise classes. The idea is that healthier employees are more productive employees, and improvements in fitness can be tracked to correlate against increased productivity. However, this works best when employees are asked to track their progress themselves, as an employer doing so would be too intrusive.


Remember, it is never enough simply to measure the effectiveness of your employees. The key thing is to act on that information, so that the performance of your organisation as a whole improves.

The Pitfalls of Ignoring Poor Performance

Charities are continuing to feel increasing economic pressure and this is having a negative effect on staff morale.  60% of charity staff have experienced redundancies in their organisation, and 55% feel their workloads are getting heavier, leading to stressed and unproductive employees.  And with half of voluntary sector leaders expecting their organisation’s situation to worsen over the next 12 months, the situation is not likely to improve in the near future.

However, not for profit organisations can be reluctant to tackle poor performance in the workplace - only 57% of staff reportedly receive useful feedback on how they are performing.  With over 218,000 employment tribunal claims brought last year, and charities particularly vulnerable to claims, failure to manage underperformance can have serious consequences for charities.

In this article, TPP examines the most common reasons for failing to tackle poor performance, and why these are misconceptions.



"Nonprofits should be kind"

This is an extremely common problem in the not for profit sector.  Most charities recognise that their staff often accept lower pay than in the private sector but expect a higher level of job satisfaction.  Combined with the fact that charities exist to promote ethical values, this can often lead managers to want to be “kind” to their employees, and turn a blind eye to underperformance.

However, failing to tackle poor performance at an early stage is more often than not an unkindness, both for the organisation, whose effectiveness will suffer, and for the employee themselves, who will continue to underperform until their manager has to tackle the problem, which can be a set up for an unfair dismissal claim.  Unproductive employees are also usually unhappy in their job, and treating the problem can improve morale all round.  Being a supportive manager, who proactively handles performance and develops their employees, is not being unkind. Allowing people to fail is unkind.

“We need to follow this through by managing poor performance when it arises. Anyone who hides behind the charity mask on this one and feels it is not compatible with being nice to people is not being professional or businesslike - nor maintaining the charity ethos.”
Valerie Morton in Third Sector magazine


Fear of litigation

Charities are usually heavily reliant on their public image to bring in funding and volunteers, and so are reluctant to enter situations where litigation might result which will give them negative press.  Charity employees can be more willing than most to bring a claim against their employer if they feel they are being treated unfairly, as they have an innate sense of justice and fair play.  This means that voluntary sector managers can be unwilling to speak to employees about poor performance and scared of getting into situations which they feel may eventually lead to dismissal.

Once again, the solution to this is to tackle poor performance at an early stage, rather than simply ignoring it.  Properly handled, an employee may well improve their effectiveness, avoiding the need for dismissal.  But if it does get to that stage, an employee is more likely to feel aggrieved about being dismissed if their employee has not attempted to address and solve the issues leading to the underperformance, and will almost certainly have a stronger case at tribunal because of this.


Worrying about morale

In the current economic climate, when many charities have experienced downsizing, many managers are concerned about maintaining the morale of their team and fear that confronting an employee, particularly one that is popular with the rest of the staff, about their performance may lead to a wave of fear among the team and a drop in morale.

In this scenario, managers are assuming the worst.  Handling unproductiveness sensitively and at an early stage can lead to the employee becoming both more productive and more satisfied, which is likely to positively affect the rest of the team.  If this does not happen, and the process eventually leads to a dismissal, there certainly is a risk that the rest of the team will become worried, but reassurance and support can help to tackle this.  However, leaving that employee to carry on as they are will definitely lead to a drop in morale as the rest of the team have to make up the slack.


Extenuating circumstances

A common reason for underperformance can be personal problems that are unrelated to work.  If a manager is aware of these circumstances, they could very well be tempted to let poor performance slide on the assumption that the employee’s effectiveness will improve once the situation has been resolved.  However, simply ignoring the issue is doing the employee no favours.

Talking through the issue with the member of staff will alert them to your concerns, demonstrate your support in their situation and may lead to a mutually beneficial solution, such as allowing them to take a paid leave of absence.


Losing a star performer

Sometimes, an employee can be a high performer in numerical terms, but can still require performance management for unacceptable behaviour, such as negativity, dishonesty, harassment or bullying.  Managers may be reluctant to tackle this behaviour, even if it is having a negative impact on the rest of the team, for fear of losing their star performer.

Leaving this kind of behaviour untackled ends up sending a message to the rest of the staff that conduct like this is acceptable as long as targets are met.  Staff may become disillusioned and leave due to perceived unfairness.  Performance management should always have the welfare of the team as a whole in mind, not just that individual.


Conclusion

If your beneficiaries are likely to suffer due to a drop in team productivity and morale, is there really any excuse that could be valid for failing to deal with poor performance early on?  A good manager should be able to effectively communicate and document an employee’s poor performance in a timely manner, so that any disciplinary action is never a surprise. If it does happen, it should only be the culmination of a process where the manager is sincerely working to change an employee’s behaviour for the betterment of the organization.


Resources

Further advice on performance management and involuntary redundancy:
KnowHow NonProfit
CIPD
10 point checklist for confronting poor performance
Crash Course: Seven ways to manage poor performance

Training
CS Skills Centre - Managing poor performance
The Centre - Managing poor performance, absence and stress

Healthcare Conferences UK - Managing Poor Performance and Supporting Nurses in Difficulty

Forms & Templates
Various forms are available from HR Bird

Finally, for further guidance on how NOT to conduct a performance review, learn from the master - David Brent.

5 common traps to avoid when conducting appraisals

Annual performance appraisals can be an essential tool to maintaining success in not for profit organisations, but many employees view the appraisal process as a box-ticking exercise that never leads to real change and is only useful for inspiring Dilbert cartoons.

But if done correctly, appraisals can recognise, reward and promote excellent performance, establish baselines for employment decisions and provide notice to employees who need improvement or development.

Appraisals can only achieve this if done properly and poorly-conducted appraisals can do more damage to an organisation than not holding any at all.  Here are some common mistakes that managers make in the appraisal process and what you can do to avoid them.


1. Over-generous evaluations

Many top companies force managers to force-rank employees during appraisals, so only a set percentage of employees can ever receive the best performance rating.  While this may be too harsh for the not for profit sector, giving employees an over-generous evaluation can lead to a number of problems.  It’s easily done as managers usually want the best for their employees, but it can provide those staff members with a false sense of security and devalues above-average performance by others.  And if an employee is criticised or penalised for performance issues in the future, any discrepancy with their appraisal may give them a basis for legal action.

There are two key ways to avoid this.  When judging an employee’s performance, consider each criteria as average to start off with and then adjust up or down.  It is psychologically much easier to give an employee an accurate evaulation this way than grading down from a perfect score.  The other method is to judge an employee against their peers – is their performance stronger or weaker than average?  This will help make your best (and worst) employees stand out from the average majority.


2. Focussing on most recent performance

When preparing for an appraisal, the last few months will obviously be foremost in your mind.  But an effective annual appraisal must give equal weight to the full 12 months, or employees who have a burst of productivity right before an appraisal will have an unfair advantage over those who have produced consistent results over the year.

Managers should also keep track of their employee’s performance over the year and bring up any variations between time periods.


3. Obsessing about quantifiable data

Managers often feel that in order to deliver objective evaluations, they have to stick to performance data that can be quantified, or counted.  However, objectivity simply means that opinions must be given without personal prejudice, not that opinions should be discounted in favour of figures.  After all, success in many roles is simply not quantifiable.  It’s always best to give solid examples of past performance to back up an evaluation, but they do not necessarily have to consist of countable units.

After all, the most important questions for an employee in an evaluation are things like: How am I doing?  Are you pleased with my work?  Is there a future for me within this organisation?  None of these questions have quantifiable answers.


4. Lack of focus on performance

A good appraisal is about only one thing; how well that employee has achieved their job goals.  Therefore, any discussion about timekeeping, attitude, dress etc should not be included in an appraisal discussion unless it directly affects an employee’s performance.

There is a natural human bias for managers to favour employees who think and act like themselves, which can give some staff an unfair advantage at appraisal time.  It is much more important to concentrate on whether an employee delivered the desired results than whether they followed the same process you would have done.

Sticking purely to results will also help to avoid inadvertent stereotyping, such as penalising employees who may appear less dedicated because they don’t stay late at night.


5. Treating appraisals as negotiations

Many appraisals are prefaced by both the manager and employee completing the same evaluation form.  This can have the unfortunate effect of making the appraisal into a negotiation as managers compromise in order to gain agreement from the employee.

While self evaluation is a useful starting point, ultimately the appraisal is a formal record of your opinion, as the manager, on the quality of the employee’s work.  Employees should be asked for their opinions on any feedback they are given, but the objective of this is to ensure that they understand your perspective, not to ensure that they agree with it.


An effective performance appraisal process can be an extremely valuable tool for any organisation, but in many of them the process has overshadowed the effect.  Simply filling out forms and conducting interviews does not measure employee performance.  Make sure you are not sabotaging the effectiveness of your appraisals.

More advice on conducting appraisals is available from the CIPD.






Note: This article should not be construed as legal advice pertaining to specific factual situations.