How To Track The Effectiveness Of An Employee: Tips For Entrepreneurs

By The Nigerian Voice

Any teamwork involves the effective work of each member of that team. Now that telecommuting and geographic dispersion are becoming the norm not only for an online business, like the best sportsbook in Senegal, but also for an offline company, this is even more important than before. Let's talk about the formal criteria for evaluating effectiveness, the factors that influence it, and ways to improve it.

Why Track
Tracking employee performance is important because in any business, the payroll isn't infinite. Management at any company needs to understand whether each employee is worth his or her money and whether certain duties are worth a particular rate. Moreover, it's important to understand both the optimal amount of workload per person, and the distribution of tasks and authority, and to motivate employees and make plans to improve their skills that are aligned with the interests of the business.

The main purposes of the employee assessment:

  • Select employees who are most effective for the organization in a given position (quickly and accurately select such employees from candidates).
  • Reduce costs in the process of search and selection of specialists for the position, which is based on an already formulated system of requirements to candidates. by saving the recruitment officer's time, speeding up the closing of vacancies and eliminating hiring errors.
  • Get information for making informed personnel decisions (changes in salaries, personnel rearrangements).
  • Obtain information to create an effective system of motivation, compensation, benefits.
  • Identify weak, unmotivated employees, inconsistencies in their positions. This task is especially relevant in times of crisis when the company has to downsize.
  • Identify employees with high potential (not necessarily managerial) - it is they who can bring maximum profit to the business, help the company "grow" and achieve high performance.
  • Conduct a selection in the talent pool - to identify employees with high management potential. The practice of personnel reserve in the organization helps retain valuable employees due to the prospect of growth and significantly save on recruitment and training as compared to hiring "outside managers".
  • Identify what additional conditions and skills high-potential employees need to perform at their best.
  • Determine what conditions are necessary for employees to retain them in the organization (minimize turnover rate, increase staff loyalty and satisfaction).
  • Optimize the cost of training in the company: identify wasted costs, create individual development programs for employees, managers, key specialists, and members of the talent pool.

What Criteria to Evaluate
The main criteria for evaluating the performance of both the team and the individual employee are three:

  • Volume, or the amount of work done: whether the norm was met, whether something was done overtime or even outside the job description.
  • Quality of work: no mistakes or shortcomings, conformity to the work and technology, no complaints from customers and colleagues.
  • Compliance with deadlines: meeting, not meeting, exceeding, early delivery, etc.

Ideally, when all work is done on time, to the required extent, and without quality complaints. But it isn't always possible to combine all three parameters, and the task of the head is if not to achieve this perfection, then to balance the work process as much as possible.

Approaches to Measure Performance
KPI Method
Under this acronym rises a quantitative approach based on calculating calculable indicators. We calculate the number of working hours per unit of time, estimate how much work can be done during this time (how many goods to sell, how many orders to process, how many characters of text to write, etc.). This information is clear and accessible to the manager. On the basis of the averaged data, it's possible to establish an average level of performance and evaluate employees on its basis. There may be rewards (both material and career) for effective work, and penalties for ineffective work).

The advantage of this method is its ease of use: there is no need to spend money and time on analytics. At the same time, it doesn't take into account either the quality of work or the state of technical equipment (for writing a text or adding products to the catalog serviceability of the computer and Internet speed is very important) or the skill level of the employee (intern will handle fewer tasks than an experienced manager).

Rank Method
This method is based on the assessment of personal qualities of an employee and their compliance with the position and related instructions. When analyzing the work of a particular person, one looks at the time of solving tasks, the quality of work, the speed of making certain decisions, and the material resources spent. A seven-point system is then evaluated.

In many ways, this method is similar to evaluation in education and sports. It's easy to use, makes it possible to see the work of each employee in dynamics, to distinguish strong and weak, and to prepare the ground for the motivation of employees. On the other hand, it's only useful for comparing the work of people in similar positions (both hierarchically and functionally), doesn't exclude subjective evaluations and thus may lead to conflicts in the team.

ROI Method
This method shows the effectiveness of the investment in employee training. The ROI ratio is the ratio of the return on the investment in training to the amount of that investment, expressed as a percentage. From this formula, you can see how much money the trained employees have brought to the company. If the ratio is negative, it means that the training costs did not pay off; if the ratio is positive, it means that it was worthwhile.

The point of calculating ROI is to translate the costs of training and benefits from it in the same unit of measurement - rubles, dollars or other currency. This is great because then it's possible to make a direct comparison and make a clear conclusion about the effectiveness of training for business.

This method is based on evaluating an employee's behavior in critical work situations on a 5 or 10-point scale. The results are displayed as a rating with the names and grades of the employees. It's simple and based on this information, tasks can be delegated later, but at the same time, the ratings can be lopsided because they are made by the supervisor and not by peers of similar status in the company.

360 Degrees
This method is used to evaluate employees before promotion or training. It involves colleagues, HR, management, and sometimes outside experts. During such evaluation, the qualities of an employee to be evaluated are defined and a questionnaire is prepared on their basis for their direct superiors, colleagues and subordinates directly interacting with them. This approach is good for versatile evaluation, but the subjective factor isn't completely abstracted away here.

Employees can be evaluated with the help of ratings that include answers to questions or evaluations of compliance of work and behavior with certain professional and ethical norms. Ratings can be summed up and ratings can be compiled based on a set of indicators. This doesn't take long, the information can be processed using computer programs, and is most often done anonymously. This method requires the creation of questions or descriptions of the employee's behavior and notes on the compliance of his or her behavior with the norms. After that, it's necessary to sum up the marks received and make a rating of employees to understand who is in the leading positions. But again, a subjective factor is possible, including with hasty answers.