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Measuring Business Performance: Employees

Last week, we looked into profitability of a business, as an integral part of ascertaining a business’ performance, and examined some of the common metrics used to measure profitability. Today, we will discuss a non-financial measure: employee performance.

Employees are an essential part of any business as they contribute to its success. Therefore, companies need to measure staff performance to ensure they meet their key performance indicator (KPI), complete required tasks on time and behave appropriately in the workplace.

Unlike profitability, there is no one single approach or formula to evaluate an employee’s performance. This is because human capacity can be quantified based on different factors such as the level of creativity/innovation, accountability, effectiveness, jobs completed and consistency and these can be achieved by setting SMART goals.

Performance can be assessed informally during one-to-one meetings between a supervisor and a subordinate or a formal appraisal which could be carried out monthly, quarterly, bi-annually or yearly.

Focus areas for evaluating employee performance

Quality and Quantity of work

A company is in business to make profit by offering value added goods and services to customers and employees are the key resources a company relies on to achieve its goals. Therefore, the productivity of each employee matters.

Measuring the quality and quantity of work done by an employee is done through assessing goal-based results, quality, quantity, effectiveness i.e., speed and accuracy, and keep track of work done. Employees should be encouraged to fill worksheets or provide periodic reports.

Employee efficiency

This refers to an employee’s ability to fulfil their tasks with speed, accuracy and within the stipulated period.

To measure employee efficiency, employers should set SMART goals for each task in terms of workload, deadlines and expected output. These objectives will be reviewed during an assessment or evaluation exercise.

Learning and Development

Learning and Development refers to the systematic process used to enhance an employee’s skills, knowledge, and competency, resulting in better performance in a work setting. In the long run, sending employees on training courses is beneficial for both the employers and the employees.

Personal goals

Aside from work related training, employees may have some personal aspirations or goals they intend to achieve. To manage this, employers should try to understand and support employees in reaching their personal goals. This would ensure staff motivation and reduce staff turnaround, which will be beneficial to all.

In summary, monitoring employee performance against agreed measures and ensuring their development within the company will not only provide staff satisfaction but reduce staff turnaround and increase productivity.

If you or your business require support with setting up metrics to measure employee performance, please email us at


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