Having an employee performance evaluation system is important for all companies. How do you promote and develop the “best and the brightest,” if you don’t have a reliable way of identifying them or comparing them to others in and outside of your company?
It’s important to know how well your employees are performing. Ignoring this can be costly not only financially, but operationally.
There are several reasons why an employee evaluation system is important. The first reason is that by measuring employee performance, management has information available to use in making strategic decisions.
Also, from a financial perspective, failure to measure performance can lead to the failure of reaching targeted sales and profit goals.
From a productivity standpoint, employees may not be as productive or efficient as they could be, which leads to little or no growth and potentially lost sales.
Deciding to evaluate performance and productivity, involves deciding what data to collect, along with the type of performance metrics needed to measure employee’s productivity.
Examples of performance measurements may include, measuring individual performance, measuring the entire company performance, or measuring a departments performance. Whatever method that you choose, make certain that you are collecting the right information.
Once you have decided what information that you need to collect, and prior to implementing the system, communicating with your employees is a most important first step.
Failing to communicate effectively with your employees can lead to resistance and confusion. Implementing an employee measurement and evaluation system, leads to better management decisions and improved operating performance.
At Net Profit, we provide you with management advice, including employee pre-employment screening, management testing and background information.