Why Do I Need to Measure Employee Performance?

One of the most common things that slow down the growth of a company is not what the owners know to be wrong, but what they don't know. To be more specific, if an owner or supervisor doesn't know how well or poorly their employees are doing, then not only does performance and profit go down, but morale does as well. The following list entails why it's so important for business owners to measure their employee performance routinely. 


Determining Appropriate Compensation

Regular wage increases can be an effective tool to promote good performance and reduce turnover, but as much good as it does, it can also do some bad. Often these equal pay increases bring morale down amongst the top performers in a company as they see the practice as unfair. Patriot Software advises performing employee performance reviews and using those outcomes to determine the suitable compensation for that employee is an excellent way to combat fair wage increases for deserving employees.


Addressing Weaknesses

As stated above, often the most serious situations occur not because of what an owner knows but what they don't know. Measuring employee performance allows a company to address any weaknesses that your staff may have. According to Solofire, measuring employee performance allows businesses to identify weaknesses within the team and gives them a sense of where to address them. The results of an employee review can lead you to determine the proper steps to either eliminate the issue or improve the employee with things such as additional training or department relocation. 


Employee Efficiency

The inclusion of set employee performance reviews can ensure that your staff is working at a high production rate all year round. This can be accomplished by either having random employee performance reviews or simply outlining a set scheduled such as three or six-month endpoints. According to AIHR Analytics, this style of performance review has been rapidly becoming more and more popular as it is seen as one of the fairest procedures for both employee and employer. 


Understandably, being a business owner comes with many responsibilities. One must make sure that product, marketing, and inventory are all accounted for, but you should never forget about the most important one, your employees. Conducting employee performance reviews don't only increase employee morale but increase the company's productivity and bottom line. Simply adhere to the tips listed above in order to begin laying a strong foundation.



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