CEOWORLD magazine - Latest - Executive Education - 5 Benefits Of Measuring Your Employees’ Performance (And How To Get Started)

Executive Education

5 Benefits Of Measuring Your Employees’ Performance (And How To Get Started)

If you put time and effort into hiring the right employees, and if you trust those employees to do a good job within your business, you might not feel the need to track their actions or productivity. And under the right conditions, a hands-off approach can be beneficial to both productivity and morale.

But for most businesses, it pays to have some kind of system in place to track employee performance—however you choose to define it.

The Advantages

Tracking your employees’ performances comes with a number of important benefits:

  1. Identifying weak points for improvement. Depending on which metrics you track, you should be able to identify key weak points to target for future improvement. For example, if you notice that one of your call center employees is placing lots of calls per hour, but the average customer satisfaction of those calls is low, you’ll know that representative should be spending more time ensuring the customer is getting what they need, or possibly changing their disposition.
  2. Understanding your cost-efficiency (ROI). Calculating how your employees are working can also help you understand the cost-efficiency of your entire team. You know how much you’re paying your employees, and if you can tie your productivity metrics to real revenue for the company, you can evaluate their overall ROI. This can help you figure out how to compensate your employees, and identify points of low productivity for improvement.
  3. Specifying and evaluating goal performance. Creating a system to track employee performance requires you to define what type of performance you’re looking for. You’ll get to define which dimensions of performance matter most, and what numerical objective your employees should be targeting. This gives you a firm, measurable objective to pursue—an underrated necessity when optimizing team performance.
  4. Motivating employees. When employees know they’re being monitored, or know their performance is being measured, they’ll be inclined to work harder. Sometimes, this is due to fear of being watched and singled out; they know if they slack off, it will be noticed, and they’ll be given a stern talking-to. Other times, it’s due to being able to see an objective goal, and wanting to reach it.
  5. Rebalancing your team. Evaluating your team’s performance is also the perfect opportunity to rebalance your team assignments. If one team member is especially good at one particular skill or task, you can rearrange your assignments to favor that specialty. If one of your workers is overworked while another doesn’t have enough to do during the day, you can redistribute the workload accordingly.

How to Get Started

So how can you get started with a system if you’ve never tracked employee activity in the past?

  • Identify the right metrics. Before you get too excited looking at productivity software or time tracking tools, you should take the time to identify the key metrics you want to track. There are actually dozens of metrics you can use to measure employee performance, from tasks completed per hour to revenue generated. Brainstorm with your managers and team members to define the right goals for your staff.
  • Designate an authority. Choose someone to be in charge of employee monitoring within each of your departments. It could be someone already in a leadership position, or it could be a new hire or appointment.
  • Adopt the proper tools. There are too many employee tracking tools to list here, including time tracking software, project management apps, and remote monitoring software. Give them each a try and choose the one that best suits the needs of your business (and the preferences of your team).
  • Create a balanced system for evaluation. Proper employee evaluation should include both subjective and objective components. In other words, you can’t use an employee’s time spent or objectives completed as the sole basis for your evaluation of their abilities as a worker. Also consider how they contribute to your office environment, their general attitude, and their willingness to learn and grow.
  • Strive for transparency. Your employees will feel much better about being tracked if you’re open and honest with how and why you’re doing it. Trying to be sneaky or secretive about it may make employees feel like they’re being spied on, or feel like they’re distrusted.

There are many ways to track and analyze employee performance, just as there are many ways to be a good employee. What works for another business might not work for yours, and what seems like a good idea on paper might not turn out to be effective for your team. Consider your goals, your industry, and your brand carefully before adopting a solution—but don’t let the benefits of tracking employee performance elude you any longer.

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CEOWORLD magazine - Latest - Executive Education - 5 Benefits Of Measuring Your Employees’ Performance (And How To Get Started)
Anna Papadopoulos
Anna Papadopoulos is a senior money, wealth, and asset management reporter at CEOWORLD magazine, covering consumer issues, investing and financial communities + author of the CEOWORLD magazine newsletter, writing about money with an enthusiasm unknown to mankind. You can follow CEOWORLD magazine on Twitter, Facebook, Instagram, or connect on LinkedIn for musings on money, wealth, asset management, millionaires, and billionaires. Email her at