Performance measurement

Performance measurement and workers’ compensation.

We are going to learn about the different methods of performance measurement. The use of a performance measurement model will help us to ensure that variable or incentive compensation is more closely linked to the behaviors we want to encourage. We cannot forget that in many cases they are more qualitative than quantitative.

Management guru Peter Drucker famously said “If you can’t measure it, you can’t manage it”.


Performance measurement


Sources of performance measurement.

Performance measures can come from objective sources, usually quantitative, such as sales or billable hours. On the other hand, there are also subjective and usually qualitative sources such as 360º, 180º or 90º evaluations.


Measuring performance objectively.

With regard to objective performance measures, sales are the simplest method for measuring performance. However, they can only be applied to departments where there is a commercial activity and this has a short sales cycle. If the cycle were long, this objective measure should be more integrated along the different milestones of the sales funnel. You can consult different indicators in the post of the company specialized in human resources Kenjo.


Measuring performance subjectively.

HR evaluations are dominated by subjective data. There is a great article that delves into this aspect in the specialized magazine Technology Review.

In contrast, in relation to subjective measures of performance, 360-degree evaluations are the most commonly used tools to measure performance. In this case, in order to evaluate the employee, colleagues, subordinates, customers and managers are asked for their opinion and provide their evaluation on specific topics.

For SMEs, due to its practicality and low complexity, the evaluation is the simplest and easiest to deploy, with a good cost-benefit ratio. We are talking about the 90º performance evaluation, i.e. the one carried out directly by managers on their subordinates.


NPS and eNPS

In SMEs, it is very useful to complement this evaluation with the evaluation of customer and employee satisfaction. In this sense, the new goal of excellent organizations is to create brands that provide a unique experience for employees and consumers. You can see the importance of eNPS in the post by expert Daniel Segarra.

Measuring is through Net Promoter Score (NPS) for employees and eNPS (employee NPS). You can learn more about both indicators in the different posts we have written about them.

If you want to easily automate performance measurement in your company, request a free trial RIGHT HERE.