An accurate assessment of employee productivity and business performance is important for any entrepreneur. According to an IDC study, companies lose 20-30% of revenue annually due to inefficient business processes. And according to statistics, workers spend only 40% of their work time directly on tasks due to distractions. Luckily, a work hours time tracker can help business owners improve their employees’ productivity.
In this article, we tell you how to evaluate and improve the efficiency of both your employees and the entire business.
How to evaluate the performance of an employee
Each employer, among his duties, has a record of the time worked by the employee and must also prescribe the working hours and temporary opportunities for rest in the lines of the employment contract. This regime may not be specified in the contract only if the employee fully complies with the collective rules that apply in the organization.
A 2013 US Gallup poll showed that 70% of people are regularly distracted from work tasks. Smartphones, social media, emails, and calls from loved ones all interfere with focusing on core responsibilities and lead to lower productivity. Measuring this indicator allows you to assess the qualifications of an employee, the level of his interest, and productivity.
To evaluate the performance of your employee, try to follow the next steps:
- Set high expectations.
- Define business goals.
- Identify the driving force behind the business.
- Choose the right method.
Set high expectations
To obtain accurate data on productivity, it is not enough to count the number of goods created or sold or services provided. A worker can produce 100 toys a day, but if most of them are defective or don’t sell well, his productivity level is low, and labor time and materials are wasted.
By measuring productivity and talking to your employees about their results, you let them know that you expect them to be more engaged and committed to achieving personal goals that align with company goals.
In addition to assessing the quality of work of individual employees, these measurements can show the problem areas of the work process itself. Perhaps the level of efficiency is reduced due to equipment breakdowns, suboptimal organization, lack of communication, or other problems. In addition, performance evaluation allows you to understand how successful your business is in achieving goals and objectives.
Define business goals
What do your company’s short and long-term goals look like? Do you want to increase profits, efficiency, or innovate? Enter new markets, find new customers, or increase their loyalty?
Statistics for 2014 show that only 40% of employees understand the challenges employers face and the strategies used to meet them. At the same time, studies have shown that employees who know how their performance affects the achievement of company goals feel happier and, therefore, work more efficiently than those who do not see this connection.
Identify the driving force behind the business
Before choosing specific methods to improve performance, you need to define performance criteria (KPIs) – controlled indicators that are responsible for the profit and reputation of the organization and are directly related to the goals of your business.
Choose the right method
Most workers perform multiple tasks with varying degrees of measurability. Factors such as overtime costs, annual turnover rates, and overall job satisfaction should be taken into account when determining the profitability of an individual employee’s performance. Try different methods to see which one works best for your business needs and goals.
After choosing the best method for evaluating performance, it’s important to use effective tools for monitoring and analyzing performance metrics. For instance, Pipedrive, a CRM tailored for sales teams, offers features for deal management, communication tracking, and task automation, enhancing sales productivity. Similarly, Xero, a cloud-based accounting software, helps businesses monitor profits, manage invoices, and control expenses efficiently. For a comprehensive view of employee performance, including 360-degree feedback and time tracking, HR software by SenseHR features a flexible platform highlighting various aspects of employee performance. A well-informed evaluation requires the integration of such specialized tools into the evaluation process not only streamlines data collection but also aids in making well-informed decisions that support the company’s goals and boost operational effectiveness.
Here are seven popular employee performance evaluation methods:
- Achieving goals.
- Quantitative measurement.
- 360-degree feedback.
- Sales productivity.
- Service performance.
- Time management.
- Profit estimate.
- Task performance quality.
Why is it useful to monitor employee workflow?
Increasing the efficiency of employees is one of the main tasks of any leader or business owner. With the right organization of work, you can get the most out of familiar conditions. Productive work improves business results and reduces costs, as RMClient explains.
Managers know how difficult it can be to improve team productivity. Each employee has his views and temperament, so this process rarely goes without clashes and misunderstandings.
The result is well worth the effort:
- Profit increase. When your employees work efficiently, your operating costs decrease, the cost of producing goods or services decreases, and your revenues increase.
- Improving the working environment. When employees have low productivity, the office environment becomes oppressive. As a result, employees can start updating their resumes in search of more interesting offers. Motivated employees who perform their jobs effectively create a positive work environment around them.
- Creating a trend within the team. Engaged employees not only create a positive work environment but also set the tone for colleagues. If your employees work effectively, the rest unwittingly try to match them. If new people come to such a team, the manager will not even have to talk about performance standards.
- Professional growth of employees. When your employees work effectively, they push themselves to the limit and gain new skills that make them more skilled and experienced.
- Increasing engagement. Efficient employees perform their duties better and achieve their goals faster, increasing the success of the business as a whole. In addition, with a high level of employee involvement, it is easier for a company to attract and retain talented specialists.
Summing it up
Regular feedback is essential to increase employee engagement. Both positive and negative feedback helps motivate the team and make certain adjustments to the workflow.
There are special programs that help calculate how much time per day employees spend on productive work. They motivate employees to work without distraction and issue reports on how long it took to complete a specific task. For example, a work hours time tracker by RMClient can help you monitor the level of your employees’ engagement and motivation.
It is an effective tool for measuring team productivity, which is used by many small and medium enterprises. In this case, no one monitors the distribution of employees’ working time – instead, the result is evaluated. The method does not restrict the freedom of employees and does not distract management.
Plus, performance evaluation not only helps employees evaluate their contribution to the company’s success but also increases their motivation for further team and individual achievements.
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