Managing staff performance

Setting objectives can help you measure your employees' performance over a set period of time, and they usually form the basis for appraisals.

There are a variety of different ways to agree on objectives with your staff.

Key performance indicators (KPIs)

KPIs are objective factors that can be clearly identified and measured, such as:

• sales figures
• production output
• machine downtime
• financial performance

To make sure objectives are useful, you could use the SMART system. This means making sure the objectives are:

• Specific
• Measurable
• Achievable
• Realistic
• Time-based

For example, instead of 'increase sales' as an objective for a sales person, you could set: 'Increase sales to new customers by 10% over the next six months.'

When performance is hard to measure

If results aren't easily quantifiable, try a system that scores employees. For example, you might give them a score between one and six for their level of competence in certain areas. These might include:

• leadership skills
• team working
• initiative
• flexibility

The objective might be for the employee to achieve an increase in their score.

Competencies

You may prefer to base your appraisal on competencies, rather than objectives. These are behaviours or qualities that your employee should display and include things like:

• teamwork
• communication
• time management
• leadership
• problem-solving

You will need to agree on competencies that fit in with your business objectives.

Whichever method you choose, it's important that your employees understand their objectives and know how they can achieve them.

Involve them in the objective setting, as they are often best placed to know how a particular task is done most effectively and will ensure they commit to achieving it.