Your company is only as good as the people working there. This is why measuring performance is a critical part of growing small and medium businesses. Employees in SMBs ensure that the business is running and revenue is generated. Checking their performance lets a company know where to invest its training to equip its employees better. 

Regardless of your company’s industry, it will only achieve its annual targets if all team members equally put in their required work. Here are seven ways to effectively measure employee performance in SMBs:

Use 360-degree Feedback

360-degree feedback allows each employee to receive feedback from everyone who interacts with them. It is a powerful tool for measuring performance as it accounts for manager bias. Using the 360-degree feedback approach, employees will get feedback from their supervisor, four to eight peers, other staff members, and even customers. 

This roundhouse evaluation approach allows for a well-rounded review of each employee. Those involved in the 360-degree feedback of a specific employee should understand the employee’s role and function. Alternatively, they can have an idea of what the employee’s daily tasks involve and address the employee’s attitude, communication skills, and daily performance. 

This method of measuring employee performance can be very successful for SMBs. It helps a company have impartial reviews of each employee.

Check Attendance

This is the most obvious way to measure employee performance. A present team is a productive team. Attendance is mandatory for an employee’s continual employment at any organization.

While sick days and PTO are crucial to the health and productivity of your employees, a habit of missing work is detrimental to the company. Prolonged or regular absenteeism is terrible for productivity. 

Check employee attendance and ensure everyone is pulling their weight by reporting to work. Do not make exceptions other than PTO, emergencies, and sick days. An employee who regularly has ‘emergencies’ and is mostly away from their job is a liability to the company and does not perform as well as those available and present.

Manage Goals And Objectives

The company and management set goals and objectives for a reason. They help teams work to achieve a tangible end and give meaning to work. Without goals and objectives, it would be hard to measure performance.

Remember that goals and objectives can be redesigned after each quarter, especially during uncertain times. However, the main objectives should remain a standard against which you measure company and employee performance. 

Managing company goals and objectives allows managers to assign tasks aligning with employees’ personal goals. This helps motivate employees toward better performance. It also helps in measuring employee performance. When an employee meets an objective, they have performed incredibly well. If not, it may be time to re-assign goals differently to ensure each employee feels like an integral part of the company’s success.

Measure The Quality Of Work Produced

An excellent Human Capital Management (HCM) practice is to measure the quality of work produced. It is crucial for each employee’s work to be graded for quality, not just quantity. While one can produce a large amount of work in a specific timeframe, it may be low-quality work. Low-quality work costs the company more money as someone has to spend time revising or redoing it. You’ll end up delaying launches and disappointing customers. High-quality work raises the company’s reputation and builds trust.

Using both HCM and ERP systems can help your organization map out and track every employee’s work quality. Checking that each task was completed to a satisfactory degree. HCM systems also allow you to train employees properly on how to produce high-quality work. Sometimes, low-quality work is due to a lack of training or practice. 

HCM systems allow management to prove that proper training was given to each employee and that follow-ups were done. If an employee continuously produces low-quality work, managers can show that it is not due to a lack of training. Disciplinary measures can be taken to ensure performance is back on track.

Account For Quantity Of Work 

High-quality work is fantastic, but the quantity of work produced is also a good measure of performance. For SMBs, it is vital that every employee is productive. Because of the small number of people in each team, everyone must complete their tasks. 

Use HCM tools to help you track the number of work tasks achieved in a specific period. This can be products produced, clients onboarded, services rendered, or monetary value acquired. Getting a lot of work done is half the measure of productivity. 

Unless in the case of illness, emergencies, delays, and/or training, employees should meet a certain quota of work tasks. Checking that each employee has done so is a great way to measure the performance of your team.

Account For Initiative

This measure of performance is often overlooked in favor of more tangible and gradable measures. Accounting for initiative involves recognizing any time an employee completed tasks to standard without prompting or micromanaging. It also takes into account times when an employee has noticed an error, asked for more responsibilities, or taken initiative in any other way.

This is best applied in SMBs where micromanaging employees is not the norm. For employees to take initiative, they need to feel free to do so. If management is constantly breathing down their neck and checking every move, they will never have the space to step up. 

An employee who takes initiative regularly outperforms those who lack overall initiative. One who takes initiative occasionally also performs better. Noticing and rewarding initiative will lead to innovation and progress in your SMB.

Notice Helpful Acts

A great measure of an employee’s performance in SMBs is the ability to be a team player. In SMBs, many people end up doing more than is stated in their job description. Growing a company takes time and sacrifice and many employees are willing to give that. However, some employees go even further and help others handle their tasks.

A helpful employee is an incredible asset to any company. They are dedicated team players who look out for the collective growth of the team. These are employees who perform better than their peers. They do not need to do extra work, but they offer to support and help to ensure company goals are met. 

Noticing helpful acts and teamwork in an SMB can encourage others to do the same. It leads to an overall more productive team with less tension and resentment. 

Final Word

Understanding how your employees are performing is critical to understanding whether your company is on track to achieving its goals. For SMBs, following the above methods makes it easy to track and measure employee performance. Utilizing HCM and ERP tools to track and record each employee’s progress and tasks also helps. Measuring performance enables you to know where there is room for improvement and where an employee can be rewarded. 

Using the systematic approach outlined above allows your company to accurately measure performance. With clear, unbiased performance measurements, your company has the needed information to help implement changes that better the company. In the end, you want to help your employees perform better so that the company performs better.