Employees have an enormous impact on the success of virtually every business. If they do an incredible job, the business thrives. Conversely, if employees perform poorly, the business tanks. So, how do you tell if your employees are performing well or not?
The answer is fairly simple: establish goals and metrics for each of your employees. By setting goals, your employees know what to strive for. And by measuring their performance towards achieving these goals, they know if they are on the right track.
Properly setting goals and metrics is fairly complex. Below are seven helpful tips:
1. Have employees set their own goals and review them.
It is much more motivating for employees to set their own goals rather than dictating them. So, ask your employees to set their own goals. Then, review their goals with them and either approve or modify them.
2. Make sure goals are within your employees' control.
Make sure employees have control over whether or not they can attain their goals. For example, holding your customer service manager accountable for overall sales goals is a bad idea. Even if he or she does a phenomenal job, sales could dip as sales volume is generally outside their control.
3. Make sure goals are timely and measurable.
At a minimum, employees should set goals monthly. At a maximum, you can consider annual, quarterly, weekly or daily goals as well. In any of these cases, the goal needs to be tied to a specific time period.
Likewise, goals must be measurable. If not, neither you nr your employees will know whether they achieved them.
4. Set both big and underlying goals.
Employees need to set both big-picture goals that identify what they'd like to accomplish overall, and underlying goals that help them get there.
For example, a salesperson might set a big goal of achieving $100,000 in monthly sales. To achieve this goal, the salesperson should establish several underlying goals, such as making 100 phone calls to new prospects, calling 25 past customers, and issuing 20 new proposals.
By setting and tracking these underlying goals, employees maintain better focus and are better able to realize their big goals.
5. Leverage team accountability.
Meet with your team in a group setting at the beginning of each month. During this meeting, have each team member state the goals they set last month, how they performed, and their goals for the coming month.
These meetings provide positive accountability, as nobody wants to publicly state over and over again that they failed to meet their goals. Rather, team members start to improve performance so they have the satisfaction of publicly stating they've successfully achieved their goals.
6. Enable employees to see results in real-time.
Employees must be able to see results on their big and underlying goals at least daily. Doing so allows them to understand how they are progressing and what changes they must make, if any, to achieve their monthly goals.
Not doing so is similar to telling an athlete the score only after the game is over. You aren't giving them a chance to modify their strategy and performance based on whether they are winning or losing.
Having a dashboard that reports team and individual metrics accomplishes this, keeping everyone accountable and focused.
7. Creatively set goals when needed.
For some roles, such as sales, goals are fairly easy to develop. As mentioned above, goals might include the number of outbound sales calls, number of proposals issued and amount of sales closed among others.
For other roles, such as technology development, goal setting might be more challenging to devise. To overcome this, think about the scenario in which your technology person does a phenomenal job. Perhaps they 1) complete all new tech requests within an average of only two days; 2) ensure your website is up 99.9 percent of the time, and 3) identify less than two new bugs each month. Make sure each of these goals can be measured in order to confirm whether this employee is performing acceptably.
By aligning employee and company goals, and providing real-time visibility so employees know whether they are achieving them, both employee and company performance will benefit.
The author is an Entrepreneur contributor. The opinions expressed are those of the writer.
Dave Lavinsky is the co-founder of Growthink, a Los Angeles-based consulting firm that helps entrepreneurs identify and pursue new opportunities, develop business plans, raise capital and build growth strategies. He also is the author of Start at The End (Wiley, 2012).