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Performance Appraisals: Creating Performance Standards

Performance Appraisals: Creating Performance Standards

When performance appraisals are done correctly, they provide valuable development and growth insight to employees that can be used to advance their careers. However, when done incorrectly, performance appraisals can be intimidating for both the manager that has to write them and the employee that has to receive them. In the last blog, we discussed how to create a “Performance Management Culture” to set up a successful culture of continual growth for both the organization and the employees.

This blog focuses on performance standards which are a key factor in making performance appraisals an effective tool. When delivering a performance appraisal start by reviewing the vision, mission, and values of the organization. These should give context to the Key Result Areas (KRA’s) that the employee is expected to achieve. Each KRA should have specific performance standards that were established the prior year with the employee.

What is a “performance standard”? Performance standards are tangible, measurable conditions that must be met for the job to be considered done well. These standards are focused on results, not activities. Ensure performance standards are outcome-oriented so that during the performance review, it is easy to see if each standard was, or was not, accomplished. This makes the performance appraisal objective instead of subjective and removes fear from the performance process.

Let’s look at some examples of performance standards.

Example#1: Manufacturing Position with a KRA of “Component Production”
Performance Standards may include:
A) Delivery request deadlines have been met 95% of the time.
B) No more than 5% of components have not been considered scrap.
C) No more than one account every year has been lost to the dissatisfaction of component quality.

Example #2: Sales Position with a KRA of “Prospecting”
Performance Standards may include:
A) A “Focus 50” list of potential accounts that we are not currently doing business with has been created and kept current.
B) 10% of monthly appointments have been made with new accounts.
C) A minimum average of $5,000 per month is received from new accounts.

Example #3: Line Foreman with a KRA of “Training”
Performance Standards may include:
A) Employee orientation has been held within the first three working days.
B) New employees have been assigned the appropriate training within the first five days of employment.
C) Trainees have been tested and evaluated within 48 hours of completing their training program.

Notice that the performance standards listed above are created to focus on measurable results. They are not just quantifiable activities like making 40 cold calls per day, or manufacturing 500 components per day, but instead focus on outcomes of the activities. They are also not expecting perfection as this is not realistic in most environments. Finally, all performance standards created above are within the employees’ control or domain.

Creating performance standards focused on results ensures outcomes and expectations are clear objective tools to help grow both the employee and business. Make sure to connect the performance standards to KRA’s focused on achieving the overall vision, mission, and vales of the company and you will create a performance management culture that will help your organization flourish.

Interested in learning more, join us for a complimentary 1-hour webinar, Leading Effective Performance Appraisals, on October 14, 2020, at 9:00 AM.

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