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How to Manage Employee Performance


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1) What is Employee Performance Management?

Employee Performance is a managerial conception that is expressed through a set of qualitative and quantitative indicators characterizing how effectively employees do their work. If we want to know how well workers cope with their duties and tasks, we need to monitor and gauge their performance using special success criteria (performance standards) to be compared against actual characteristics.

Employee Performance Management is a continuous business process that aims to obtain a good level of controllability, feasibility and predictability on delivery of work results . This is a systematic process which can produce a really profound value for organization, as the principles of this process cover much wider scope than just a regular measurement of employee productivity. We could say that this process is necessary because it intends:

  • Aligning the organizational objectives and strategies with well-grounded work requirements, fair check-up metrics, efficient skills, competency descriptions, and realistic plans on results;
  • Approaching work planning & outcomes in a deep and complex manner considering employee strengths, achievements, skills and attitudes;
  • Justifying employee remunerations based on excellent performance & contribution into success;
  • Identifying, measuring and formulating inefficiencies or defects in employee performance;
  • Contemplating areas and objectives for performance improvement;

2) What terms Employee Performance Management operates?

Employee Performance can be planned, measured and studied through characterizing it in terms of the following work dimensions:

  1. Quantity amount of specific units to be produced, processed or sold;
  2. Quality satisfying certain criteria that identify value and efficacy of job performance;
  3. Timeliness matching or surpassing standard timing, pre-planned target dates and milestones;
  4. Cost of work performed matching budget constrains, saving initiatives, cost-effectiveness;
  5. Manner of performance adherence to approved policies, procedures, processes, instructions, best practices, etc;
  6. Useful personal habits and skills demonstrating qualities and traits that help to be successful at work, such as politeness in communicating with customers, good self-organization, creativity, accurateness, well-groomed appearance, etc;
  7. Competency overall capacity for doing the job properly, imposed by experience, knowledge, intuition, etc;

Key Performance Indicators (KPIs) are the main instruments used for capturing the quantifiable measurements to appraise success at all aspects important to business success. Each dimension can be explained in many KPI s, but in each specific organization managers need to figure out the most suitable ones for their case. Some examples of KPIs along with departments where they can be used are represented in the table below:






Volumes sold by a salesperson in monetary explanation

The percentage of inquiries converted in to real sales

The percentage of sales cancelled and refunded

Customer Support

Number of service requests (trouble tickets) resolved

Mean time to resolve service requests

Customer satisfaction rate


Number of units to be produced

The percentage of work output to be redone or that is rejected

Average production costs of items

The Performance Reviews are to be conducted regularly (using certain accepted pattern) in order to determine value of success indicators by different areas. These reviews are necessary to define if an employee works just properly, or if he is worth of additional reward for his achievements, or he needs some solution to improve his performance. There are different methods to gather information for such reviews, for example: data from official documents, manager's appraisal, team and peer appraisals, 360-degree appraisal, and others.

3) How Employee Performance Management works?

Employee Performance Management is carried through the five interrelated sub-processes:

  • Planning setting up performance expectations and clear, measurable targets;
  • Monitoring continual controlling of employee performance through capturing KPIs;
  • Developing researching and applying effective methods to rectify troubles in performance;
  • Rating comparing performance over time or across a group of employees;
  • Rewarding recognizing employees individually ( and as members of teams) for their work;

4) General way to manage Employee Performance:

  1. Identify the major responsibilities for each position at your company (also called performance elements );
  2. Distinguish the critical performance elements which form up a core of the position;
  3. Identify appropriate methods and effective KPIs to appraise these performance elements;
  4. Design the performance standards (or plans) for each element of the job to describe how well an employee needs to effectuate each of the elements in terms of quality, quantity, costs, manner of performance, timeliness, etc;
  5. Communicate the performance elements, standards and performance plans to each employee;
  6. Make sure your employees understand and accept these expectations and procedures as feasible and fair;
  7. Determine appraisal process and period the way to review performance and how often you are going to do this to get an adequate picture of progress and trends (it should be ongoing yearlong process divided into smaller periods). Make sure you get necessary level of details;
  8. Communicate this information to your employees and make sure they understand performance review mechanism;
  9. Accurately document all information gathered during reviews. Keep detailed notes to capture all possible employee compliments and complaints;
  10. Evaluate each employee by using the established benchmarks. Identify successes, failures and trends;
  11. Provide ongoing feedback on a regular basis to support motivation of employees and to let them know their problems. Arrange frequent face-to-face meetings with the staff to discuss the issues or to praise for achievements;
  12. Use employees' last review results as benchmark standards for their next performance review;
  13. Conduct performance ratings over time or across a group of employees to know your champions and the average level of performance;
  14. Design performance-based mechanism of pay to compensate and motivate efforts of employees;

5) A way to manage Performance of Employees with VIP Task Manager:

VIP Task Manager is a product that stands for collaboration between managers and employees, so it allows employers to create interactive performance management plans explained in terms of particular tasks. Let's consider simple step-by-step instruction to manage performance of employees in this product:

Instruments to be used:

  • Task List or Task Tree modes;
  • Custom task attributes;

How to plan Employee Performance:

  1. Set requirements/standards on Manner of Performance:
    • Create a new task, or sequence of tasks;
    • Formulate their names, make necessary work descriptions in "Notes";
    • Attach process-descriptive documents directly to task(s), using tab "Attachments";
  2. Set requirements/standards on Timeliness:
    • Plan Start and Finish dates (also Due date if required) to set time constraints;
  3. Set requirements/standards on Quantity and Costs :
    • Use option "Custom fields" to enrich your tasks with special numeric attributes for planning quantifiable requirements.
    • You may arrange this in the following manner: one field is for planning certain quantitative requirement, another one is for reporting actual results, third one is to calculate difference between them, check the example:
      • Add a custom field "Budget" of Float type to set maximal expected Costs allowed for this work (attach to this task a document with a detailed job estimate if required);
      • Create a custom field "Actual Costs" of Float type to input information on real Costs (this data can be reported and updated by the assigned employee himself);
      • Create a custom field "Budget Left" to be calculated by a formula "Budget-Actual Costs";
  4. Create more of KPI custom attributes (see the Customization Guide of KPI ideas);
  5. Assign task(s) to appropriate performer(s);
  6. Customize Task List view to be convenient (create interface layout):
    • Discard all unwanted fields;
    • Set out task fields to be visible (performance-related);
    • Save interface layout;

How to monitor Employee Performance:

  1. Filter or group (on Task List) tasks by assigned employees;
  2. Use real-time collaboration capability of VIP Task Manager to monitor statuses of the tasks assigned to them and capture the ongoing progress;
  3. Monitor standard and custom task attributes to check values of KPIs;
  4. Sort KPIs by maximal and minimal values;
  5. Use Footers to define Average or Sum values of KPI where appropriate;

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