In my previous post I talked about how it makes sense for organizations to review their performance using detailed criteria that is far more comprehensive than just historical financial information. In this post I will talk about how it makes sense for businesses to evaluate their employees’ performance using a similar framework.

An organization’s performance is driven by three key areas:

Purpose – How clearly does an organization convey to its stakeholders why it exists, what vision and direction is it passionate about moving toward and what are its core values?

People – How does an organization recruit, develop its employees and what incentives and rewards exist that will align its people who will drive that purpose?

Process – How do the policies, procedures, information systems, technology and governance an organization has in place ensure safety, quality, consistency and profitability in everything it does?

By collecting meaningful answers to these questions, it is easy to gauge what is influencing an organization’s performance. These are the three same areas that an organization’s historical and likely future performance should be measured against.

So what does this all mean? Well… if an organization’s success depends on these three key areas, why wouldn’t we integrate a large part of these themes into a framework that measures employee success? After all, it makes sense to ensure consistency and alignment. It is true that many organizations do measure employees on a lot of these same criteria, but the reality is even in these organizations a lot of key elements are missed.

With that, let’s begin with purpose. All great success begins and ends with purpose. Employee appraisal systems should therefore include a detailed section about an individual’s alignment with each organizational value and how they own it, live it and promote it. How well have they played their part in bringing the organization one step closer towards achieving its vision? Finally, how do they contribute in delivering the organization’s mission to others? A culture that is taught to believe in the vision, which is reinforced with performance appraisals, is a powerful way to achieve alignment between employees and the broader organization.

Next, let’s talk about the element of people. Without a clear and well-known purpose, it is difficult to achieve well guided performance. However, without the right people, who are passionate and motivated to achieve that purpose, an organization will simply never gain any traction. So, a good appraisal system should contain a detailed focus on an employee’s recruitment skills. Yes, that’s right, every employee has a role to play in the recruitment of new talent. Whether they are a manager or front-line employee, the reality is that every employee has the ability to positively affect an organization’s recruitment efforts. Basic things such as referrals, proper screening, proper onboarding and training, are all areas where employees can make a difference and therefore be evaluated against these skills. Similarly, employees can be assessed in detail regarding their efforts to develop & reward those around them.

Last on the list we will discuss process. Business processes are something that we often include in employee appraisals; however, not to the level of detail required to achieve organizational success. Efficient processes that ensure continuous improvement, quality and allow ownership and senior management to have a handle on the up-to-date pulse of a business, at all times, is just as important as having the right people that know where the organization is headed. Again, the right appraisal framework should incorporate a detailed element around business processes. For example, how often do we include how well a line employee knows the profitably of their post? Or, what contribution has an employee made towards ensuring quality in an organization? Most companies are hyper focused on things like safety, and this is a giant step in the right direction to breed success. Over time, we have found that by including more detail around an employee’s contribution towards process efficiency and product quality/cost will bring further alignment between employees and an organization’s goals.