In an organization or company, the existence of performance indicators plays an important role because it affects the achievement of organizational or company goals.
So, here’s a full review of what an employee capability indicator is and questions that often arise regarding this that you need to know.
Definition of Employee Performance Indicators
The definition of performance indicators according to experts is a measure of employee performance in a particular organization or company in achieving organizational/company goals.
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Therefore, companies must formulate these indicators so that company goals can be achieved properly.
In addition to achieving company goals, ability indicators are also useful for knowing the performance of employees.
Not only that, this ability indicator can also improve the work performance of employees in the future in achieving company goals.
Purpose of Key Performance Indicators
Everything that is made must have a purpose, as well as performance indicators.
Companies that formulate employee performance indicators must have useful goals for the progress of the company.
The first goal is that the company can get a measure of the extent to which the achievement and success has been achieved by the company in a certain period of time.
So, what are the benefits of measuring these achievements and successes?
The benefit is that this measure can be a reference in improving the quality of the company’s work performance, especially the work performance of its employees.
Not only that, the purpose of formulating ability indicators is as a reference in preparing better work management in the future.
6 Employee Performance Indicators
Performance indicators play an important role in a company because they can determine the quantity and quality of employee performance.
Based on the explanation from Robbins (2006), there are 6 indicators of employee ability that you can use to assess the performance of these employees.
1. Quality
The first indicator is quality. The quality of the performance of workers can be measured by the quality of the tasks performed by employees.
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In addition, quality indicators are also very crucial because they affect the progress and setbacks of a company.
2. Quantity
The next indicator is quantity. Quantity is the amount of work that employees produce.
The amount of work can be assessed against targets when planning job descriptions, so assessing the quantity of performance becomes easier.
3. Punctuality
The next performance indicator is timeliness. Punctuality is also crucial in work because it relates to work targets.
4. Effective Use of Resources
The effectiveness of the use of company resources is also an indicator of capability.
If employees in a company effectively use the company’s resources, such as money, labor, technology and raw materials, the work results will be even better.
Therefore, the effective use of resources is included in HR planning in order to improve employee performance in achieving company goals.
5. Independent
Independent attitude is also one of the crucial indicators of employee ability in assessing employee performance.
Although employee independence is important, it does not mean that you have to eliminate the ability to work in a good team.
6. Commit
The next performance indicator is commitment. Commitment is also an important indicator because it can determine employee motivation at work.
How to Measure Employee Performance
After you know what indicators you can use to assess employee performance, maybe you are also wondering how to measure employee performance.
The way to measure employee performance is by using the Key Performance Indicator (KPI) which is usually integrated with the HRIS application that is being used.
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Formulating KPIs is also not easy and there are several aspects that you need to pay attention to as explained below.
1. Determine Objectives
The first step in the formulation of KPIs is to determine objectives first. The objective is the goal of the KPI formulation itself.
For example, the purpose of establishing KPIs is as a tool to measure employee performance in achieving company goals.
Now, if you have made clear goals or objectives, then you can then determine which components are in accordance with company goals and have been mutually agreed upon.
2. The Method Used
The second aspect that needs to be considered in preparing KPIs is determining the method to be used.
As an example of a performance indicator, you can use the reward and punishment method to increase employee performance and motivation.
As a reference, the method that you need to use is the method that is in accordance with the objectives or goals of the company.
Thus, the method will run straight with the strategy for achieving company goals.
3. Evaluation
The third way to formulate KPIs for employee performance indicators is by conducting an evaluation process.
What is meant by evaluation in this context?
Evaluation is a crucial process that can find out the factors that cause employee performance to decrease and can find solutions to these problems.
In addition, evaluation can also make a clearer picture of the company’s problems and challenges, making it easier to solve.
Therefore, measuring and assessing employee performance is important to be carried out by company HR managers with good HR management in order to support the company’s progress.
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Key Performance Indicator Functions
In addition to the things that have been explained before, you also need to know what the function of the main performance indicators is for the company.
So, here are 4 functions or benefits of these indicators that you need to know.
1. Part of Intermediate Planning
The function of the first performance indicator is as part of intermediate planning in an agency or company.
What is intermediate planning?
Intermediate planning is a plan that is executed in the medium term in the future, which is around 1-3 years.
So, in preparing the plan, the agency or company must know about the performance of its employees first.
Then, the company can plan and determine policies according to the employee’s performance.
2. Performance Monitoring and Controlling Tools
other capabilities also serve as a tool to monitor and control employee performance.
This is because these indicators can provide information about employees about their performance within a certain time frame.
An example is monitoring employee commitment in terms of attendance or absences with an online attendance application . This will provide information on how many times this employee is late or working overtime, so the company can make the next decision for that employee.
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Well, companies can also control employee performance so that they are always consistent and show positive progress.
3. Help evaluate employee performance
Another function of performance indicators is that employees can provide an overview of the performance of the company’s employees.
So, with these indicators, companies can assess whether employee performance is positive or negative.
So, in this way the company can evaluate employee performance to be more consistent in maintaining good performance.
Conversely, if the performance is negative then it needs to be repaired.
4. Helps Measure Employee Accountability
The last benefit is that it can help in measuring employee performance accountability in a company.
Accountability is important in agencies or companies.
If an employee has good accountability, the more advanced the company or agency will be.
So, this tool to measure employee accountability is called an employee indicator.
This is an explanation of employee performance indicators that you need to know.