{"id":607,"date":"2023-06-15T01:13:54","date_gmt":"2023-06-15T01:13:54","guid":{"rendered":"https:\/\/mudabicara.com\/en\/?p=607"},"modified":"2023-06-15T01:13:54","modified_gmt":"2023-06-15T01:13:54","slug":"what-are-performance-indicators-purpose-how-to-measure-and-function","status":"publish","type":"post","link":"https:\/\/mudabicara.com\/en\/what-are-performance-indicators-purpose-how-to-measure-and-function\/","title":{"rendered":"What are Performance Indicators? Purpose, How to Measure, and Function"},"content":{"rendered":"

In an organization or company, the existence of performance indicators plays an important role because it affects the achievement of organizational or company goals.<\/span><\/span><\/p>\n

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.<\/span><\/span><\/p>\n

Definition of Employee Performance Indicators<\/span><\/span><\/span><\/h2>\n

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.<\/span><\/span><\/p>\n

Read Also : Organizational Structure of Large, Medium, Small Hotels and Their Duties<\/a><\/strong><\/span><\/pre>\n
Therefore, companies must formulate these indicators so that company goals can be achieved properly.<\/span><\/span><\/p>\n
In addition to achieving company goals, ability indicators are also useful for knowing the performance of employees.<\/span><\/span><\/p>\n
Not only that, this ability indicator can also improve the work performance of employees in the future in achieving company goals.<\/span><\/span><\/p>\n
Purpose of Key Performance Indicators<\/span><\/span><\/span><\/h2>\n
Everything that is made must have a purpose, as well as performance indicators.<\/span><\/span><\/p>\n
Companies that formulate\u00a0 <\/span><\/span>employee performance indicators<\/span><\/span> \u00a0must have useful goals for the progress of the company.<\/span><\/span><\/p>\n
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.<\/span><\/span><\/p>\n
So, what are the benefits of measuring these achievements and successes?<\/span><\/span><\/p>\n
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.<\/span><\/span><\/p>\n
Not only that, the purpose of formulating ability indicators is as a reference in preparing better work management in the future.<\/span><\/span><\/p>\n
6 Employee Performance Indicators<\/span><\/span><\/span><\/h2>\n
Performance indicators play an important role in a company because they can determine the quantity and quality of employee performance.<\/span><\/span><\/p>\n
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.<\/span><\/span><\/p>\n
1. Quality<\/span><\/span><\/span><\/h3>\n
The first indicator is quality. <\/span>The quality of the performance of workers can be measured by the quality of the tasks performed by employees.<\/span><\/span><\/p>\n
Read Also : 10 Ways to Start a Good Business<\/a><\/strong><\/span><\/pre>\n
In addition, quality indicators are also very crucial because they affect the progress and setbacks of a company.<\/span><\/span><\/p>\n
2. Quantity<\/span><\/span><\/span><\/h3>\n
The next indicator is quantity. <\/span>Quantity is the amount of work that employees produce.<\/span><\/span><\/p>\n
The amount of work can be assessed against targets when planning job descriptions, so assessing the quantity of performance becomes easier.<\/span><\/span><\/p>\n
3. Punctuality<\/span><\/span><\/span><\/h3>\n
The next performance indicator is timeliness. <\/span>Punctuality is also crucial in work because it relates to work targets.<\/span><\/span><\/p>\n
4. Effective Use of Resources<\/span><\/span><\/span><\/h3>\n
The effectiveness of the use of company resources is also an indicator of capability.<\/span><\/span><\/p>\n
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.<\/span><\/span><\/p>\n
Therefore, the effective use of resources is included in\u00a0 <\/span><\/span>HR planning<\/span><\/span> \u00a0in order to improve employee performance in achieving company goals.<\/span><\/span><\/p>\n
5. Independent<\/span><\/span><\/span><\/h3>\n
Independent attitude is also one of the crucial indicators of employee ability in assessing employee performance.<\/span><\/span><\/p>\n
Although employee independence is important, it does not mean that you have to eliminate the ability to work in a good team.<\/span><\/span><\/p>\n
6. Commit<\/span><\/span><\/span><\/h3>\n
The next performance indicator is commitment. <\/span>Commitment is also an important indicator because it can determine employee motivation at work.<\/span><\/span><\/p>\n
How to Measure Employee Performance<\/span><\/span><\/span><\/h2>\n
After you know what indicators you can use to assess employee performance, maybe you are also wondering how to measure employee performance.<\/span><\/span><\/p>\n
The way to measure employee performance is by using the Key Performance Indicator (KPI) which is usually integrated with\u00a0 <\/span><\/span>the HRIS application<\/span><\/span> \u00a0that is being used.<\/span><\/span><\/p>\n
Read Also : Corporate Financial Transactions: Meaning, Types and How to Make them<\/a><\/strong><\/span><\/pre>\n
Formulating KPIs is also not easy and there are several aspects that you need to pay attention to as explained below.<\/span><\/span><\/p>\n
1. Determine Objectives<\/span><\/span><\/span><\/h3>\n
The first step in the formulation of KPIs is to determine objectives first. <\/span>The objective is the goal of the KPI formulation itself.<\/span><\/span><\/p>\n
For example, the purpose of establishing KPIs is as a tool to measure employee performance in achieving company goals.<\/span><\/span><\/p>\n
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.<\/span><\/span><\/p>\n
2. The Method Used<\/span><\/span><\/span><\/h3>\n
The second aspect that needs to be considered in preparing KPIs is determining the method to be used.<\/span><\/span><\/p>\n
As an example of a performance indicator, you can use the reward and punishment method to increase employee performance and motivation.<\/span><\/span><\/p>\n
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.<\/span><\/span><\/p>\n
Thus, the method will run straight with the strategy for achieving company goals.<\/span><\/span><\/p>\n
3. Evaluation<\/span><\/span><\/span><\/h3>\n
The third way to formulate KPIs for employee performance indicators is by conducting an evaluation process.<\/span><\/span><\/p>\n
What is meant by evaluation in this context?<\/span><\/span><\/p>\n
Evaluation is a crucial process that can find out the factors that cause employee performance to decrease and can find solutions to these problems.<\/span><\/span><\/p>\n
In addition, evaluation can also make a clearer picture of the company’s problems and challenges, making it easier to solve.<\/span><\/span><\/p>\n
Therefore, measuring and assessing employee performance is important to be carried out by company HR managers with\u00a0 <\/span>\u00a0good <\/span><\/span>HR management in order to support the company’s progress.<\/span><\/span><\/p>\n
Read Also : What is a Business Process? Types, Functions and Benefits<\/a><\/strong><\/span><\/pre>\n
Key Performance Indicator Functions<\/span><\/span><\/span><\/h2>\n
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.<\/span><\/span><\/p>\n
So, here are 4 functions or benefits of these indicators that you need to know.<\/span><\/span><\/p>\n
1. Part of Intermediate Planning<\/span><\/span><\/span><\/h3>\n
The function of the first performance indicator is as part of intermediate planning in an agency or company.<\/span><\/span><\/p>\n
What is intermediate planning?<\/span><\/span><\/p>\n
Intermediate planning is a plan that is executed in the medium term in the future, which is around 1-3 years.<\/span><\/span><\/p>\n
So, in preparing the plan, the agency or company must know about the performance of its employees first.<\/span><\/span><\/p>\n
Then, the company can plan and determine policies according to the employee’s performance.<\/span><\/span><\/p>\n
2. Performance Monitoring and Controlling Tools<\/span><\/span><\/span><\/h3>\n
other capabilities also serve as a tool to monitor and control employee performance.<\/span><\/span><\/p>\n
This is because these indicators can provide information about employees about their performance within a certain time frame.<\/span><\/span><\/p>\n
An example is monitoring employee commitment in terms of attendance or absences with\u00a0 <\/span><\/span>an online attendance application<\/span><\/span> . <\/span>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.<\/span><\/span><\/p>\n
Read Also : What is the Meaning of Accounting? Definition and Benefits<\/a><\/strong><\/span><\/pre>\n
Well, companies can also control employee performance so that they are always consistent and show positive progress.<\/span><\/span><\/p>\n
3. Help evaluate employee performance<\/span><\/span><\/span><\/h3>\n
Another function of performance indicators is that employees can provide an overview of the performance of the company’s employees.<\/span><\/span><\/p>\n
So, with these indicators, companies can assess whether employee performance is positive or negative.<\/span><\/span><\/p>\n
So, in this way the company can evaluate employee performance to be more consistent in maintaining good performance.<\/span><\/span><\/p>\n
Conversely, if the performance is negative then it needs to be repaired.<\/span><\/span><\/p>\n
4. Helps Measure Employee Accountability<\/span><\/span><\/span><\/h3>\n
The last benefit is that it can help in measuring employee performance accountability in a company.<\/span><\/span><\/p>\n
Accountability is important in agencies or companies.<\/span><\/span><\/p>\n
If an employee has good accountability, the more advanced the company or agency will be.<\/span><\/span><\/p>\n
So, this tool to measure employee accountability is called an employee indicator.<\/span><\/span><\/p>\n
This is an explanation of employee performance indicators that you need to know.<\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
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