How to Create Performance Standards for Your Company

How to Create Performance Standards for Your Company

When does an employee deserve a reward or promotion? What defines team excellence? What makes your business successful? The answers depend on your organization.

Every role and position in any company has its unique description and responsibilities. But there are also indicators that gauge work quality and performance.

The same work rate and output that makes a worker excellent in one organization may qualify them for a “satisfactory” score in another. That’s because the performance standards in both businesses are different.

Apart from outlining the responsibilities that come with each role, companies also tell workers how well they should execute those duties. Businesses also set standards for themselves to meet.

They use different methods to communicate and assess those standards.

That said, they are now dropping old management systems that reduce employee performance. According to Gartner’s 2019 Performance Management Benchmarking Survey, 81% of HR executives are revamping how they manage and evaluate performance. 

So what are performance standards and how do companies implement them? This post will talk about the meaning of performance standards and tips on how to create them.

What are Performance Standards?

Performance standards are drawn from performance elements. These elements are things a company expects an employee to do. They fall within the worker’s role and job description.

For example, an in-house SEO specialist could be tasked with tracking website traffic, assessing and fixing issues, coordinating with link builders, managing web content, and boosting and maintaining site traffic.

Now, those are the SEO manager’s performance elements. The performance standards inform them how well they’re expected to execute those elements. 

So, for example, the SEO specialist should be able to provide a weekly report with consistent accuracy of 95%, make sure there are fewer than 3 errors at the end of each week, effectively coordinate with team builders, and maintain 3,000 weekly web visitors.

Employees will be evaluated based on how they meet these standards. And the standards can be used as thresholds that determine appraisal.

Performance standards are tools deployed to ensure organizations meet their goals and targets. Companies set individual and team standards by factoring in their bigger collective goals. That’s why these standards must be set with the company’s central goal in mind.

Different Areas Where Employees Can be Evaluated

Performance standards are not just created for individual employees. Instead, it’s a multi-level organizational process.

There are different common performance evaluation levels. They include strategic, operational, and individual performance

You must account for these levels whenever you create your company’s performance standards as they all affect your organization.

Let’s break them down.

Strategic Performance Management

This level focuses on the organization’s main goals and objectives. It is used to evaluate and set the benchmark for the company’s overall success.

Strategic performance standards are usually long-term goals whose successes are determined when teams and individuals achieve their performance standards.  

In most cases, companies manage strategic performance to trickle down to day-to-day goals and milestones.

Operational Performance

The purpose of this management level is to set a standard on how activities within the company should be run. Operational performance standards focus on specific projects on departmental levels and how they’ll help the organization meet its central goals.

So, the idea is to make sure:

  • Teams and departments are executing projects and other activities satisfactorily.
  • Operation activities align with the company’s overall strategy.
  • Team activities and projects are enough to help the company achieve its goals.

These standards mostly depend on teamwork and collaboration to work.

Individual Performance

This is the grassroots level of performance management. Its intention is to:

  • Let each employee know what the company expects of them 
  • Evaluate each individual employee’s performance. 
  • Set standards and work goals, 
  • Assess worker output 
  • Fortify employee learning and technical skills.
  • Focus on letting individual employees know what the company expects of them. 

Managers use performance standards as a point of reference when reviewing each person’s work. So, in the case of the SEO specialist, you’re measuring what they achieved against what you expect them to achieve.

In What Areas Should You Set Standards?

There are different aspects of an employee and department’s work where you can set standards.

It doesn’t start and stop at defining their work duties and telling them how you expect them to deliver.

From professionalism to communication, you can motivate workers to maintain the highest organizational standards. Let’s break them down.

Teamwork

Teamwork is important for departments and teams that pursue specific projects and activities. You can set standards on how team members and employees should work together. 

These standards help define how workers are expected to collaborate, solve problems together, and consult with one another. 

For example, your company may expect a free flow of information and evaluate a worker based on how much they helped and worked with colleagues.

Professionalism

This refers to each employee’s behavior and work ethic. It covers adherence to workplace culture, general office etiquette, decorum, punctuality, and due process. This performance standard can be measured through questionnaires sent to colleagues and assessments by managers.

You can set performance standards for teams and individuals based on professionalism. 

You can also expect teams to follow workflow and reporting protocols, respect deadlines, and synergize without issues while working on projects.

Communication

Effective communication is among the competencies that can make or break a company’s goals and strategies. That’s why companies tell workers how and when they expect them to communicate.

You can set a standard for communication in a way that shows workers the critical nature of talking to each other and exchanging ideas.

Time Management

While meeting deadlines, delivering great work, higher output, and enhanced efficiency are part of general performance standards, time management is also an important factor.

How workers manage their time determines their level of productivity and efficiency. So, organizations can base performance standards and set an acceptable level of time management for appraisal.

Accountability

Accountability is another critical measure of workplace competence. It is about setting well-defined expectations and holding people to those expectations.

Employees are more dedicated and focused to work when they know the level of their responsibility.

Why Are Performance Standards Important?

Performance standards help employees see what they’re expected to achieve. It provides the required framework that will guide their work process, so they know they’re underperforming or producing the right results.

The standards also help employers to accurately measure productivity and work performance for individuals and teams.

Other benefits of performance standards include:

  • Fair evaluation of different workers in the same roles.
  • Enhanced communication between workers and managers.
  • Promotion of common understanding between employers and employees about work expectations.
  • Well-defined roadmaps and strategies to achieve organizational goals.

How to Create Performance Standards

Creating performance standards follows different step-by-step methods. First, you have to consider different factors such as:

  • Your company
  • Its goals
  • Your work structure
  • The types of projects you handle

Let’s walk you through the different steps you must take to create performance standards.

Identify Tasks that Should Make it to the Performance Standards

While each worker’s role may be broad, you can identify the core tasks that should be included in the performance standards. This way, you’ll be more decisive and the measurements will be less distracting.

Allowing workers to know what’s critical helps set their work priorities right. You’ll also be making the performance standards brief and more manageable.

Using Measurable Standards Help

Sometimes, it’s not enough to just tell workers you expect them to do something “well.” Providing numbers and metrics when you can will give them a clear idea of what you want to achieve.

For example, instead of telling your SEO specialist to maintain a high number of weekly blog posts, you can let them know that the acceptable standard is 4 blog posts per week. That said, it’s okay to not put a number on things like communication and collaboration, but you can emphasize their importance.

You can use other parameters such as:

  • Creativity
  • Time management
  • Productivity
  • Beating deadlines
  • Leadership
  • Professionalism
  • Efficiency

Create a Plan for Low Performance

Setting your performance standards also involves determining what failure looks like. You should clearly define circumstances that show workers haven’t met the standards you set.

These definitions make using numbers all the more important. 

You should also create a plan for workers who don’t meet their expectations. For example, how many times do they have to commit an error before they’re deemed to have performed too low?

Then, when it gets to that level, you can trigger your performance improvement plans by providing the right training and support.

In some cases, identifying low performance levels may mean that the role doesn’t suit the employee or some team members will function better in other departments.

Individual Performance vs Team Performance

We’ve shown you the different levels of performance management. So, when setting your standards, the best practice is determining what’s right for an individual employee and what suits a team.

Teams Contain Different Individuals and Must be Handled Accordingly

In this case, you’re putting a benchmark on the collective efforts of more than one employee.

So, the tasks should be broad and assigned to the team as a unit. They’re collectively responsible for projects that require collaboration and must be accountable. In such cases, everyone is affected equally.

Individual Performance Standards Should be Handled with Precision

While individual performance standards are easier to develop and track, you must ensure you’re precise. You don’t want to burden employees with too many responsibilities only fit for teams.

Their standards can be linked with the team’s broader responsibilities. But it should be focused on their individual tasks and their ability to collaborate with others.

Work from Home Performance Standards

Work from home situations are different from in-office arrangements. That’s due to the obvious reason of different work environments and structures.

You have to consider different factors and parameters and adjust your standards of performance accordingly.

While the core responsibilities for each job will remain constant, you have to tweak certain standards. They include communication, collaboration, responsiveness, and teamwork.

Since team members now work from home, there’ll be challenges in terms of communication and coherence.

So, you must emphasize the need to communicate and bump up the scales in that regard.

Tips on Creating Effective Performance Standards

Let’s show you different tips that will make setting and maintaining performance standards easier.

Performance Standards Must be Job-Specific

When setting standards for individual positions, make sure they’re streamlined to the job roles, not the employee. 

Whether the position changes hands or not, the standards should remain the same regardless of who holds the position.

In the same vein, the performance standards should not change if more than one person handles the same set of responsibilities. 

For example, if you have multiple customer service representatives, their performance standards must be identical.

Use Clearly Defined Goals and Make Sure Standards Are Easy to Understand

How you communicate your team’s or employee’s performance standards affects how they achieve those standards.

So, make sure you use clear communication strategies to define the expectations for each role.

You should be specific about tasks included in the standard. This way you can deliver a straightforward expectation without clutter.

Also, every layer of the performance standards should be clearly communicated. You will likely face issues with alignment when workers don’t know what the organization is trying to achieve. Your mission statement and targets as a company should be unambiguous in a way that everyone, down to junior workers, knows what success means for the business.

Assess Employee Strengths and Weaknesses

Knowing the strengths and weaknesses of your employees helps you make the right decision in terms of distributing workload. 

While you can’t change the performance standards for each position because for an employee, you can make personnel changes. So, evaluating the right roles for each worker based on their talents sets them up to excel.

Evaluate Workload

You must incorporate every employee’s workload into the performance measures. You have to understand the amount of work they must do to achieve results.

This way, you’re able to set reasonable standards and assign the right tasks. You’re also able to associate the right level of performance with each position.

Effective workload management involves assessing projects and your staff’s scope of work. It allows you to understand whether your current workforce is sufficient to handle your projects, can cope with additional tasks, and deal with incidents or emergencies.

Be Realistic

Your performance standards have to be realistic to be sustainable. On the other hand, they don’t have to be too simple.

You need to maintain a fair level of challenge that requires workers to put in their best. That way, they’ll stay motivated and prepared for tough situations. 

Workers also have limits. So if performance standards are unrealistically tough, they won’t meet them, and your company will suffer for it.

So, evaluating your workload is key to ensuring you set the right balance between not-so-easy and unrealistic tasks.

Track and Monitor Performance

Tracking and monitoring employee performance provides you with necessary data to adjust and improve performance standards where necessary.

Indeed, you don’t have to make changes after tracking one employee. Instead, you can analyze data from multiple workers to identify patterns. This way, you can find out if the standards are unrealistic or too easy.

The data can also help you redefine the role as you discover tasks that should be substituted or eliminated.

You can use a time tracking tool such as Traqq to monitor an employee’s work rate and productivity. Keeping tabs on how many tasks they can complete over a specific period gives you a clear idea of their capabilities.

Set Examples

Examples show a clearer picture of what needs to be achieved and how to achieve them.

You can use former employees who consistently performed beyond standards as models for what you expect.

That way, workers have something tangible to aspire to, and can even have mentors.

Don’t Just Set Standards, Support Employees

Indeed, setting performance standards tells your team what needs to be done and how. The policy is a great way to ensure your company meets its overarching targets.

That said, laying out what you expect isn’t enough. You must provide all the help that workers need to meet their targets.

There are different ways to do that.

Provide the Right Tools

The right tools cover digital and offline resources that will help workers excel at their job. You shouldn’t give them any excuse or reason to fall short. 

Their performance standards should be attained by sheer hard work, dedication, creativity, and teamwork.

Depending on your organization and the services it provides, there are different tools that you can provide to make things work smoothly for your employees.

For example, you can provide tools such as file sharing, project management, and communication solutions for work-from-home employees.

If you manage a team of developers, you can provide the full package of cloud version control solutions like GitHub.

Avoid Micromanagement

You need an enabling environment to allow workers to shine. Micromanagement kills such an environment.

Many small business owners make the mistake of believing that things can only be done right their way. 

In reality, it shows a lack of confidence in employees, causes a drop in morale, decreases productivity, and makes you lose focus on critical things.

Accountemps studied the impact of micromanagement. According to the findings reported in PR Newswire, 55% of respondents said it affected their productivity and 68% reported that it reduced their morale.

On the other hand, if you focus on results rather than processes, you’re empowering your workers with the courage and morale they need to meet your performance standards.

To avoid micromanagement, clearly define your expectations and judge workers based on results. You can also organize check-ins and open the lines of communication so workers can update you about any changes in the work process.

Manage Workload Efficiently

Managing workload efficiently involves knowing the right person to place in specific teams and positions.

You don’t have to change performance standards because of an individual’s needs. Instead, you can move the worker to a more fitting role.

Sometimes, people are great with specific tasks but will struggle to work within a team.

Encourage Communication

Communication helps to boost teamwork and collaboration. So, ensure you encourage workers to always communicate when there’s a need.

Use meetings and team-building activities to improve the social cohesion in the workplace. That way, you’re improving the team’s bond and breaking psychological communication barriers.

Prevent Burnout

Research has shown that working long hours can reduce productivity and even cause fatal health issues.

Workers won’t be able to consistently meet your performance standards if they always have to work overtime.

You must evaluate workload and make sure employees don’t have to put in extra hours to meet their goals.

You should also use monitoring tools to determine when workers have too much on their plate or have worked more than they should.

Track Productivity

Tracking your workers’ productivity helps you to identify individuals and teams who are struggling. That way, you can engage proactive measures to determine and provide the right type of support.

Reward and Recognize Workers

Setting up a reward and recognition program allows you to keep workers motivated. According to research by Quantum Workplace, employees are 2.7 times more likely to be engaged when they believe they’ll be recognized.

So, ensure you never miss out on appreciating an employee for meeting performance standards. This way, they’ll have reasons to continue producing great numbers. They’ll also believe that their work matters.

Key Takeaways

There’s no universal solution or template for creating performance standards. The trick is to start by defining your standards at the organizational level, then create standards for teams and individuals that will align with your company’s main goals.

Remember to be transparent and provide the enabling environment to help workers succeed.

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