Assessing the performance of the organization's personnel. Methods and goals of personnel assessment: how to turn employees from a tool into the brain center of the company

Business plans 02.01.2024

Business plans

Recently, the scope of application for the procedure for assessing employee productivity has been expanded - it began to be used not only for top managers. Assessing key performance indicators (KPIs of employees) has ceased to be a distinctive feature of foreign companies; practical examples can be found in different industries and for a variety of categories of employees, from marketers and business analysts, to financiers and economists.

The assessment of managers based on competencies is carried out by Alexey Shirokopoyas, Expert in the development and assessment of management competencies. Developer of educational and gaming programs. Founder of the project. 8-926-210-84-19. [email protected]

Typically, KPI-based incentive systems measure key performance indicators (KPIs of employees) because they are based on SMART criteria. Therefore, such motivation systems are convenient for application to employees employed in profit centers, where there are objective and, most importantly, measurable criteria: sales volumes, financial key performance indicators (KPIs of employees), deadlines, etc. - and work based on SMART -goals and objectives, has a specific result. However, not all types of work may have such goals and objectives. For example, how to evaluate process activities (which do not imply the achievement of a specific result), where there are no SMART tasks and those who are “remote” from the economic and operational processes of the company - “clerks”: secretary, call center operator, support system administrator, HR inspector, accountant, HR officer, etc.? These workers (back office) perform routine functions, and, unlike the work of managers, the work of “clerks” is difficult to evaluate. How to evaluate the quality of the work of this category of personnel?

Key performance indicators (KPIs of employees) - what should you pay attention to?

In this case, it is necessary to evaluate the performance of functions. To a large extent, this is only a qualitative assessment, and, as you know, a qualitative assessment is an expert assessment. The methodology proposed in the article helps to evaluate work from this aspect.

Every manager values in his employees the ability to do work quickly and efficiently. And he is saddened when these demands are not met. Often he has to put up with this and hope that he will someday find a better employee, but the same thing happens with a new employee. Why is this happening? To answer this question, let's delve into the nature of the parameters under consideration and their relationship.

What is "working speed"? From physics we know that speed is the ratio of the amount of work to the time it takes to complete it. This means that the manager evaluates his employee according to three parameters: the amount of work, the time it takes to complete it, and the quality of the work.

Thus, any activity can be assessed by three key performance indicators (KPIs of employees), let's call them the “triad of effectiveness” (see appendix):

Amount of work– production rate, share of excess production, additional assignments beyond the job description, etc.
Quality of work– compliance with technology, error-free, absence of customer complaints, defects, etc.
Work completion time– compliance with the deadline, early completion, exceeding deadlines, etc.

Moreover, each manager can decide for himself what kind of work he evaluates:

the number of operations by job function (for example, the function of a lawyer is the preparation of contracts, and the number of contracts is the number of operations in this function);
the scope of functions exceeds the standard, which is determined by the job description (for example, according to the standard, a lawyer must process at least 100 contracts monthly);
solving additional tasks, instructions from the manager beyond job functions (projects, one-time tasks, etc.).

However, it is not so easy to “reconcile” speed and quality. Indeed, you can see that it is easy to implement only any two parameters of the “triad” and it is difficult to ensure that all tasks are completed on time, with high quality and in the required volume. It is difficult to balance such a system - and this is the responsibility of the manager.

Most often, the work is completed efficiently and on time, but perhaps this will not be the entire amount of work. Often an employee manages to complete all tasks, but either with a decrease in the quality of some of them, or with a violation of deadlines.

And management can completely forget about expectations of early completion of all tasks while maintaining excellent quality. Moreover, managers are accustomed to seeing an employee’s ability to complete an increased volume of tasks ahead of schedule and with excellent quality as signs of his insufficient workload, and not of talent. Is this what determines the modern personnel trend of “searching for talent”? The dream of employers about so-called talent is the dream of employees who are able to consistently fulfill these three criteria in full. Agree, there are not so many of them.

Taking into account tasks and functions in itself is a creative matter. They have different significance, which means they should have different weights. In addition, all key performance indicators (KPIs of employees) can have their own weight in the system (see Table 1), which is determined by the manager based on current tasks, characteristics of work, etc., thereby highlighting what is most important. For example, deadlines are important for the selection department, and quality is important for accounting.

The final grade is calculated as a weighted average of the grades. This is the sum of the products of the assessment for each of the key performance indicators (KPIs of employees) and its weight:

35% x 3 + 40% x 4 + 25% x 1 = 1.05 +1.6 + 0.25 = 2.9 (with a maximum of 4 points)
or
35% x 75% + 40% x 100% + 25% x 25% = 26.25% + 40% + 6.25% = 72.5%

The second option for calculating the final score of this technique is given in the Appendix.

It is worth repeating: naturally, such assessments are subject to subjectivity. If the amount of work can be determined, and the timing can be measured, then quality (in the absence of specialized measurements, for example, the number of customer complaints or the results of an assessment carried out using the mystery shopping technology) is assessed subjectively.

Key performance indicators (KPIs of employees) - what increases the objectivity of the methodology?

Firstly, evaluation criteria are formulated in a special way. This was not done by chance: after a month, the manager cannot always remember in detail which deadlines were violated and how many tasks the employee completed with proper quality. However, he developed a general, holistic picture of his subordinate’s work, written in “large strokes.” In the same “large strokes” he is asked to paint a “portrait of the employee’s effectiveness.”

Secondly, The objectivity of the technique is enhanced by the practice of its application. More than ten years of experience in using the methodology shows that efficiency is high when it is completed by both the manager and the employee himself. They then discuss their findings, and this has an important meaning:

the employee remembers his tasks better, but the manager may forget something or confuse something, because he has several subordinates;
the manager has his own view on quality issues, while the employee tends to forgive himself for minor “sins”;
A manager may often view missing deadlines as poor quality work, confusing the two, while an employee may take pride in doing quality work while neglecting the value of meeting deadlines or scope.

Third, Due to these effects, both sides strive to reach an agreement, which, as satirists formulated, is “the product of the non-resistance of the parties.” Since the main practical application of this method is the ability to regulate the monthly or quarterly premium (see Table 2), it is precisely this circumstance that makes the technique valuable, because agreement leads to fairness, and this is more important than the accuracy of measurements, and motivates more than mathematically accurate and sometimes impersonal calculation of points.

Fourthly, The objectivity of the methodology increases due to the “economy of scale” if it is applied in all departments of the company. This effect makes it possible to compare the result with objective data, and this is another powerful verification criterion and a source of correction of results. Thus, a senior manager, having received a complete picture of the company’s assessments (a set of assessments of the performance of managers employed in profit centers and assessments of the effectiveness of employees of the company’s cost centers), can compare it with financial and other objective key performance indicators of the employee (KPI of employees) of the organization’s effectiveness in in general. It may turn out that the overall assessment of all employees using the “Efficiency Triad” method will be overestimated compared to the objective key performance indicators (KPIs of employees) of the organization. Then the employer has the right, by his own authority, to introduce a correction when paying bonuses.

Table 2 shows that employee Danilin had a vacation in February, and in accordance with company policy, no bonus was awarded during this time. Shirokova has a tendency to increase efficiency. Other workers' performance has decreased.

Please note: fulfillment of even 50% of the plan can be rewarded, especially since simultaneously three key performance indicators (KPIs of employees) of the “triad” are difficult to achieve, and two out of three can be high at the expense of the resource of the third. In this regard, any number less than 50% is also a certain achievement.

Key performance indicators (KPIs of employees) - systematic application of the method

The method can be applied cascade (where higher-level employees evaluate lower-level ones), throughout the entire organization and regardless of whether employees have “objective key performance indicators (KPIs of employees)” or not. The cascade application of the method gives the assessment systematicity and additional objectivity, especially when it comes to awarding bonuses.

And if, moreover, the method is used for a long time, then it acquires a number of useful properties. Let's look at them.

A superior manager, evaluating a subordinate, at the same time evaluates the activities of his department: after all, the results of a manager’s work consist of both his personal efforts and the efforts of his subordinates. The advantage of this method is that the superior manager has the opportunity to compare data and draw conclusions about the effectiveness of the manager and his subordinates, the department as a whole, and even the management style.

Thus, the figure shows that the subordinates of the head of department 1 have different skills (the “mini-diagrams” clearly show this): an engineer works slowly, but efficiently, a specialist works quickly, but not efficiently enough. A senior manager evaluates the work of the boss, and therefore the entire department 1, as follows: the department solves a large volume of problems with average quality and with some violation of deadlines. And a general analysis of the work of the entire department shows that the manager has an additional volume of tasks - in addition to those solved by his subordinates, and this may indicate problems with delegation. In addition, the boss’s activities somehow “degrade” the quality of the engineer’s work and “slow down” the specialist’s work. As a result, the timing and quality of the department’s work are not above average. The manager of department head 1 should perhaps think about his effectiveness as a manager.

The head of department 2 works quickly, but produces fewer cases than his subordinate. The leading specialist slowly completes a large amount of work. This means that this boss takes on those tasks that can be solved quickly, and the quality of his work cannot be called low. Obviously, everything is in order here with delegation, quality of work and meeting deadlines, and therefore with responsibility.

Analysis of productivity dynamics over time. It can be seen whether the employee's performance increases during the probationary period or decreases over the years. The most clear picture is created by comparing the dynamics of performance assessments with other factors. Thus, in addition to the comparison of the level of efficiency with the vacation period shown in Table 2, one can see signs of advancing “burnout”, which are especially noticeable against the backdrop of constant motivation, a drop or increase in efficiency associated with a change in management, the impact of corporate news on the productivity of employees or departments, and etc.
Analysis of the work style of an individual employee: a comparison of different parameters of the “triad” will show areas of his effectiveness and ineffectiveness. For example, one always works quickly, but not efficiently enough, while the other solves only part of the problems quickly and efficiently. From this, recommendations for the use of workers are born: the first should be placed in an area where speed is needed, and in relation to the second, one should also understand his motivation and interests in solving specific problems.
Comparing the ratings of employees makes it possible to judge their usefulness for the organization, and comparing the ratings of heads of departments allows us to make a rating of departments and managers. So, based on the results of the year, you can calculate average or total annual assessments and determine who is more effective and who is less and due to what factors: who is the “fastest” worker, who is the most “thorough”, who also performs the most tasks. In this case, the content of work and the employee’s affiliation with one or another department do not play a role.

So, despite the obvious subjectivity of the “Efficiency Triad” method, its useful properties are obvious:

the method is applicable to all positions, regardless of whether they are managerial or executive;
employee performance ratings can be accumulated and compared;
by accumulating assessments, you can track the dynamics of the work of individual employees and even departments, monitor the onset of burnout, and draw conclusions about their strengths and weaknesses;
by comparing the assessments of subordinates with the assessments of the manager, one can draw conclusions about the management style and identify areas of inefficiency in departments;
due to the standard approach, the methodology is easily implemented in document management systems (Lotus Notes, MS Outlook, etc.) and ERP (based on Oracle, SAP, Microsoft, etc.), widely used in the corporate world;
the method can become an addition or a common format for existing systems for assessing the effectiveness and efficiency of MBO, key performance indicators (KPIs of employees), and bring their data to a unified presentation.

And most importantly, this is not just another “precise tool”, but a way to mediate the dialogue between a manager and a subordinate on the issue of remuneration. After all, nothing reduces an employee’s motivation more than a lack of recognition and understanding of development paths. In such a dialogue, the employee can understand why his boss is dissatisfied and what he pays attention to. In other words, the method gives motivation a very important management effect - feedback to the subordinate about his work.

should be calculated to diagnose corporate problems. Key performance indicators of an employee allow you to take timely measures to improve the efficiency of his work.

Author of the publication

The article describes how staff performance is assessed and explains important nuances.

Personnel performance assessments are needed to understand how well employees are performing and whether they are achieving their goals. A company employee may show up for work on time, comply with the requirements listed in the job description, but still fail to complete the task.

Let's look at an example. Petrova A.S. works as a sales manager at the Pechatny Dvor company. The girl arrives to work on time, regularly makes calls to the company's clients, is constantly looking for new clients, but sales are falling. The company does not receive the profit that it could have earned if the sales manager had worked more efficiently.

Therefore, an analysis of personnel effectiveness is required. You need to understand whether it makes sense to keep such a manager at the company and continue to pay wages.

So, assessing staff performance is a set of measures that will help you understand how effectively an employee performs his duties. The assessment can be carried out at any stage.

An employee can be assessed at an interview, during a probationary period, and throughout his or her employment.

analysis of personal qualities;
assessment of professional abilities;
Finding out whether the specialist is capable of working towards results.

Before promoting a working employee, it doesn't hurt to find out whether he's actually doing a good job.

Purposes of application

The work analysis is carried out in order to find out:

whether responsibilities are correctly distributed among employees;
whether employees achieve their goals;
Are production costs recouped?
what contribution does each employee make to the work of the company;
what costs are spent on each subordinate;
how to make staff work more efficiently;
how much profit each employee can bring to the company;
Is it worth investing in training and advanced training of specialists?

A competent check of the organization’s personnel will help the company work more efficiently. The director will know what his employees are capable of and whether it makes sense to keep or change the team.

Who is being assessed?

The indicators are different for all employees. You cannot evaluate the work of an administrator and a sales manager in the same way. Each employee is responsible for his own area, and the department head is responsible for the effectiveness of the unit.

Heads of departments

The work of an enterprise depends on whether the heads of departments can competently organize their work. A person who occupies a leading position in a company must have a good understanding of people. The manager also requires communication skills and the ability to communicate with different people.

The boss must know the specifics of production activities well, otherwise he will not be able to competently manage the staff. Without knowing the laws, you won't be able to run a business. If you break the law, the controlling structures will “torture” you with inspections and issue fines, so the manager must know its rules well.

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Money - analysis

Perhaps, methods for assessing the effectiveness of investment projects are the most interesting for a wide range of people in our time. An investor is interested in investing his funds in a profitable, promising business, subject to minimizing risks. Success is achieved only by those who are able to calculate in advance the amount of dividends and the duration of the period for making a profit. To obtain correct, accurate information, you need to use reliable methods for assessing the effectiveness of investment projects. Based on the result obtained from such an analysis, it is possible to make a management decision regarding the prospects for using money.

There are quite transparent projects for which analytics can be compiled in just a couple of minutes, but there are complex situations when obtaining the correct result turns into a long, labor-intensive process. Much in the methods for assessing the effectiveness of a project depends on the complexity of the object being studied. For simple situations, easy-to-use economic and technical calculation methods have been developed, and the cost of services for such an analysis when contacting third-party experts can be equal to the amount invested in the idea, so it is preferable to do it on your own. But when considering a large project, methods for assessing economic efficiency become an important aspect, since many needs seem to be overestimated, which affects the positive result. Many project authors request additional funds from investors to gain financial freedom, and it is a qualitative analysis that allows us to determine how justified the requirements are in a particular case.

Assessment: first decide, then do

Correct methods for assessing the efficiency of an enterprise allow you to understand whether it is worth investing in a project. The decision always falls entirely on the investor, so it is important to take into account as many parameters as possible. Investing involves clarification of certain indicators, including the additional amount of invested funds.

When analyzing a project, it is assumed that work will be stable for a certain period of time. For this period, methods for assessing the effectiveness of investments suggest calculating the amount of cash flows. Based on the information received, you can conclude how large the dividends will be and what profits to expect. By the end of the life cycle, methods for assessing the effectiveness of investments make it possible to clearly calculate project performance indicators. Analysts draw up a comparative analysis, taking into account the results of each stage of the calculations.

Before and after

Methods for assessing efficiency involve making calculations at the stage of deciding whether it is worth investing in the project of interest. In this case, the profitability is compared with bank deposit rates. Cooperation makes sense only if the indicator proposed by the financial structure is exceeded. If efficiency assessment methods show comparable parameters or an investment project provides a lower level of profitability, working with it is unreasonable and ineffective.

The investor’s task is to calculate how much the project depends on inflation, what percentage of profitability will be “eaten up” by it. If profitability shows indicators comparable to inflation, investing in this option is ineffective and unwise. If there are several project options, efficiency assessment methods are applied to all possible ones in order to compare and collect correct analytics. The estimated volume of invested funds, the duration of each project and performance indicators from an economic point of view are taken into account.

Result: how to evaluate?

Methods for assessing efficiency based on calculation results provide a set of interrelated indicators. The more complex the project, the more quantities need to be calculated. First of all, they analyze how much the investment can affect the social sphere, the environment, and the technology potential of the company in particular, and the country as a whole. Methods for assessing effectiveness involve calculating the commercial component, which reflects the impact on the financial position of the company, and the economic component, within which they calculate how strong the impact will be on the legal entity and the country as a whole. Finally, they calculate budget efficiency, within the framework of which they analyze what the impact will be when putting the plan into practice in relation to the state, region, and locality.

Some projects need to be assessed by considering their impact on the level of independence of the state. Certain investment ideas can help strengthen a nation's defense capabilities, making them more valuable than others.

What's most important?

For each individual investor, methods for assessing management efficiency are most relevant as a tool for providing information on the economic component of the project. With the correct calculation of indicators, it becomes clear how logical and justified the investment of money in the project of interest is. To make an intelligent decision, you need to have data on several interrelated indicators.

What to look for?

Modern methods for assessing efficiency provide two options for indicators that allow you to evaluate a project: dynamic, static. The first show how the effectiveness of the plan changes over time. It is taken into account that for calculations specific dates are selected, to which the parameters are given. Static ones provide information about the cut in relation to a given moment. In some cases, the calculation is made without taking into account the time factor at all.

Each group has its own methods for assessing effectiveness; they are divided into static and dynamic. The first involves calculating the payback period, which gives access to the duration of the time period during which the investment will be returned back to the owner. An equally relevant method involves calculating the efficiency coefficient as the ratio of what is received from a project to what is invested in it over the life of the company. Another important parameter is net income, calculated over the entire life of the investment. Expenses under the taxation program, supplies of raw materials, materials, and other costs are subtracted from the total amount.

We evaluate correctly

Using static indicators, you can use fairly simple calculations to evaluate the effectiveness of a particular project. The results obtained by using this technique are used as preliminary, but it is taken into account that the information is not always sufficient to assess the effectiveness of what is planned in reality. When comparing different investment projects, examining only static indicators, you need to remember that with equal values, risk parameters can differ greatly. There may also be differences in the project lifespan, which directly affects efficiency, but is not taken into account in the static calculation method.

Dynamics to help the investor

This category of indicators usually includes the net present value, which reflects the value of the income component for a given time period, as well as the profitability index, calculated as the ratio of the net present value and the initial investment in the idea.

Another important parameter is the internal profitability standard, which gives an idea of the maximum profitability expected from the project.

Calculate according to the rules

The dynamic methodology for assessing efficiency involves taking into account the time factor against the background of assessing the value of financial investments. The discount rate must be taken into account. Typically, this indicator is taken as the average deposit percentage across banking structures. Another important parameter used in the calculations is the weighted average price of capital investments.

Thanks to the use of a discount rate, it is possible to immediately abandon projects whose internal profitability standard does not reach the depositary offers of financial institutions.

Investment attractiveness

Assessing this parameter involves analyzing all objects from the point of view of the prospects for cooperation with the project. When assessing using this approach, it is necessary to take into account the specific characteristics of the enterprise. Analysts not only study the project itself, but the investment object as a whole, as well as the economic environment in which it operates.

A foreign investor is obliged to analyze how convenient government services and conditions for investment will be. The method involves assessing taxation, refinancing rates, and the ability to freely transfer dividends. A comprehensive analysis of these factors allows us to draw a conclusion about how attractive the state where the potential investment object is registered is. It is necessary to analyze whether all the resources required for daily activities are available, how heavy the tax burden is, and whether there is access to qualified labor resources.

Investment attractiveness of the company

This method of assessing the effectiveness of investment activities involves the simultaneous use of tools developed to assess the financial condition, activities, profitability, and possible dangers associated with the organization’s activity. An investor with a high level of qualifications can often formulate a correct conclusion based only on analytical information about the financial ratios of a legal entity’s activity. This is enough to evaluate property, stability of position, liquidity of cash reserves, as well as business activity and profitability.

Economic analysis usually involves the preparation of financial analytics, while at the same time collecting as much information as possible about the current state of the company. To do this, assess fixed assets and the level of deterioration and workload. Analysts inspect production areas to determine how well the processes are organized. Before investing in a project, a responsible investor also evaluates how effective the management structure within the company is. Profitability will come from investing your resources only in a company that is well-designed, structured, and within which there is a well-thought-out hierarchical ladder.

Risks and returns

The methodology for assessing these factors involves a comprehensive analysis of the activities of a legal entity. The study examines how great the investor’s risks are when collaborating with the project. An investment risk is considered to be the possible loss of a certain amount by an investor if he decides to invest in a project. Assessing hazards is a complex multi-step task in which a number of significant factors must be taken into account.

Assessing the dangers associated with investing is a stage before which you must first assess the attractiveness of the country as an investment destination, region, or industry of the enterprise. Only after receiving information that is sufficiently correct and applicable for further analysis can one work on possible dangers.

Why do I need this?

Modern methods for assessing the effectiveness of investment projects make it possible to analyze to what extent the risk of investing money in an enterprise is justified by the potential profitability associated with the object. At the same time, the risk premium is calculated. A responsible approach allows you to effectively implement the most profitable projects, knowing what you can get from them and which points cannot be neglected, which is important in the first place.

A qualitative performance assessment for a financial expert provides a correct, up-to-date list of investment objects, distributed by rank, where the highest is inherent in the most promising project. By choosing the direction of investing money using this logic, you can calculate further steps to increase capital.

Methods for assessing employee performance are developed taking into account the goals that the work performed will help achieve. Based on the evaluation criteria, remuneration is assigned, and a decision is made on promotion or the need to improve qualifications.

From the article you will learn:

What is the most effective system for assessing personnel performance?

Methods for assessing employee performance are used by HR managers for administrative, motivational, and informational purposes. The work carried out makes it possible to obtain the necessary information that will help further improve the management system and resolve a number of issues related to movement, training, and remuneration.

WITHsystems for assessing personnel performance, main goals:

assessment used for administrative purposes, allows you to make decisions about promotion, demotion, transfer to another position, dismissal or employee training. Based on the assessment obtained, a methodology for further actions is developed;
assessment for informational purposes allows you to obtain reliable information about a specialist. In order for the HR manager to make the right decision about the feasibility and effectiveness of further activities, it is necessary to initially assess the quality of the work performed by the employee;
motivational purpose of assessment aimed at developing a system of incentives and incentive payments. If an employee works with maximum efficiency, successfully copes with assigned tasks, and has the appropriate level of qualifications, further management decisions are aimed at increasing wages and making additional motivating payments.

Assessing the performance of the organization's personnel, main goals:

assess the potential capabilities of employees in order to promote them to higher positions;

reduce the risk of promotion of incompetent specialists;

increase the work motivation of the best employees;

organize a feedback system by discussing the quality of work performed;

develop effective methods and training programs.

The main assessment work is assigned to line managers and management service specialists. When using special methods, workers and independent experts from specialized centers are involved in assessment activities. At the same time, managers and employees of personnel management services remain the formal subjects of assessment, who are entrusted with the right to make management decisions.

Methods for assessing employee performance are based on determining indicators such as:

labor intensity;
quality;
quantity.

Assessment of the quality and efficiency of personnel work

The professionalism, diligence of employees, and the ability to use modern technologies and production process methods are taken into account. They study the level of potential capabilities for the purpose of rotation. An analysis is carried out of the effectiveness of not only work activity, but also business and personal qualities that influence the quality of the final result.

Methods and systems that help determine efficiency should be rationally developed taking into account the specifics of the organization’s activities. It is rational to use standard techniques only when adapting them to your company. All systems have their advantages and disadvantages, but an integrated approach to staff performance assessment will help you get reliable results.

Qualitative methods. When used, quantitative indicators are not taken into account.
Quantitative methods. All results are recorded in numbers that help to conduct a comparative analysis of the activities of employees performing the same job functions.
Combined. Quantity, quality, and other performance indicators are taken into account.

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