If on the one hand, we have performance elements or key performance indicators, which let employees know what they need to do, on the other we have performance standards. Today we are going to see a definition of the performance standards and look at how can you develop them.
Performance Standards Definition
Performance standards refer to expectations, requirements, or thresholds approved by the management that let the employees know how they should perform at work. A successful standard needs to be set for each element and then included in the employee performance plan. These standards have certain characteristics:
- Meaningful, attainable, and reasonable;
- Observable and specific;
- Related to the position, not to the individual;
- Describes a satisfactory performance when the employee training is over;
- Described in terms of quality, quantity, outcomes, or cost.
Questions to Answer
Before starting to develop performance standards, it’s important to answer a couple of questions. Keep the following aspects in mind when planning to write down the standards:
- What safety considerations are there?
- What budget considerations are there?
- When do you need the results?
- What regulatory or legislative requirements are there?
- How long should a certain process take?
- What behaviors you want to exist in your department to promote leadership, teamwork, customer service, creativity, etc.?
- How accurate or how good is acceptable?
- What results would satisfy you?
- How is a good performance different than a poor one?
- What happens when the duty is performed correctly?
These aren’t the only factors to consider, but it’s a good start if you don’t know how to go about it.
Ways to Develop Performance Standards
Ideally, the manager who needs to develop the performance standards should work together with the employee. This happens because both parties need to understand what they are committing to. Moreover, when the employees have a say in the creation of their performance standards, they feel more responsible for reaching or exceeding them. Let’s have a look at a couple of ways in which you can develop these standards.
1. Review the Job Description
Together with the employee, you need to review the job description. Discuss together what kind of measurable goals should the employee set. Remember that the standard needs to be measurable if you want to have something that lets you compare the performance from year to year. Moreover, you can compare the performance achieved by other employees in the same position as well. Some examples of the measurable goals are:
- Inbound/outbound accounting activity (for accounts payable and receivable staff);
- Increase in revenue (for sales people);
- Accounting activity per unit (for manufacturing or production jobs), etc.
Of course, these can vary from company to company, but the examples above proved to be successful in some fields.
2. Look at the Historical Data
Before creating the performance goals, it’s important to have a look at the historical data available for the position. Analyze them thoroughly, and only then set the standards in place. A smart trick is to use monthly averages to see what numbers you should begin with.
3. Determine the Progress
Focus on a certain kind of progress you would want your employee to achieve. Then, place a number on it. For instance, you may be interested in hiring a salesperson that obtains a 10% increase in the revenue for the following year. Alternatively, you may want to have a production employee that raises their per unit number by 20% in the same period. It’s important to be very clear about the type of progress you want to see, and this depends on the specifics of your company as well.
4. Compare the Increase
Take the increase and apply it to the average numbers. Then, create a schedule for each month, setting the standards based on the historical data. It’s important to keep in mind that the numbers will probably be cyclical. This means that certain months will always be more productive than others. Consider the cycle when making up a performance standards criterion.
5. Implement the Performance Standards
Once you manage to implement the standards, you should also schedule a meeting at the beginning of each month. Have a meeting with the employee(s) and discuss them. Give them more advice on how to improve the performance. Moreover, it’s good to keep a record of each of the meetings. You will be using these records for the annual performance review. In this way, you can measure everything more accurately.
6. Change the Standards
Naturally, as the company grows and your employees evolve, the standards may need to change. If you notice that an employee is constantly exceeding the performance standards you imposed, consider the new numbers. Based on them, you should alter the guidelines for the following year. People call this ‘raising the bar’ when it comes to your company’s performance.
Performance Standards Example
To make everything clearer, we should look at an example of performance standards. Let’s take the library services associate position. The employee needs to make sure of the following:
- Overseeing the library department desk (ensuring coverage for all the times the library was open, responding to patrons’ questions and solving issues in a timely manner);
- Training student workers (ensuring that all the students received the proper training to work there in the first two weeks of the semester and following up on each of them);
- Reshelving books (reshelving them within 24 hours after their return, placing them in the proper location).
As you can see, these standards include both the list of what is there to be done and how to do it. It’s important to be as specific as you can about all the tasks if you want to achieve top performance, regardless of the field you’re working in.
Performance standards help managers assess their employees’ work and determination. They need to be set in place together with the employees for the best results. Moreover, managers need to consider historical data as well, to keep the standards within acceptable limits. If you notice that one employee constantly exceeds the expected performance, it’s time to up the expectations.
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