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Set Performance Standards

Home > Money With Melanie > Human Resources

17 / Mar / 2008

To be able to do your job well everyone needs to know clearly what is expected of you. This comes from having a performance plan.
The whole process is a simple three-step plan which should be worked out together between manager and staff member.

  • STEP 1. Set the overall goal.
  • STEP 2. Determine key result areas (KRAs).
  • STEP 3. Identify performance standards.

There are five to eight key result areas in everyone’s performance plan, and for each of these there needs to be clear and identifiable performance standards. These are agreed upon by manager and staff member so both can objectively assess performance.

Accuracy, for example, might be about setting a standard of zero errors. For someone new this might be unrealistic, so the standard may be no more than two errors per week in the first month. It could relate to the amount of time people are kept waiting, on hold, or the duration of a call.

The performance standard is the level of performance that defines what is acceptable and what is not acceptable. For example take sales per week. The lowest would be zero sales. The highest might be 100 units per week. Now let’s say the performance standard is 40 units per week. Higher than that, and the salesperson is doing well. Lower than that and the salesperson’s performance is not acceptable.

Of course, the performance standard may be set at different levels at say, 20 or 30, or even 70 or 80, and the standard may change over time. As long as everyone knows the standard, then expectations about performance are clear.

Another standard might be about time taken – to deliver, follow up, complete tasks etc. Then if things are later than the due date, the person is performing below the performance standard, but if they deliver ahead of time they are exceeding the standard.

Expectations need to be clear and thus set an objective basis for review.

To get a fair standard it needs to be discussed together and will need to take into account how new the task is, market conditions or other factors.

Standards should match job as it is now – they can be altered and changed over time.

The standards they are setting match the current person in the current job. When someone is new the standard should be set accordingly and then changed when they get up to speed.

  • Set a number of standards for each KRA
    Identify a number of performance standards that as a set will define acceptable performance. For example accuracy i.e. number of errors and timeline together.
  • Focus on results not just activities
    Performance standards should also focus on results achieved. For example the feedback from an internal client or team member that the job is done correctly and they are satisfied.
  • Set quantitative and qualitative standards
    Quantitative standards relate to things that can be counted – amounts, errors, time, cost, percentage of visits, number of complaints, output etc.

Qualitative standards – which relate to how well something has been done. Not everything can be counted! For example how well someone deals with a customer, the quality of the service provided.

One approach to setting a qualitative standard in customer service is to have an agreed seven-step strategy for handling complaints. So in this way the qualitative standard is about describing the required behaviour or possibly the steps in a procedure.

Identifying specific performance standards is the core of the performance planning process. It is where you get really clear about what is expected in the job. It will move the whole process away from being vague, unfair, and staff will in turn have more respect for their performance appraisal.

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