01/ 31/ 2007
by Charles R. McConnell
Performance standards are the next step logically following a job description. A job description says what must be done; the performance standards then specify how much must be done and how well it must be done. Standards are expectations of employee performance, and they are measures against which that performance can be evaluated.
Performance standards are output expectations expressed in terms of time, quality, quantity, and sometimes cost, or some combination thereof. They supplement and to some extent quantify the requirements of a job description, and they simplify performance evaluations by making them more objective and less judgmental.
In addition to their use in measuring employee performance and facilitating evaluations, performance standards also:
- provide guidance for orienting and training new employees;
- allow employees to assess their own performance;
- help identify training and development needs;
- support pay-for-performance systems; and
- can be helpful in successfully addressing certain charges of discrimination following discipline or dismissal based on performance.
Although under some circumstances performance standards can become fairly detailed and involved, in most instances they need not be so. Some businesses specify just two levels of performance: meets standard and fails to meet standard. Some use three levels of performance, for example: does not meet expectations (fails), meets expectations (passes) and exceeds expectations (excels). Other businesses use more detailed breakdowns of expectations; however, regardless of the number of performance levels specified, what is most important is that employee and manager both know the "standard" or "expectation" and that this target is reasonable, that is, neither too low nor too high.
Performance or task standards are based on outcomes and results. These are objective, using so-called hard data. Task standards can address:
- Productivity, as in completing assigned daily tasks or meeting an output expectation. Example for a billing clerk: processing 8 to 10 accounts per hour.
- Quality, as in achieving a favorable error rate. Example for a screw machine operator: achieving a scrap rate of no more than 2 percent of output.
- Timeliness, as in meeting deadlines. Example for an office manager: reconciling the day's receipts by no later than 4:30 p.m.
- Cost-effectiveness, as in meeting budgets or controlling expenditures. Example for a group supervisor: holding supply expenses to $(some specific dollar amount) or less for the month.
- Manner of performance, as in customer service. Example for a service representative: three or fewer customer complaints per week, all resolved satisfactorily.
An appropriate performance standard will exhibit all or most of the following characteristics:
- It identifies a level below which performance is not acceptable or above which performance is superior.
- It is reasonable. That is, it presents something of a challenge but is attainable by most workers.
- It is focused on results and is quantifiable (results can be counted) whenever possible; it is specific, objective, and measurable.
- It addresses only areas of performance over which the employee has complete control.
- Its expression avoids imprecise terms such as prompt, suitable, timely, adequate and the like, and instead uses quantifiable specifics.
- In some manner, either directly or indirectly, it benefits customers.
- Finally -- but of considerable importance for any performance standard -- it is understood and agreed upon by both employee and manager.
In addition to task standards, many companies use what are often referred to as compliance standards. These primarily involve adherence to certain policies and procedures, often relating to the likes of attendance and punctuality. For example, five (5) or fewer unscheduled absences per year might seem a reasonable standard for some.
Objectivity enters performance standards with the introduction of numbers or percentages to the task descriptions. Concerning telephone technique, for example, "Answer calls promptly" is imprecise and open to argument, while "Answer within three rings" is precise. Percentages can sometimes be associated with the required action to indicate the amount of tolerance or the number of errors expected. Pursuing the same telephone example, we might specify "Answer within three rings 90 percent of the time." In one way or another there is usually the opportunity to associate some measure of performance with the majority of tasks comprising most jobs.
The word "majority" in the preceding is important. There are relatively few jobs for which all of the necessary tasks are completely quantifiable; it is only the simplest, most repetitive jobs for which all dimensions of performance can be measured specifically. Some subjectivity will be necessary in assessing performance in most jobs, and there's nothing wrong with this as long as subjective judgments are fewer than objective measures.
The more job tasks the output of which can be counted or otherwise measured in some manner, the more accurately--and fairly--an individual's performance can be evaluated.
