In reality, selecting performance criteria comes down to one thing, determining how you will know if a job is being done well, identifying the elements that you are looking for from a job role and describing these elements specifically.
A team leader might have a performance standard "holds their people accountable for delivering results". Great, however it is not specific and is difficult to measure.
To clarify you may add some guidelines or clarifications such as
A numeric target, such as “serving 6 customers per hour”, sounds good. However, if the employee does not control the rate of customer arrivals then the measure is not within the employee’s control, as there may be times when there are less than 6 customers per hour.
It can be a challenge to evaluate part time customer service employees who only work a few hours per day and tend to work off peak service times, as these employees cannot be compared to employees who work peak times for customer traffic.
For a Sales Person: Meeting sale targets, may seem logical, however do you require a sales person to meet their annual sales target or all 12 monthly targets?
When setting performance standards you will need to consider the following points, performance standards
Must reflect the performance of the individual, not the team or the business
Should be an absolute measure of performance not indicative of probable performance
Should be within the employee control to influence their performance
Should be free from measurement contamination. The measured result should be accurate
Motivating people is a challenge, one that is help by developing performance standards that are motivational. You can ensure that your performance standards are motivation by avoiding these common killers of motivation.
If the targets are too soft your people will have no need to stretch, you will quickly find that no one is motivated to achieve soft targets.
If your people do not believe that they can achieve their goals, they will not be motivated to try.
All to often measurement systems are too complicated and not understood by the employees that they are designed to measure. If your people do not understand how they are being measured you will not be able to motivate them to achieve the required level of performance.
Sometimes managers do not adequately communicate the performance measures to their people. Whilst they may communicate the performance standards once at the beginning of the year, they often do not revisit the measures and current results throughout out the year. Reinforcement is required to ensure your people understand their measures, and how they improve their results.
One way to determine a reasonable minimum expectation is to have no target. Instead calculate the average output for the team (only counting outputs that meet or exceed quality expectations) and make the average the new minimum for the next 12 months.
Then during the year you can measure individual performance and, instead of giving feedback how they are going to target, you can give them feedback on how they are going against the rest of the team, i.e. each employee is either high, middle or below average performer.
If any person in your team improves their performance then the average will also increase slightly.
When setting performance standards it is best if you are consultative with your people, listen to what they have to say and listen to their concerns.
Once you have worked with your people to develop the performance standards you should trial them for a few weeks, maybe six or eight weeks. During this trial period give your people feedback on their performance – according to the system you developed together.
Then, listen to your people again; see if they have any issues or if there is anything they don’t think is fair about the new performance standards. Assess their concerns and make changes where it makes sense to make the change.
You will get higher productivity if you let you people have some influence over the way that they are measured and what they are required to achieve than if you insist on developing the standards in isolation and trying to force compliance.
Off course this is not always possible, you will find that there are areas where you cannot accurately measure the individual’s performance. Here are a couple of common examples