KPI-based performance appraisal is important for every employee. But have you ever thought about how it can help your company grow? Well, if you have, it’s fine. If you haven’t, it’s time to think.
There are a lot of factors behind a company’s growth, and KPI-based performance appraisal is one that needs to be addressed. A lot of companies are aware of how it helps their employees. But they are often unaware of how this process can help their company grow.
In particular, it allows you to objectively evaluate the quality of the work performed. It also helps you make strategic decisions and allow you to keep your staff informed and motivated and beyond.
Let’s talk about this in detail. But before that, let’s learn what KPI-based performance appraisal is. Hope it will help you articulate the topic as a whole.
What is KPI-Based Performance Appraisal?
KPI refers to the Key Performance Indicators. It is a measurable and quantifiable performance indicator that you can use to measure various aspects of your business. Moreover, it is used to measure business performance, customer satisfaction rates and the progress of a project.
When it comes to KPI-based performance appraisal, we take our employee’s performance into account and stretch it further to the business as a whole. But the question is, how is it measured?
Well, we identify some metrics based on the business objectives. And they are closely monitored during the appraisal process. The following are some of the metrics considered:
- The number of sales or products made by the employee for a given period of time
- Quality assured by the employee
- Profits made from an employee’s efforts
- Customer satisfaction rate achieved by the employee
- Overall office activities, including attendance, punctuality, team cooperation etc.
These are some of the most important metrics to measure KPI-based performance appraisal. Hope you understand what it is and how companies measure employee performance.
Now it is time to move on to how it helps your company grow.
How KPI-Based Performance Appraisal Helps Your Company Grow?
KPI-based performance appraisal has a lot of benefits for employees. But it benefits your business more than your employees. You might be thinking how. Don’t worry; we are going to make it clear to you now in this part of this blog.
There are many ways a performance appraisal can help your company, but we are going to talk about the most important points here. Let’s dig deep into it now.
Evaluate the Quality of Work
One of the main purposes of the KPI-based performance appraisal is to determine if your employees are delivering quality work or not.
You must already know that the quality of your employee’s work is very important. The collective effects of the work directly affect your company’s performance.
For example, a sales executive is responsible for making calls, visiting clients and onboarding them. What if that person is not able to onboard any clients despite having sales-qualified leads? What if you have many other employees alike? It is going to be bad for your company.
But if this is the case, how would you know about that?
Well, the KPI-based performance appraisal can help your company this way. You can have detailed knowledge about your employees and measure the overall quality of work.
Helps You in Decision Making
Making strategic decisions is very important for a company. But the decision-making is not that easy. It takes data and overall knowledge about your company. But the question is, how will you get that data?
Well, if you conduct a KPI-based performance appraisal, you will get all the data necessary to make a further decision.
For example, when you appraise your employees, you will know the ins and outs of their strengths and weaknesses. It will help you decide whether to keep one employee or not. It would also help you decide your next step.
Keep Your Employees Motivated
Employee motivation is one of the most important things for your company’s growth. And KPI-based performance appraisal is the best way to keep your employees motivated.
Well, when you conduct the appraisal, your employees will know that they are being monitored and will receive rewards depending on that. So, they are always motivated.
Besides, with the reward given depending on the KPI brings trust among your employees. In this process, technology solutions can even make things more pleasant for your employees and your HR team.
Therefore, KPI-based performance appraisal is crucial for your company’s overall growth. Hope this blog helps you understand the importance and benefits of KPI-based performance appraisals.
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