Why Performance Measurement Is The Most Important Of Employee Performance Appraisals?

Performance measurement
Performance measurement

The previous blog discussed eight key aspects to help you understand employee performance appraisals. Among them the first aspect is objective setting. This blog discussed why it is important in performance appraisals.

Let’s now explore the second aspect: performance measurement.

Performance measurement is a fundamental component of employee performance appraisals. It involves assessing and evaluating employees’ performance against predefined criteria, which can include key performance indicators (KPIs), job competencies, behavioral expectations, and organizational values.

Here are some key points to understand.

1. Key Performance Indicators (KPIs)

2. Job Competencies

3. Behavioral Expectations

 4. Self-Assessment

5. Documentation and Evidence

6. Rating Scales or Descriptive Assessments

7. Continuous Feedback

Key Performance Indicators (KPIs)

KPIs are quantifiable metrics that reflect an employee’s contribution to organizational goals. They can vary depending on the role and department. Examples of KPIs include sales revenue, customer satisfaction ratings, project completion time, or error rates. KPIs provide a quantitative measure of employee performance and can be used to compare performance across individuals or teams.

Job Competencies

Job competencies refer to the knowledge, skills, and abilities required to perform a job effectively. These competencies can be technical (e.g., programming skills), interpersonal (e.g., communication skills), or managerial (e.g., leadership skills). Performance appraisals assess employee competency levels and identify areas for improvement or further development.

Behavioral Expectations

Along with quantitative results, performance appraisals also evaluate employees’ behavior and adherence to organizational values and norms. This includes assessing factors such as teamwork, adaptability, integrity, and professionalism. Behavioral assessments provide insights into an employee’s interpersonal skills, work ethics, and overall fit within the organizational culture.


In some performance appraisal processes, employees can evaluate their own performance. Self-assessments allow employees to reflect on their achievements, strengths, and areas for improvement. It encourages self-awareness and opens up a dialogue between the employee and the manager during a performance review.

Documentation and Evidence

Performance measurement should be based on objective evidence and documented throughout the appraisal period. This evidence can include tangible outcomes, project deliverables, customer feedback, performance metrics, and any other relevant data. It is important to maintain accurate records to support evaluation and decision-making.

Rating Scales or Descriptive Assessments

Performance appraisals often involve rating scales or descriptive assessments to summarize an employee’s performance. Rating scales may range from numerical ratings (e.g., 1 to 5) to descriptive categories (e.g., exceeds expectations, meets expectations, needs improvement). Descriptive assessments provide qualitative feedback on employee performance, highlighting strengths and areas for development.

Continuous Feedback

Performance measurement should not be limited to formal appraisals alone. Regular feedback and ongoing performance discussions between managers and employees throughout the year are crucial. Continuous feedback helps employees stay on track, make timely improvements, and address issues or challenges promptly.


By measuring employee performance using relevant criteria, organizations can gain insights into their workforce’s strengths, weaknesses, and areas for improvement. This information is vital for making informed decisions regarding training and development initiatives, performance recognition, career advancement, and identifying high-potential employees.

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  • Ram

    Ram, the author of "Business Development: Perspectives" on Amazon Kindle, has a wealth of experience in business development across multiple industries. He has over 30 years of experience in commodities, FMCG, and software industries, and has held various leadership positions in these sectors. In the commodities and FMCG industries, Ram served as GM of Business Development for southern India, where he successfully established new businesses and expanded existing ones. In the software industry, he was Regional Director of Business Development for Asia, where he was responsible for expanding the company's presence in the region. Ram has a proven track record of turning around loss-making ventures and establishing successful businesses. Ram has also served as the Director of Industry Partnerships and IT Blog editor at a software company, showcasing his expertise in technology and industry partnerships.

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