Crafting Effective Performance Standards: A Guide for Your Business

When it comes to growing a business, increasing your hiring velocity is only half the equation. You’ll also need to create a performance standard to set these new hires up for success. 

A performance standard is a set of guidelines outlining job responsibilities and overall expectations for each employee. These standards are typically part of the organization’s larger performance management strategy. 

In this guide, we will break down the purpose of establishing performance standards, how to create them, and how to track progress effectively. 

Table of contents:

• What are performance standards?
• The purpose of performance standards
• Types of performance standards
  • Teamwork and communication
  • Time management
  • Accountability
  • Technical
  • Professionalism
  • Problem-solving
  • Ethical Behavior
  • Excellence in service
• What to consider when setting performance standards
• How to set performance standards
• How to keep employees in the loop on performance indicators and metrics
• Adjustments of performance standards over time
• Final thoughts

What are performance standards?

Performance standards are the established criteria or benchmarks organizations use to evaluate their employees’ job performance. These standards serve as a reference point for assessing how well an employee is meeting their job responsibilities and achieving desired outcomes. 

Performance standards are typically derived from the organization’s objectives and the specific requirements of a job. They provide employees with a clear understanding of what is expected of them, including the quality and quantity of work, deadlines, and any other relevant performance indicators. 

Effectively defined performance standards play a crucial role in performance management, helping employees and managers align their efforts, set goals, and measure progress toward achieving the organization’s mission and objectives.

What is the purpose of performance standards?

The reason businesses create performance standards is to set expectations for new employees before they begin the onboarding process. This way, they can gauge success and know where they stand on a day-to-day basis.

Why are performance standards important?

Performance standards are essential because they keep every member of an organization up to date on employee expectations. With the correct performance measures in place, you’ll see benefits for:

• Employees: Each employee will have clear expectations on how to grow their skills and advance in their career. Once managers write performance standards, employees never have to wait for their annual performance review to gauge their own performance. 
• Leadership: Leadership can see how employees progress and adjust their management style to produce the best results.
• Human resources: Employee turnover costs companies considerably. Creating performance standards helps HR make better hiring decisions and improve retention rates.

Types of performance standards

Performance standards typically differ based on industry, job description, salary, and many other factors. That said, there are a few essential standards that work for all job descriptions:

Teamwork and communication

Teamwork and communication standards evaluate employees’ ability to communicate and collaborate well. 

Typically, these standards define the audience with which the employee will communicate. That could include fellow employees, clients, customers, or all of the above. 

Examples of teamwork and communication standards: 

• Writing skills: Ability to write clear and concise emails

• Listening skills: Willingness to practice active listening 
• Inclusivity: Commitment to diversity and inclusion 

Time management

Time management standards should outline expectations for time-sensitive work. You can set standards for prioritization, multi-tasking, scheduling, and other time management skills.   

No matter what they do for a living, setting these standards for each employee is crucial. Even the fluid deadlines of Agile project management require effective time management.

Examples of time management standards:

• Task prioritization: Prioritize tasks effectively, ensuring that urgent tasks are completed.
• Meeting deadlines: Consistently meet project deadlines and timelines.
• Minimizing distractions: Minimize distractions during work hours, such as non-work-related web browsing.
• Multitasking: Ability to effectively manage multiple tasks simultaneously.

Accountability

Accountability standards detail the people, projects, and organizations each employee is responsible for. 

While these standards create a direct line to those responsible for a mistake, employees should not fear them. Make it known that you’ll use them to praise employees for their successes. 

Examples of accountability standards

• Project ownership: Accountable for the successful completion of projects they are assigned to.
• Transparent reporting: Provide transparent and accurate reporting of their work progress 
• Acknowledging mistakes: Acknowledge and take responsibility for any errors or issues they may cause.
• Performance metrics: Performance metrics or Key Performance Indicators (KPIs) that employees are held accountable for achieving.

Technical

Finally, the employer may set standards around the technical aspects of an employee’s performance.

Technical standards should also include deadlines for addressing competencies, certifications, and compliance standards and include instructions on how to complete them. 

Examples of technical standards

• Continued education: Earning or remaining compliant with certifications
• Ability to learn: Learning new programming languages
• Compliance standards: Meeting GDPR compliance standards for devices
• Training: Completing security training

Professionalism

Professionalism is a crucial performance standard for employees across various industries. It evaluates an employee’s ability to maintain a high level of professional conduct, ethics, and behavior in the workplace. Some subtopics under professionalism may include:

Setting professional standards helps create a harmonious and respectful work environment.

Examples of professionalism standards: 

• Dress code: Meeting dress code requirements and maintaining a neat appearance.
• Punctuality: Being on time for work, meetings, and deadlines.
• Courtesy: Treating colleagues, clients, and customers with respect and politeness.
• Confidentiality: Safeguarding sensitive information and respecting privacy.
• Adherence to company policies: Complying with organizational rules and regulations.

Problem-solving

Problem-solving standards assess employees’ ability to identify, analyze, and resolve issues effectively. 

Problem-solving standards are essential in roles where employees must address complex challenges and make decisions that impact the organization’s success.

Examples of problem-solving standards: 

• Critical thinking: Using logic and reasoning to make informed decisions.
• Adaptability: Handling unexpected challenges and changes in work tasks.
• Creativity: Thinking outside the box to find innovative solutions.
• Data-driven decisions: Using relevant data and information to solve problems.

Ethical Behavior

Ethical behavior is a fundamental performance standard that evaluates an employee’s commitment to acting with integrity and honesty.

Setting ethical behavior standards reinforces the organization’s commitment to conducting business with the highest moral and ethical standards.

Examples of ethical behavior standards: 

• Avoidance of conflicts of interest: Preventing personal interests from interfering with job responsibilities.
• Honesty and transparency: Providing accurate and truthful information.
• Compliance with laws and regulations: Adhering to legal and ethical standards.
• Respect for diversity: Valuing and respecting differences in the workplace.

Excellence in service

Excellence in service standards is particularly relevant in customer-oriented roles. These standards assess an employee’s ability to deliver high-quality service to clients or customers.

Excellence in service standards is crucial for businesses looking to build a loyal customer base and maintain a positive reputation.

Examples of excellence in service standards: 

• Customer satisfaction: Ensuring customers are satisfied with products or services.
• Problem resolution: Effectively addressing customer concerns and issues.
• Product knowledge: Demonstrating in-depth knowledge of products or services offered.
• Quality assurance: Maintaining consistent service quality.

What to consider when setting performance standards

As explained on OPM.gov, a performance standard needs to be “objective, measurable, realistic, and stated clearly in writing.” This helps to reduce confusion and ensures that employees and employers remain on the same page.

When writing performance standards, it’s essential to set clear expectations, foster an environment where the employee demonstrates effective work habits, and provide room for creative solutions to drive excellence in service and ethical behavior.

It also helps when these guidelines are motivational, inspiring team members to reach higher productivity levels. 

Finally, it’s helpful to balance general measures and specificity. Create standards that are universal enough to work across the entire company. That said, you should also make slight adjustments that cater to the unique needs of each department or individual.

How to set performance standards

Setting performance standards is most successful when you follow a few distinct steps that ensure they will be objective, measurable, realistic, and clearly stated:

1. Review the current job description.
2. Discuss with the employee how their daily job duties do or do not align with the job description.
3. Review past performance goals and whether or not the employee has been able to achieve them.
4. Determine what values are most relevant to your organization and the employee.
5. Choose the distinct areas or parameters that would be considered successful in the employee’s job.
6. Find metrics that can reliably measure these parameters on an ongoing basis.
7. Create a rating system (usually between 1 and 5) to evaluate employee performance against the standards.

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How to keep employees in the loop on performance indicators and metrics

Employees can’t meet expectations if they don’t understand why and how you’re analyzing their performance. 

Plan recurring discussions for each employee and create documentation to evaluate their performance. You should also implement self-evaluations. This lets you see if each employee’s performance assessment aligns with their manager’s. 

Even with increased transparency, you must make some adjustments to perfect the performance standards process. 

Adjustments to performance standards 

Even the best, most thoughtfully developed standards will require adjustments over time. Ask yourself the following questions to determine whether these adjustments are necessary at any given point in time:

• Is it easy to measure?
• Are the expectations set for team members realistic?
• Does the average employee meet, exceed, or fail these standards?
• Do new employees tend to have questions or need clarification about the standards?

You can implement a trial period to ensure you make the correct adjustments.

Using a trial period to establish performance standards

Before using your criteria to make drastic staffing changes, consider setting up a trial period. During this period, employees are encouraged to provide honest feedback on the standard’s language, sustainability, and potential.

Collaborating with your employees increases the credibility of your standards. Since they contributed, employees will likely feel a greater sense of ownership.

Final thoughts

If executed correctly, solid performance standards can be beneficial for everyone involved. But if you don’t have the proper tools to measure success, your policy may fall flat. 

It’s critical to involve employees as you establish and change performance requirements, ensuring they know all relevant information. Effective communication and ensuring employees understand their expectations are vital to meeting the company’s goals and objectives.

With Hubstaff, you can see activity levels, optional screenshots, and website and app usage to help your team reach new heights.

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