Measuring employee performance has become a significant factor in determining the overall growth and development of an organisation. Key Performance Indicators (KPI) provide a method of assessing the success of staff recruitment and the resulting growth and achievements towards an organisation’s goals.

Goal-setting provides a business with strategic direction and also motivates staff to perform to their optimum. Creating measurable key performance indicators for assessing staff, directly contributes to the success of a business.

With each staff member aware of the company’s goals and objectives, they should feel part of the overall success. From existing employees to new recruits, every performance is integral to achieving the common goal. Successful measurement of KPI provides a health-check for the business and a valuable HR tool for the benefit of both the employer and employee.

Since the HR department oversees staff recruitment, measuring the effectiveness of their screening and hiring processes through KPI can be grouped in the following main categories.

Within staff recruitment itself, KPI can be used to measure recruitment success including levels of staff satisfaction, costs for successful recruitment and the time taken for a position to get filled. It is here that an assessment of how well candidates match their job criteria can indicate the company’s HR performance standard.

Staff retention is an important component of measurable KPI, particularly when assessing the effectiveness of the organisation’s human resources department. Employee retention depends on a number of factors including HR function, employee benefits, compensation and overall development. Staff retention can be measured by calculating the percentage of new recruits over a specified time interval and the time spent by an employee in a specific position.

KPI also provide a measurement of employee performance, in terms of productivity, job satisfaction and growth rate. Common indicators include performance evaluation, training costs and the number of training hours. Measuring employee performance according to these key indicators ensures that an organisation can maintain high working standards through assessment and acknowledgement of the achievements of its entire staff, in relation to the company’s goals and criteria.

Every Key Performance Indicator needs to be set out so that it is uniformly measurable. KPI assessment can then ensure that both employees and the organisation understand what specific actions need to be taken in order to successfully accomplish set goals and objectives.