Have you set Performance Standards for your employees?

Employee Performance Standards

The number one reason for unsatisfactory employee performance is not setting clear job expectations. It is therefore essential that every employee should know very clearly what is expected from him or her. The responsibility of setting expectations lies with the business owner or immediate superior.

All new hires need to get clarity in terms of position’s roles and responsibility. A well defined job description plays a vital role in this process however a mere job description is not enough. A well set performance standard is the key here. Performance standard is the set benchmark explaining how one can bring the value addition while performing their duties. In management language, it is the topping on your Standard Operating Procedure (SOP).

I assume that you are familiar with the interaction when placing an order at any international fast food chain such as McDonalds or Dominos. “Would you be interested in extra cheese toppings? How about our combo offer? Would you like to try our new dessert?” You might be wondering why they ask these questions every time you place an order. The reason is simple. They have been trained to ask these questions in addition to fulfilling their basic duties as servers and cashiers. These questions are part of their performance standard to increase the size of each transaction and to increase the profitability.

Here are some examples of performance standards that amount to an excellent job performance by a shop floor employee in a retail business.

  • Greeting each customer within 15 seconds once he or she enters into the shop
  • Explaining the benefits to customer or rather than concentrating the product attributes.
  • Showing add-on products once the original purchase is completed.
  • Thanking customers once their transaction is over and requesting them to leave contact numbers for future schemes or new product arrivals.

For all the businesses in which After Sales Service or Annual maintenance Contracts (AMC) contributes major revenue, the following performance standards can be introduced

  • Once customer problem is solved, update your customer about new relevant products & services.
  • Update about current products obsolesces or spare parts availability
  • Asking for referrals of friends, relatives and associates who are in need of quality services.
  • Systemic follow up of referrals given by existing customers.

These are just some of the examples that come to my mind. But, I hope you get the point.

Setting performance standards will not only enable to get untapped sales opportunities via cross-selling, but also give your employees clarity about their job expectations. This will go a long way in increasing their job satisfaction and help you in-turn deliver an exceptional service to you customers.

So then, what performance standards do you have in mind for your employees?

Please let me know your thoughts by commenting below.


  • One of the important thing is to get feedback from customer.This is applicable to every area.e.g. machine shop can take feedback from assembly customer., Assembly can take feedback from final inspection, Dealer can take feedback from actual end costomer. This really gives improvement triggers by understanding customer needs.
    Ultimatly all business is dependent on how our customer is satisfied.As a measure of performance (MOP), customer satisfaction score (CSS) can acts as a very good performance parameter to monitor.

    Dilip ChuriSeptember 25, 2013
  • I agree that bringing clarity is a big performance enhancer for employees in addition to financial benefits.

    I would like to know more about building a foundation for setting performance Standards and then how to effectively set Performance Standards, all in context of a family owned business. I appreciate the simple language and examples that all can relate to.

    Aakash KulkarniSeptember 26, 2013
  • While most managers (both functional managers and HR Managers) would say that Performance standards & formal Performance appraisals should be the basis of rewarding employees, very few know how to go about or very few want to implement such procedures. Why?

    In an organisation where end result is considered important, rather than the means, how does one bring in the concept of Performance Standards and Performance Appraisals, without affecting end results over a short term and bring about organisational improvement over long term, without disrupting the tempo of the Organisation. What time frame should one expect to achieve measurable results in an organisation with about a thousand employees, with some 200 as staff rest workers.


    Avinash SatheOctober 18, 2013

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