What is employee performance and how can you influence it?

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The word ‘performance’ has a few meanings. It can refer to artistic displays put on by actors and musicians, or—more generally—how a person carries out an action. In the workplace, employee performance is defined by how well a staff member meets the responsibilities of their role and adheres to a company’s values and standards. 

A key challenge for managers and leaders is feeling confident they know whether employees are really performing well, or just putting on a convincing act. Slack’s State of Work 2023 report found that globally, workers spend around 30% of their day on ‘performative work’—work that gives the appearance of being busy, without genuinely contributing to strategic outcomes.

That’s why we’re sharing the fundamentals of why employee performance matters, what actually contributes to excellent performance, and how you can understand and address employee performance issues.  

Why it’s important to measure employee performance

Over the past decade, employee performance management has shifted from a once-yearly, ratings-based focus on whether someone deserves a raise—to a continuous improvement imperative, based on regular feedback, coaching and career development. 

There are three important reasons to gather data and input from your team as part of an improvement-focused monitoring approach:

1. Employee performance is not an end-of-year afterthought

If you want to ensure high-level business goals are being met and company values are being upheld, you need to understand execution (and barriers or issues with execution) at the employee and team-level—all year round. 

A study by Mercer found 70% of HR leaders think there’s vast room for improvement in linking performance management processes to better day-to-day talent management.

2. Employee performance is not one dimensional

Employee performance is tied to a holistic view of individual workers’ outputs, attitudes and behaviours. Efficiency, quality and effectiveness must be counterbalanced by an ability to communicate well, maintain wellbeing, interact with others respectfully, and behave ethically.

For instance:

• At face value an employee can seem highly efficient—but on closer inspection you might find they’re doing work that isn’t a priority and not meeting quality standards.
• A sales rep might be exceeding her targets, but maybe she’s working excessive hours, not engaging with her team, and is close to burnout or quitting. 

3. Employee performance requires rich data to understand

Measuring and evaluating performance requires a multitude of indicators and insights based on both qualitative and quantitative metrics. As a people manager or executive, you can’t rely solely on your impression of a person’s productivity or likability.

This is especially true in modern hybrid and remote workplaces, where visibility of team members can’t easily guide your perception of their performance. But even when everybody’s attending the office in person, digital workflows require digital workforce monitoring tools to get an accurate idea of employee performance. 

Factors that affect employee performance

Employees will have various intrinsic and extrinsic motivations for performing at a high level. Some people are innately conscientious while others are more driven by competition or striving for a bonus. 

Individual performance is also a product of the work environment and culture. You have the power to foster improved employee performance through company-wide policies and people management approaches. 

Some common ways companies motivate employee efforts include:

• Remuneration and benefits 
• Employee engagement strategies 
• Reward and Recognition programs
• Succession planning and internal mobility programs

You should also carefully design and support these work aspects to positively influence employee performance:

1. Goal-setting

Goals keep employees on track, which allows them to perform well. Ultimately, employees need clear direction from the top about the vision, mission and the steps required to achieve goals.

When setting individual goals, where things can go awry include:

• Making goals too easy, vague and low-level. While goals should be achievable, everyone should factor in some stretch goals that give them a challenge. 
• Not involving employees. Gallup research finds that when managers involve direct reports in goal setting, employees are 3.6X more likely to be engaged.
• Making goals too difficult and inflexible. This can pressure people to lose sight of the big picture, become overwhelmed or act dishonestly to avoid failure.

2. Physical environment

The literal comfort of employees as they hit the tools is important for performance—whether they’re in-office or working from home. Consider ergonomically-sound desk set-ups, which might include customisable chairs, sit-stand desks and specialised keyboards, to ensure people have the correct posture and can avoid physical strain while working. 

Also pay attention to facets of your office like lighting, greenery, artwork, noise, temperature, access to private spaces and break rooms if you’re serious about driving employee performance. 

3. Streamlined tools and processes 

Too many systems and steps to get work done is a common complaint among high performers. They want simplified workflows that allow them to have greater autonomy over when and how they complete tasks—provided they achieve the desired outcome. It helps to provide:

Consolidated information systems for 24/7 access to information, and productivity tools that support asynchronous work, so people experience fewer interruptions during their day.

Integrated apps that allow employees to use a wider range of required tools yet minimise the need to switch between multiple different platforms—which previous studies have shown can cause more than 50% of workday interruptions.

4. Managerial support and feedback 

Clear and constructive feedback, praise and support from leaders, delivered regularly, serves the dual purpose of lifting performance by:

• Encouraging underperforming employees to identify, take ownership and tackle problems, so they can improve and develop into high-performing employees.
• Reinforcing what high performers are doing right and how it contributes to the business, so they stay focused and feel engaged and valued.

It’s critical for people managers to overcome the discomfort or fear that feedback won’t be well-received. Research shows it’s helpful to simply take the perspective of the potential feedback-receiver—would they appreciate knowing you’re paying attention and want them to succeed?

5. Skills, training and learning culture

Offering training and cultivating a culture of learning improves performance because it instils new knowledge, skills and confidence in employees. Improved competence and knowledge-sharing drives employee performance. 

For instance, an employee who receives targeted training in software they’re required to use daily—which could be through an online course or even peer-to-peer learning—is more likely to use the software’s features efficiently and deliver more polished outputs. 

Keep in mind, there’s no one-size-fits-all solution when it comes to professional development: so having insights into individual employee performance is key to creating personalized training plans. 

The role of leadership in enhancing performance

Company leaders play a critical role in setting off a chain reaction that unleashes strong individual performance across the organization. In particular, leadership is essential for continuous feedback, as discussed above. 

Feedback from a leader can have more impact, because it makes  employees feel seen and appreciated. When leaders also ask for feedback it:

• Enhances their ability to meet their team’s needs and offer better guidance. 
• Opens the lines of communication, which improves psychological safety and trust.

Organizational culture is also largely shaped by leaders. Leadership behaviours and values often spread like a contagion throughout an organization—which can be positive and negative.

• On the positive side, inspiring leaders who model ethical and collaborative high performance can energise their teams to push themselves to achieve the company vision. This is evidenced by high levels of discretionary effort, optimism and teamwork. 
• On the negative side, toxic leaders who model arrogant, unaccountable and dishonest behaviours can breed those same behaviours in subordinates. This can result in increased mistrust, low commitment, more cutting corners and higher turnover. 

What happens when employees perform badly?

In a worst-case scenario, employees who don’t meet expectations in their role can get your company in serious hot water by ignoring legal and compliance obligations, or undertaking criminal and unethical activities. 

Average performance doesn’t seem like a huge risk, but it gradually erodes your company’s competitive edge. When employee performance is subpar, it has ripple effects across your business: 

• Individuals can lose confidence, become disengaged and quit.
• Teamwork can suffer due to poor collaboration, re-work and resentment. 
• Employees add less value, adding to the costs of talent management. 
• Company culture can wane, making you less attractive to new hires.
• Clients can become unsatisfied, make complaints or leave.
• Company growth, reputation and revenue can all decline.  

You need to reduce poor performance—but focus even more on raising everyone’s level by creating a high-performance workplace. 

A 2023 Gartner survey found only 29% of HR leaders were confident that their organizations’ current processes would effectively help employees achieve and sustain their best possible performance. 

Gartner argues that to optimize employee performance, employers need to provide ‘performance clues’ as guidance, such as:

• Providing strategic context about business decisions, while also enabling autonomy in relation to daily tasks. 
• Incorporating wellness into work approaches to help employees set a sustainable pace, as well as encouraging them to care for themselves.
• Showing employees when success is achieved in real-time and recognising high performance at salient moments, to reinforce and drive desirable progress.

How to identify and address employee performance issues?

It’s difficult to fully measure and influence employee performance, and having metrics isn’t enough on its own. 

But hard data about employee activity, what they’re spending time on, and how they’re getting work done is a great start. Especially when employees are active participants in managing their own time and projects via monitoring tools—such as Time Doctor’s employee-friendly interface. 

Time Doctor makes performance more transparent company-wide. That encourages individuals to improve their self-management, and gives people managers and company leaders tangible facts to base conversations about performance on or instigate organizational change.

For example, with Time Doctor’s in-depth workforce analytics and reporting features you can:

• See when people work, their daily patterns of work, and get tipped off when people are working unusual or excessive hours and could be at risk of burnout. 
• Get objective insights in real-time that help you offer immediately useful feedback, recognise high performers, and hold both individuals and those who manage them to account.
• Compare activity and productivity levels across various teams within your organization to spot performance constraints related to resourcing or management.  
• Identify which software and online apps actually contribute to high performance or are potentially time-wasters or not being utilised effectively. 

What’s more, Time Doctor has in-built features to help prevent possible ‘gaming’ of our app, such as mouse jigglers and idle windows. There’s no place for performative work when you create a stimulating work environment and have the right systems to measure and improve employee performance. 

Book a free demo with Time Doctor today and discover our powerful workforce analytics tools.