What Is a Performance Standard and How to Create One 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 performance standards, how to create them, and how to track progress effectively. 

Table of contents:

• The purpose of performance standards
• Types of performance standards
  • Teamwork and communication
  • Time management
  • Accountability
  • Technical standards
• 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 is the purpose of performance standards?

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

Why are performance standards important?

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

• Employees – Each employee will have clear expectations on how to grow their skillset and advance in their career. They’ll never have to wait for their annual performance review to gauge their own performance. 
• Leadership – Leadership can see how employees are progressing and adjust their management style accordingly to produce the best results.
• Human resources – Employee turnover costs companies considerably. Clear performance standards help HR make better hiring decisions and improve retention rates.

Types of performance standards

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

Teamwork and communication

Teamwork and communication standards evaluate employees’ ability to communicate and collaborate well. Depending on the employee’s job responsibilities, subtopics might include:

• Ability to write clear and concise emails
• Willingness to practice active listening 
• Commitment to diversity and inclusion 

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

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.

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 too. 

Technical standards

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

• Earning or remaining compliant with certifications
• Learning new programming languages
• Meeting GDPR compliance standards for devices
• Completing security training

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

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.

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

Finally, it’s helpful to strike a balance between 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 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 might also want to implement self-evaluations too. This way, you can see if each employee’s performance assessment aligns with their manager’s. 

Even with increased transparency, you will need to 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 to meet these standards?
• Do new employees tend to have questions or express confusion 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 standards 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, 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. 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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