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Company Profit & Employee Performance

When was the last time you compared company profits to individual performance metrics? While most companies compensation practises are impacted by company financial performance (i.e. 5% bonuses instead of 10% this year), many company's individual performance metrics maintain some version of the Bell Curve; 15% highest achievers, 80% achievers and 5% needs improvements.


Let's look at an example of how we can use the data from Quix to evaluate our company's alignment of profit and performance.



Between 2016 and 2018 both company (gray line) and employee performance (blue-manager rating and orange-self rating) were on the rise. This is obviously a good thing and what we'd hope to see. But in 2019, "something" happened and our company's profit went the wrong direction. Interestingly though, manager's rating of their employees in blue continued to rise, albeit at a slower rate than the employee's own self-rating.


In this example, our decreased profits had to do with a situation mostly out of the control of the company's employees. Managers and employees found themselves working extra hard to overcome this tough situation. Therefore, we see performance ratings increase by both managers and employees as they recognize the extra work and effort put in to try to recover from this unexpected challenge.


Each case and company is unique when we consider if profits should align to performance. There will be times when we should see a direct connection and other times not. What is important is that how Quix relies on frequent and ongoing ratings, this relationship can be demonstrated at all. HR can visualize this relationship for business leaders so they can react accordingly within their own organizations.


Going further into HR processes, what does a chart like this mean for our example company when merit increases and bonuses come around?


The company can still apply an objective approach to performance because the average performance rating may have increased, but increases will still be applied proportionately per the compensation philosophy of the organization. For example, the average merit increase can be applied to the average rating and then can be normally distributed in both directions. We have addressed using Quix to create true pay for performance before.


So when was the last time you analyzed the financial performance data of your organization, or business groups, by the performance ratings of your people? If you would like help making this a reality, Visit www.quixpm.com and request a demo.


Quix is a mobile-first application that allows employees and managers to quickly rate themselves and their direct reports up to twice per day. This allows companies to build a more nuanced, complete picture of employee performance over time, identifying high-performers, problem employees, potential management issues and even biases that would otherwise go unnoticed and unaddressed.