How to Measure and Improve Job Performance in the Credit Department

By Michael C. Dennis

Introduction: ?There's an old adage that goes, "Whatever does not get measured does not get done." While this may be a slight exaggeration, the importance of establishing workplace goals and measurements for improving job performance cannot be overstated. In this essay, we will delve into the significance of measuring job performance, offer a comprehensive approach, and provide examples to illustrate the concepts discussed.

The Significance of Measuring Job Performance:? ?Measuring job performance is a critical aspect of ensuring that tasks and responsibilities are carried out efficiently and effectively. In a professional context, particularly in the credit department, performance measurement plays a crucial role in maintaining accountability, driving improvement, and achieving organizational objectives.

Diversify Measurement Metrics: ?It's important not to rely solely on a single measure of job performance, such as Days Sales Outstanding (DSO) or Credit Efficiency Index (CEI). Instead, consider using a combination of traditional and non-traditional performance metrics to provide a holistic view of individual and departmental achievements. For example, in addition to financial metrics, you can assess customer satisfaction, error rates, and process efficiency.

Customize Performance Goals:? Tailor performance goals to the specific roles and responsibilities of each member of the credit department team. Ensure that these individual objectives contribute to the overall team's success. This approach ensures that no one avoids accountability for their deliverables and fosters a sense of ownership among team members.

Frequent and Open Performance Discussions: Shift the focus from annual performance reviews to regular, quarterly discussions about individual performance. More regular feedback allows for timely course correction and provides opportunities for professional development. These discussions should be a two-way street, where employees can share their perspectives and concerns.

Clarity in Evaluation Criteria: ?Clearly communicate how performance will be evaluated to all team members. When individuals understand the criteria by which they are assessed, it enhances transparency and minimizes misunderstandings. Everyone should have a clear picture of what is expected.

Empower with Tools: ?Provide employees with the necessary tools and resources to monitor and track their job performance against their goals. Access to technology, data, and training can significantly improve their ability to meet and exceed expectations.

Accountability and Corrective Action: When there is a performance shortfall, encourage employees to take initiative. Ask them to propose and develop a plan to address the issues. Regular progress reporting and documentation of corrective action metrics are essential to track improvements.

Departmental and Individual Goals: ?Balance the focus on both departmental and individual performance goals. Encourage cohesion and teamwork by aligning individual objectives with the broader departmental goals. A harmonious work environment fosters a culture of collaboration and mutual support.

High-Value Tasks: Recognize that not all tasks are of equal importance. Concentrate performance assessments on high-value tasks. For example, if an employee excels in routine tasks like typing and filing but falls short in critical tasks such as Excel proficiency, the latter should take precedence in performance evaluations.

Tracking Progress Regularly: To avoid the traditional annual performance review becoming a review of only the most recent months, document and assess performance consistently throughout the year. This ongoing evaluation ensures that employees are accountable for their performance at all times.

Clarity and Challenging Goals:? Research indicates that employees perform better when they have clear and challenging goals. People tend to gravitate towards objectives that are well-defined and motivating. Therefore, providing a sense of direction and setting challenging targets can drive better performance.

Conclusion: ?Measuring and improving job performance is a multifaceted process that combines clear goal-setting, regular evaluations, and a commitment to individual and collective growth. By diversifying metrics, customizing goals, fostering open discussions, and providing the right tools, organizations can enhance their performance management processes and achieve better results. Ultimately, a well-structured approach to measuring job performance benefits both employees and the organization as a whole.