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How an Employee Performance Evaluation Can Help You Measure Quality of Hire

The three most discussed recruitment metrics tend to be time to hire, cost per hire, and quality of hire—with the last being the most difficult to measure. Quality can be measured in many different ways, and can be quite subjective. However, it is arguably the most important thing to measure. It doesn’t really matter if you fill a role quickly and cost-effectively, if you don’t have a good hire to show for it. You can—and should—look at indicators of a quality hire early in your new employee’s lifecycle, including time to productivity. However, it’s also important to consider more long-term indicators that may be seen through employee performance evaluations.

Hiring manager satisfaction

Hiring manager satisfaction is certainly an area that can be highly subjective, which is why it’s important to base it off of the employee’s ability to meet key performance indicators (KPIs). During onboarding, the hiring manager and new employee should agree on what success in the role looks like. That way, success can be measured throughout the employee’s first year—and beyond. Doing so will ensure the employee performance evaluation won’t hold any surprises for the employee. It will simply be a recap of their ability to meet their KPIs throughout the previous year. With this approach, hiring managers can take a snapshot of their employee’s ability to meet or exceed their goals throughout the entire year. This ensures that hiring manager satisfaction is based on more than their recent memory.

Employee engagement and satisfaction

The employee performance review is also a good time to gauge each employee’s engagement and satisfaction levels. These, in turn, can be indicative of a high-quality hire. Engaged employees will generally go above and beyond to achieve their KPIs, and satisfied employees are more likely to stay at your organization long-term. Ask your employees if the role was what they expected, what they’d change about their role and the organization, and what they’d like their career path to look like at your organization. Utilize this information to determine how engaged and satisfied your employees are, then track how long they stay with your organization. High employee retention can be a sign of strong culture-fit, while high turnover can mean the opposite. High-quality hires will have stellar performance and stay at your organization long-term.

Employee leadership potential

In addition to asking employees what they’d like their career path to look like, their manager and other company leaders should determine each candidate’s leadership potential. Utilize each employee’s career goals to map out your organization's succession plan. This allows you to develop employees for leadership positions, so you have a talent pipeline with internal candidates ready to go once those roles open up. Employees who perform well and stay at your organization long enough to move into leadership roles would certainly be considered high quality. Track the percentage of your employees who are promoted to help determine your quality of hire with this method.

Conclusion

Quality of hire is a crucial metric, but it can be challenging to measure. The employee performance evaluation is a natural time to measure hiring manager satisfaction, employee engagement and satisfaction, and employee leadership potential. These are all strong indicators of a high quality hire. When you determine the highest quality hires in your organization, it’s worth taking the extra time analyze them and determine how you may be able to optimize your recruitment process. If, for instance, your highest quality hires come from employee referrals, you can make the case to invest more in a formal employee referral program. Or, if you know that your best hires all aced their work sample test, you can make sure you incorporate that stage into your interview process for all roles.

Further reading

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