If you are like most managers, you have at your disposal an incredible amount of data in the form of daily, weekly, quarterly, or annual reports detailing all sorts of performance information -- from employee attendance and hours worked, you might have customer complaints, sales data, and on and on. Of course you should use this information -- along with your own written performance tracking. But when you are using reports, you need to study those numbers inside out and make sure you know exactly how those numbers are really tied to the concrete actions within the control of each individual employee. You need to figure out what are those numbers really telling you about each individual employee's actual performance?

The example I always use is sales numbers. You see at first glance, sales numbers seem to be a clear and simple way of monitoring sales performance. But sometimes that's not the case. Let me show you. Take salesperson #1. Salesperson #1 is selling a product that has no market reputation, and, on top of that, she is working from a list of unqualified customers who are not likely buyers of the product. Meanwhile, salesperson #2 is selling a product with a great market reputation, and working from a qualified list of likely buyers. It's quite likely that the numbers for salesperson #2 will be significantly better than those of salesperson #1 -- but for reasons that are actually beyond the control of either salesperson. In this case, the sales numbers would not offer enough information to adequately measure the performance of these two employees.

In fact, measuring the actual performance of each salesperson in this example would require digging much deeper than looking at the numbers alone. How could you measure their performance? You could look first at the number of calls each salesperson attempted every day. At least that is an action within each salesperson's control. But that wouldn't tell you enough because it wouldn't tell you about the quality of the salesperson's work. To measure each salesperson's work quality, you need to evaluate how each salesperson handled each call. Is the salesperson listening carefully and not interrupting? Is she sticking to the script? Is she responding well to questions? Is she moving the conversation to a close? Those kinds of questions are often the ones that matter most when measuring sales performance. But sometimes the only fair and accurate way to evaluate an employee's performance is for a manager to exercise his or her own judgment. This is a perfect illustration of where numbers alone don't tell the whole story. Sometimes you need to use your judgment. You need to dig in to the details and use your judgment.

BONUS MANAGEMENT BEST PRACTICE
Do you currently have any employees who are so valuable that you would be willing to search for their "needle in a haystack" and help them earn a custom deal so that they are less likely to want to leave? In your next one-on-ones, make a point of talking with your best people to find out what they really want or need -- whether it's a special deal or a small accommodation. If you can fulfill a unique need or want, you will be doing something especially valuable for that person.