Three ways to measure employee performance

Retail sales is just that, sales! Your employees aren’t paid to simply check people out or stock the shelves. Their job is to sell! Same for restaurant servers. So, it’s important to monitor their sales performance.

There’s a bit of controversy about measuring sales by employee. How to you fairly track part time vs. full time and compare with those who work prime shifts vs. off peak times? The point is to benchmark each employee and monitor performance on a regular basis, even if you’re only comparing against themselves.

There are 3 ways to do this effectively. Use the method that best works for your business.

Sales by employee
Average sale by employee
Sales by employee per hour

Start by tracking total sales per employee. Look for dips and peaks in performance and by month-to-month comparisons. But to really drill deep and have an effective comparison, track the following.

Average sale by employee
To calculate, simply divide the total sales for an employee by the total number of transactions. So, for example, if John sold $4000 in merchandise for the week with a total number of transactions of 150, his average sale would be $26.26. We’ll put this into context in a bit.

Sales by hour
Just divide the total number of sales by the total numbers of hours worked. Using $4000 per week in sales and divided by 40 hours, the sales per hour are $100.

So, let’s look at how this might help in a business. Let’s say there are 3 employees, A full time manager and 2-part timers and here are their weekly sales analysis.

Weekly                                 Manager              Part timer # 1     Part timer #2
Total Sales                          $4,000                   $2,500                   $1,000
Average sale                      $26.66                   $16.66                   $12.50
Avg. sales per hour          $100                       $125                       $66.66

Here’s what we learned from this analysis.
Part timer #1, who works 20 hours per week, had a higher average sale per hour than the manager, although at $16.66, his average sale was substantially lower than the manager’s $26.66. These figures tell us that part-timer #1 is most likely an attentive salesperson but not as good as the manager at upselling. With some training, we can help him increase his average sale.

It’s not unusual that a manager’s sales metrics is not as high as a good salesperson working prime shifts because often, managers are distracted by administrative or other management tasks.

Finally, let’s talk about Part timer # 2’s stats. She works on Saturday and Sunday, one peak and one-off peak day. Nonetheless her sales do not stack up to her colleague’s and she needs training to improve these numbers or be replaced.

No matter which benchmark you use the important thing to remember is to track and monitor so you can see if someone’s performance is improving, staying the same or declining. If there isn’t regular improvement, you’ll want to intervene with additional training or, if warranted, replacement.

Until next time remember,
You can do this!