What is the valuation of your startup… employees?

Ways to Gauge Employee Value Index

There is a direct correlation between a good team and a successful startup. Startup employees are often judged using various performance ratings. A positive rating for employees ensures the team is passionate and driven offering a higher ROI to the company.

Traditionally, performance rating was one of the core responsibilities of the manager. Managing teams and working with employees rightfully give managers a deep insight into employee behavior. So managers gave feedback which helped companies conclude whether an employee is an asset to the organization or not.

Managers and employee evolution: Apt or mis-hit?

Many new age startups have questioned the very nature of manager based performance ratings. This is because such ratings do not always correlate to company results. There have been cases where companies having employees ranking high on performance ratings had low profitability. While employees offered high ROI, the profit books suggested otherwise. As a result, startups are now adopting an innovative employee value index parameter. This is to evaluate the true ROI of an employee.  

Three Fundamental pillars of Employee Value Index

Employee Value Index is based on three core essential parameters to get the ROI of an employee. The index allows each employee to do a self check to ascertain whether he is on the right path and not limited to just the manager ratings.  

Current Performance

Current performance is a matrix which answers the basic question of how an employee is doing in the current role. Based on their assigned roles, self feedback and managerial feedback together make up for the current performance ratings as part of the employee value index.

Future Potential

Future potential matrix evaluates each employee based on their future potential. This helps companies to assign them to the most suited roles in the future. Based on how employees tackle difficult situations and challenges or keep the motivation of the team high, a future potential matrix works two ways. Firstly, it allows the employee to gauge whether he is ready for the next big role and secondly it allows the startup to place each employee in the right role.

Emotional Expense

They are a  matrix is a unique concept which makes employee value index more streamlined and refined. It basically determines if the employee’s performance and potential both add up to give a positive outlook for the business. For example, employees who blame the circumstances when faced with a challenging situation or take more time in adjusting to a new change or a novel concept rank lower in the emotional expense matrix compared to their peers who are more flexible, adoptive and receptive to new ideas.

Calculating overall Employee Value Index

To assimilate the final employee value index of any employee the sum total of current and future performances along with thrice the employee value index is mandated. Emotional expense is given a highest parameter as it is the one big factor in determining whether an employee will be a good long-term asset or otherwise. For example, a judgmental employee who is always judging co-workers in the team will end up with a poor emotional expense. This would happen despite very high ratings for both current performance roles and a good future potential. As a result, the employee does not necessarily become an asset offering low ROI to the company.

Ways in which you could gauge your own employee value index

Ask yourself the question on how you were doing currently and you find yourself ready for the future role in the offering? A true introspection will give you deep insight into how your company is likely to see you in terms of ROI. To ascertain the emotional expense, seek answers to how worthy you find yourself in your job and current role. This self-assessment could ensure you are high on performance matrix for your company with a high level of job satisfaction.

How do you gauge your own employee value index? Do share your views.

 

 

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