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Everyone has a different method, the most common is the achievement of company goals and job specific goals over the course of the prior performance period (usually a year).

Also one has to factor in teamwork, ability to get the job done and the willingness to excel at the job/desire to do more than just their job. And they learn from the mistakes they have made or have seen others make.

Also personally I think a employee's ability to think outside the box, to offer solutions to company issues and a little bit of rebellion should be factored in.

Personally I rather have a employee that may not be a top notch performance but its well liked by team and has the "balls" to stand up and question the status quo, to question why things are done the way they are. But also be ready to give reasons and solutions to how they would do it better.

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Q: How do i Calculate employee performance?
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