Average (Performance + Productivity + Job Fit + Values Fit) = Quality of Hire
Businesses score candidates for hiring decisions. This is a metric. Every business defines the quality of hire differently because each company has its own unique ways of measuring performance. Identifying your company's list of most valued characteristics in a new hire is the first step. For example, many organizations score employees based on productivity, engagement, and adherence to company values. You might want to look at characteristics such as performance, productivity, job fit, and value fit. Whatever your list is, it's recommended that you don't use any more than five metrics in your calculation.
The goal is to make this measurement repeatable and objective.
For each of your chosen factors, implement a rating system that ranges from one to five. If you do not feel confident, consider running a manager or peer survey in which you ask about factors like performance and values fit. Some potential survey questions you could ask are
"This person has reached or exceeded the level of productivity expected after his long on the job."
"How would you rate the overall fit between your new hire's competencies and the job requirements?"
"How would you rate your new hire's fit with our company values overall?"
"If you were to interview this person again, would you hire them again?"
Once you have numbers, average the score to come up with one definitive quality of hire metric. The recommendation is to measure this between 30 and 90 days from the new hire's start date. You can use this data for recruiting processes, internal learning and development programs. It will give you a pointer on any specific skills or competencies.
This is not about just measuring once. It's about spotting the trends over time. Also, be sure to involve team members from every facet of HR because it will empower the broader team to spot problem areas.