As a manager, gauging employee value is a hard but necessary task. It allows you to decide who to let go when times get tough, and who to retain to ensure the company’s growth. Sometimes, the decisions are simple – based on the skills they bring to the company – and other times it is hard, due to the balance of costs versus skills. Here are four major factors to consider when measuring employee value. Initiative Does the employee exhibit initiative, or do they come to work everyday without motivation, merely going through the motions? Valuable employees will value the company, and work hard to find new, efficient ways to do things. They will demonstrate initiative by bringing new ideas to the table. Poor employees will go through the day-to-day grind doing the bare minimum and clocking out, offering few suggestions at meetings. Employees who show initiative are potential leaders, whereas employees who never show initiative are eternal followers. Potential leaders are far more valuable than mindless drones. Judgment Judgment is a difficult thing to gauge, as an exceptional employee may make a poor judgment by taking an oversized risk, while an average employee may make consistently safe decisions and never suffer as a result. It depends on your priorities as a leader. Maybe you need aggressive employees who aren’t afraid to take risks, but you may also need stable middle managers who can keep the ship on course without attempting to make a name for themselves with high risks. Valuable employees also exhibit strong decision making skills – they are able to quickly and effectively calculate the benefits and drawbacks of two decisions and act accordingly. These employees must also be able to make an unpopular short-term decision if it is better for the company in the long-term. Loyalty A valuable employee is one who takes his or her work personally; a poor employee is one who leaves it at the office. While it may be a bad idea to live to work, it is a hallmark of an effective employee. Poor employees will fail to think of ways to advance the company, and thus fail to show the initiative necessary to attain higher corporate ranks. The employee must also be loyal to your company; a disloyal employee moonlighting at a competitor, or one who is about to leave, can spread contagious negativity through your ranks, and is better to be terminated as soon as possible.Cost Efficiency A valuable employee is one who trades a valuable skill set for his or her pay scale. You may have one excellent employee on your team who is paid $100K annually, but you may be able to fill his or her shoes with three new employees with similar skill sets for $30K each. A team of three may be more cost effective, due to the flexibility of the combined parts. In addition, one overpaid employee may recognize his or her value to the company and demand higher pay, which would put you, as the leader, in a tight spot. Monitor your mature employees carefully to see which ones are the least cost effective, and the let them go. Hopefully, this well help you get started on weeding out your ineffective employees while maintaining your most valuable ones.