Performance appraisals are systematic evaluations of an employee’s job performance and contribution to an organization. Several methods are used to conduct performance appraisals, each with its strengths and weaknesses.
Key Facts
- Performance Appraisals:
- Straight ranking appraisals: Employees are ranked from best to worst based on their performance.
- Grading: Employees are assigned grades or scores based on their performance in specific skills or areas.
- Management by objective appraisals: Employees and managers jointly set goals to be achieved within a specific time period.
- Trait-based appraisals: Assess characteristics that contribute to an individual’s personality, such as creativity or extroversion.
- Behaviour-based appraisals: Focus on the employee’s ability to carry out specific tasks and assess performance based on quantitative measures.
- 360-degree appraisals: Involve feedback from multiple sources, including colleagues, clients, and the employee themselves, to provide a well-rounded view of performance.
- Property Appraisals:
- Home appraisals: Determine the value of a property during the buying, selling, or refinancing process.
- Business appraisals: Assess the value of a business, often used for mergers, acquisitions, or determining the worth of a company.
- Collectible and antique appraisals: Evaluate the value of unique items for insurance, taxation, or selling purposes.
Straight Ranking Appraisals
Straight ranking appraisals compare employees to each other and rank them from best to worst. This method is simple and straightforward but can be subjective and overlook individual strengths.
Grading Appraisals
Grading appraisals assign grades or scores to employees based on their performance in specific skills or areas. This method is more objective than straight ranking but can still be subjective and may not capture the full range of an employee’s performance.
Management by Objective Appraisals
Management by objective (MBO) appraisals involve employees and managers jointly setting goals to be achieved within a specific time period. This method is considered fair and objective as it focuses on measurable outcomes.
Trait-Based Appraisals
Trait-based appraisals assess characteristics that contribute to an individual’s personality, such as creativity, extroversion, or dependability. This method can be useful for identifying strengths and weaknesses but can be subjective and may not accurately reflect job performance.
Behaviour-Based Appraisals
Behaviour-based appraisals focus on the employee’s ability to carry out specific tasks and assess performance based on quantitative measures. This method is considered objective and reliable as it focuses on observable behaviours.
360-Degree Appraisals
360-degree appraisals involve feedback from multiple sources, including colleagues, clients, and the employee themselves. This method provides a comprehensive view of an employee’s performance but can be time-consuming and expensive to implement.
Property Appraisals: Determining the Value of Assets
Appraisals are also used to determine the value of assets such as property, businesses, and collectibles.
Home Appraisals
Home appraisals are conducted to determine the value of a property during the buying, selling, or refinancing process. Appraisers consider factors such as the property’s condition, location, and recent sales of comparable properties.
Business Appraisals
Business appraisals assess the value of a business, often used for mergers, acquisitions, or determining the worth of a company. Appraisers consider factors such as the business’s financial performance, assets, and market conditions.
Collectible and Antique Appraisals
Collectible and antique appraisals evaluate the value of unique items for insurance, taxation, or selling purposes. Appraisers consider factors such as the item’s age, condition, rarity, and market demand.
Conclusion
Performance appraisals and property appraisals serve different purposes but share the common goal of evaluating the value of an asset. Performance appraisals assess an employee’s contribution to an organization, while property appraisals determine the value of a physical asset. Both types of appraisals use various methods to arrive at an accurate and fair valuation.
References
- Indeed Editorial Team. (2021, March 18). Define Performance Appraisal. Indeed Career Guide. https://www.indeed.com/career-advice/career-development/define-performance-appraisal
- Holborn, A. (2018, July 9). 6 types of appraisal system – and which one is best for your business? CitrusHR. https://citrushr.com/blog/performance/appraisal-types/
- Kenton, W. (2022, July 22). Appraisal: Definition, How It Works, and Types of Appraisals. Investopedia. https://www.investopedia.com/terms/a/appraisal.asp
FAQs
What are the main types of performance appraisals?
The main types of performance appraisals include straight ranking appraisals, grading appraisals, management by objective appraisals, trait-based appraisals, behaviour-based appraisals, and 360-degree appraisals.
What is the purpose of a property appraisal?
A property appraisal determines the value of an asset such as a home, business, or collectible for various purposes, including buying, selling, refinancing, insurance, or taxation.
What factors do appraisers consider when evaluating a home?
When evaluating a home, appraisers consider factors such as the property’s condition, age, location, square footage, number of bedrooms and bathrooms, recent renovations, and comparable sales in the area.
What is the difference between a performance appraisal and a property appraisal?
A performance appraisal evaluates an employee’s job performance and contribution to an organization, while a property appraisal determines the value of a physical asset such as a home, business, or collectible.
What is a straight ranking appraisal?
A straight ranking appraisal is a method of performance appraisal where employees are ranked from best to worst based on their overall performance.
What is a 360-degree appraisal?
A 360-degree appraisal is a method of performance appraisal where feedback is gathered from multiple sources, including the employee’s manager, peers, subordinates, and clients, to provide a comprehensive evaluation of the employee’s performance.
What is the purpose of a business appraisal?
A business appraisal determines the value of a business, often used for mergers, acquisitions, or determining the worth of a company for various purposes such as estate planning or securing loans.
What factors do appraisers consider when evaluating a business?
When evaluating a business, appraisers consider factors such as the business’s financial performance, assets, liabilities, market conditions, and industry trends.