Performance appraisal is a systematic and periodic process of evaluating an employee’s work performance against established job requirements. It involves a subjective analysis of the employee’s strengths, weaknesses, and potential for future development. Performance appraisals are also known as performance evaluations, performance reviews, development discussions, or employee appraisals.
Key Facts
- 360-Degree Appraisal: In this method, feedback on the employee’s performance is gathered from supervisors, co-workers, group members, and the employee themselves.
- Management by Objectives (MBO): This method involves setting clear goals and objectives in collaboration between managers and employees. Progress towards these goals is periodically discussed and evaluated.
- Behaviorally Anchored Rating Scale (BARS): This method measures an employee’s performance by comparing it with specific behavior examples. Each example has a rating to collect data.
- Critical Incidents Method: This method focuses on specific critical incidents, both positive and negative, that have occurred during the appraisal period. The supervisor takes these incidents into account when evaluating the employee’s performance.
- Rating Scales: This method uses a scale to rate different aspects of an employee’s performance, such as dependability, initiative, and attitude.
- 720-Degree Feedback: This method expands on the 360-degree appraisal by including feedback from external sources such as customers, investors, and suppliers.
It’s important to note that organizations may use multiple appraisal methods during the same review, depending on their specific needs and goals.
Types of Performance Appraisal Methods
There are various methods of performance appraisal, each with its own advantages and disadvantages. Some common methods include:
360-Degree Appraisal
In this method, feedback on the employee’s performance is gathered from supervisors, co-workers, group members, and the employee themselves. This provides a comprehensive view of the employee’s performance from multiple perspectives.
Management by Objectives (MBO)
This method involves setting clear goals and objectives in collaboration between managers and employees. Progress towards these goals is periodically discussed and evaluated. MBO helps align individual goals with organizational objectives and provides a clear framework for performance evaluation.
Behaviorally Anchored Rating Scale (BARS)
This method measures an employee’s performance by comparing it with specific behavior examples. Each example has a rating to collect data. BARS provides objective and consistent performance evaluation by focusing on specific behaviors rather than subjective judgments.
Critical Incidents Method
This method focuses on specific critical incidents, both positive and negative, that have occurred during the appraisal period. The supervisor takes these incidents into account when evaluating the employee’s performance. The critical incidents method helps identify specific areas for improvement and provides concrete examples of employee behavior.
Rating Scales
This method uses a scale to rate different aspects of an employee’s performance, such as dependability, initiative, and attitude. Rating scales are simple to administer and provide a structured approach to performance evaluation. However, they can be subjective and may not capture the full range of an employee’s performance.
720-Degree Feedback
This method expands on the 360-degree appraisal by including feedback from external sources such as customers, investors, and suppliers. This provides a more comprehensive view of the employee’s performance from both internal and external stakeholders.
It’s important to note that organizations may use multiple appraisal methods during the same review, depending on their specific needs and goals.
Conclusion
Performance appraisal is a crucial aspect of performance management that helps organizations assess employee performance, provide feedback, and identify areas for improvement. By choosing the right performance appraisal method and implementing it effectively, organizations can enhance employee performance and achieve their strategic objectives.
References
- What Is a Performance Appraisal? Types, Methods, Objectives & Benefits. (2024, February 1). Simplilearn. https://www.simplilearn.com/what-is-performance-appraisal-methods-process-article
- 6 Practical Performance Appraisal Methods for the Modern Workforce (With Examples). (2023, September 18). Kissflow. https://kissflow.com/hr/performance-management/employee-performance-appraisal-method/
- 6 performance appraisal types for HR leaders to consider. (2022, December 13). TechTarget. https://www.techtarget.com/searchhrsoftware/tip/Performance-appraisal-types-for-HR-leaders-to-consider
FAQs
What is the purpose of performance appraisal?
Performance appraisal is a systematic process of evaluating an employee’s work performance against established job requirements. It helps organizations assess employee performance, provide feedback, and identify areas for improvement.
What are the different types of performance appraisal methods?
There are various performance appraisal methods, including 360-degree appraisal, management by objectives (MBO), behaviorally anchored rating scale (BARS), critical incidents method, rating scales, and 720-degree feedback.
Which performance appraisal method is the best?
The best performance appraisal method depends on the specific needs and goals of the organization. Some methods may be more suitable for certain industries, job roles, or organizational cultures.
How often should performance appraisals be conducted?
The frequency of performance appraisals can vary depending on organizational practices, industry norms, and the preferences of managers and employees. In many companies, performance appraisals are conducted annually, semi-annually, or quarterly.
What are the benefits of performance appraisal?
Performance appraisals help organizations improve employee performance, make informed decisions about promotions and compensation, identify training and development needs, and enhance strategic decision-making.
What are the challenges of performance appraisal?
Some common challenges of performance appraisal include subjectivity and bias, overemphasis on recent events, time constraints, negative perception, lack of specificity, goal setting and measurement issues, inadequate training for managers, and resistance to change.
How can performance appraisal be improved?
Performance appraisal can be improved by using multiple appraisal methods, providing clear and specific feedback, focusing on employee development, involving employees in the appraisal process, and conducting appraisals regularly.
What are the legal considerations related to performance appraisal?
Performance appraisals should be conducted in a fair and unbiased manner, and they should comply with relevant labor laws and regulations. Organizations should ensure that performance appraisals are used for legitimate business purposes and not for discriminatory or retaliatory reasons.