Performance Appraisal is a systematic\u00a0approach to evaluating the performance of employees to understand the capability of the employees’ and ascertain the training and development needs.<\/p>\n
Performance Appraisals helps in improving employer-employee relations in the workplace.\u00a0It initiates a continuous\u00a0flow of communication between employer and employees.<\/p>\n
In this article, we give an overview of 29 different methods of performance appraisal<\/strong>, where are they applicable, the advantages and disadvantages.<\/p>\n There is no best method since each one of them has advantages and disadvantages. Make sure you pick well for your organization based on its culture, and strategy.<\/p>\n Employees are assessed on key personality\/work traits such as Discipline, Reliability, Ownership etc by their Supervisors. The evaluation is based on a simple rating scale, ranging from Outstanding to Needs Improvement. Typically, all employees are evaluated on the same set of attributes.<\/span><\/p>\n \u201cDoes John reply to a customer complaint within time with the right tone and actionable response?\u201d<\/span><\/p>\n This type of performance appraisal is effective in teams\/departments where employees are required to do a similar set of tasks with high efficiency like a BPO or a Customer Support department. This is also an effective tool in organizations where employees are expected to align to a set of values or work traits. <\/span><\/p>\n It\u2019s a simple evaluation format and helps communicate to employees on what are the key attributes they need to possess to do well in their work. It also helps in putting forth a spirit of competitiveness amongst employees, as they strive to belong and deliver better results.<\/span><\/p>\n The evaluation is completely based on a qualitative assessment by the Supervisor and thus exposed to risks of all bias related to subjectivity, recency and personal relationships.<\/span><\/p>\n This type of performance appraisal assesses employee actions to evaluate key behavior. <\/span><\/p>\n Various rating scale options are available \u2013 (a) sliding rating (ranging from poor to excellent), (b) forced choice (With options like poor, average, good, etc), (c) forced choice with comments allowing for Supervisor descriptive inputs, and (d) behaviorally anchored where supervisors rate Pass or Fail on specific employee actions.<\/span><\/p>\n \u201cDoes John reply to a customer complaint within time with the right tone and actionable response?\u201d<\/span><\/p>\n This appraisal type is applicable where job descriptions are typically well defined and employees are required to deliver as per expected service levels. This may not be very effective where job responsibilities are dynamic and employees are expected to play multiple roles across functions and teams.<\/span><\/p>\n With descriptions of various behavior properly defined for a specific performance aspect, supervisors can be more accurate in terms of their assessment rather than in a completely subjective and generic rating system approach. Further, with the opportunity to add narratives, Supervisors are required to articulate the assessment and thus provides more clarity in the performance appraisal.<\/span><\/p>\n Research has shown that this rating system is not devoid of the disadvantages of the common appraisal types.<\/span><\/p>\n This type of performance appraisal is completely based on narratives, without any specific attributes to be assessed or objective rating scales. Questions are asked in an open-ended format and the Supervisor is required to respond as per his\/her subjective assessment. <\/span><\/p>\n \u201cHow is John as an employee?\u201d<\/span><\/p>\n This appraisal type can be applicable in organization setups that either do not or cannot have any appraisal process in place. In such organizations, this appraisal type can be introduced as a soft option. <\/span><\/p>\n It is the simplest to design and implement and can also be useful to evaluate the assessment capabilities of the Supervisor. <\/span><\/p>\n Since the assessment is completely subjective, the method may not be reliable as it\u2019s exposed to risks of all bias<\/a> related to subjectivity, recency and personal relationships.<\/span><\/p>\n This type of performance appraisal compares employees and ranks them from top to bottom. <\/span><\/p>\n \u201cRank employees on a resolution of customer complaints\u201d<\/span><\/p>\n This appraisal type can be applicable in departments\/functions where all employees are performing a specific task for which the key performance indicators are standard across the board. <\/span><\/p>\n It is a quick and simple method to find the best and worst performers in a team. <\/span><\/p>\n It is difficult to rank employees that are in the middle. This is again a subjective assessment type open to the risks of bias<\/a> of the Supervisor\/Manager.<\/span><\/p>\n This type of performance appraisal compares employees on a one on one basis on a specific trait. The number of times an employee is chosen better decides the final ranking. <\/span><\/p>\n \u201cBetween John and Jane, who is more reliable?\u201d<\/span><\/p>\n This appraisal type can be applicable in deciding on which employees to promote amongst a set of potential candidates.<\/span><\/p>\n It is a systematic approach to evaluation and helps rank employees uniformly. <\/span><\/p>\n If the number of employees to compare is high, then this method may become too exhausting for the assessor and thus evaluation may be prone to human errors.<\/span><\/p>\n This type of performance appraisal has specific grades defined with characteristics that need to be demonstrated for an employee to be allocated that grade. <\/span><\/p>\n \u201cGrade employees across Outstanding, Satisfactory and Needs Improvement wherein the employee may be graded Outstanding if he\/she has demonstrated the following characteristics \u2026.\u201d<\/span><\/p>\n This appraisal type can be applied in government\/semi-government organizations where performance is assessed based on a holistic perspective. <\/span><\/p>\n With clear definitions for each grade, the Supervisor is provided enough guidance to be able to grade an employee judiciously.<\/span><\/p>\n The evaluator may rate most employees high.<\/span><\/p>\n This type of performance appraisal has Yes\/No questions for appraisers with questions pertaining to the employee\u2019s work and behavior. \u00a0Each question has weightage based on the priority of the aspect being assessed. There are no rating scales to be used by the Supervisor. On completion of the assessment, the responses are collated by HR and an overall performance score is calculated for each employee. To ensure appraiser consistency, similar but worded differently questions are sometimes asked twice as part of the assessment.<\/span><\/p>\n \u201cIs John interested in his job role?\u201d<\/span><\/p>\n This appraisal type can be applicable in organizations that have a simple structure with few job roles and well defined job-competency maps. <\/span><\/p>\n It definitely eases the burden on the appraiser to rate or grade based on a scale. The appraiser can rather focus on the question and the related attribute to be evaluated for the employee. Thus, appraiser bias or human errors may be reduced.<\/span><\/p>\n If there are a large number of job roles in an organization, creating questionnaires specific to each role, defining the scoring rules, maintaining consistency in scoring to ensure comparable scores across job roles, etc become quite a tedious planning and operational overhead.<\/span><\/p>\n This type of performance appraisal was formulated by Peter Drucker. In this process, the first step is a collaborative Goal Setting<\/a> exercise between employee & Supervisor with clear definitions of responsibilities and expected results. There is a periodic review to track progress<\/a>, identify performance gaps, training needs, and course corrections. <\/span><\/p>\n \u201cHire 25 graduate engineers for the Production department by July 2018\u201d<\/span><\/p>\n This appraisal type can be applicable in organizations where employees perform varied job roles and require a collaborative approach with Supervisors to attain their work objectives. <\/span><\/p>\n If followed in the right spirit, MBO can be quite effective in employee engagement<\/a> as it helps the employees know what is expected of them and how their contribution leads to overall success for the organization. With the periodic review, the Manager also gets an opportunity to communicate regularly with the employee in a constructive setup that eliminates expectation mismatch and promotes organizational alignment.<\/span><\/p>\n There are several disadvantages \u2013 MBO can be quite time-consuming. Moreover, there is the possibility of conflict with Managers setting exceedingly high goals while employees aiming for lower targets. Also, if objectives are not measurable, then the process fails as progress review and assessment will be extremely subjective.<\/span><\/p>\n This type of performance appraisal assesses the employee\u2019s aptitude, emotional balance, analytical skills, and other psychological attributes. The appraisal is done in the form of detailed interviews, tests and supervisor discussions.<\/span><\/p>\n This appraisal type is best applicable to identify employees for fast track or future leaders for the Management Cadre.<\/span><\/p>\n These types of appraisal are useful to identify training & development needs of and suitable job roles for employees.<\/span><\/p>\n Since the approach is in-depth, the process can be time-consuming and costly in terms of organizational resources.<\/span><\/p>\n This type of performance appraisal involves inputs from seniors, colleagues, juniors and also, customers and partners. It is used to assess an employee\u2019s competencies, aptitude & behavior.<\/span><\/p>\n This appraisal type is best applicable to identify development & training needs for employees.<\/span><\/p>\n Since this type of appraisal collects inputs from all key work associates of an employee, the accuracy of the feedback is expectedly higher compared to other performance appraisal types.<\/span><\/p>\n The method is still a subjective assessment and open to the risks of bias<\/a> based on personal rapport, recency or competition.<\/span><\/p>\n This type of performance appraisal assesses an employee\u2019s performance by taking specific job-related behavior such as attendance, punctuality, discipline, readiness etc. into account. A numeric score is given for each of the criteria. If employees do not meet a minimum score, they are sent for training.<\/span><\/p>\n This type of appraisal is best suited for new employees\/freshers where the organization wants to find out the training needs for newcomers.<\/span><\/p>\n This method is quite easy to use and can be implemented in any type of organization irrespective of size, job function etc. It requires very less effort to set up and requires no formal training.<\/span><\/p>\n The rater can be biased with some of his favorite employees.<\/span><\/p>\n In this method, critical incidents that an employee was engaged with are listed, prioritized and then rated based on a checklist, indicating good or bad.<\/span><\/p>\n This type of appraisal is best suited where employees are subject to responding to critical emergencies and crisis, like a Hospital or Fire Department.<\/span><\/p>\n When things are normal, employees can be expected to operate quite similarly. But in a crisis or criticality, its how the employee responds to it and performs the expected duties is what determines the effectiveness of performance.<\/span><\/p>\n This method is completely subjective and thus open to the risks of bias<\/a> and prejudice. Also, it is extremely time taking as the evaluators have to write down the critical incidents regularly.<\/span><\/p>\n In this method, the expected results of a job are compared with actual performance. Typically, there will be an expected target to achieve or maintain and this will be benchmarked against the actual numbers.<\/span><\/p>\n This type of appraisal is useful in appraising measurable goals like say, No of Units sold, Volume of manufactured units etc.<\/span><\/p>\n With clear-cut expected job results and simple comparison with actual performance, there is very little left to the subjectivity of the evaluator\u2019s opinions.<\/span><\/p>\n Not all work that an employee does can be determined to have job results that can be quantitatively measured, like say, improve interdepartmental communication or employee happiness.<\/span><\/p>\n In this method, the rater describes the performance of an employee by writing a descriptive essay where he describes the strengths, weakness, capability etc. of an employee. <\/span><\/p>\n This type of appraisal is useful in appraising employees in the academic industry, where the research that a faculty does is being appraised by the evaluator.<\/span><\/p>\n This method is free from complex structures and formats hence easy to implement.<\/span><\/p>\n This method may be time-consuming since the rater has to write a description for each employee. It also lacks quantitative data and the length of the description may vary for each employee.<\/span><\/p>\n This type of performance appraisal is based on constant communication between employee and manager, right through the review period. In the end, the actual performance is tracked against the goals that were set, feedback is exchanged and goals for the next session are set.<\/span><\/p>\n This type of appraisal is best suited where employee and manager work in close coordination, the Manager is responsible for a smaller team and possibilities of One-on-One between employee and manager is quite high.<\/span><\/p>\n Since communication is at the basis of this appraisal, it results in very effective performance discussions between employee and manager right through the year without any chance for misunderstanding or expectations mismatch.<\/span><\/p>\n This may be overwhelming for the Manager if he\/she is responsible for a large team of people.<\/span><\/p>\n This type of performance appraisal assesses the technical performance aspects of an employee. <\/span><\/p>\n This is applicable to assess the performance of the technical department of an organization.<\/span><\/p>\n The rater can focus on a specific skill set, rather than open-ended performance parameters<\/span><\/p>\n This method is restrictive and cannot be applied uniformly across the organization.<\/span><\/p>\n In this method, the employees who are Managers are appraised of their managerial performance. This type of appraisal assesses job skills and well as people skills because the Manager not only is responsible for the overall work deliverables but also keep the employees motivated and happy.<\/span><\/p>\n A Manager Appraisal is most applicable in a knowledge-based services industries where employees and Managers need to engage collaboratively and thus need to feed on each other\u2019s feedback to improve and perform better.<\/span><\/p>\n Managers getting feedback from those who actually work with them on a day to day basis helps tremendously.<\/span><\/p>\n Reportees may not be completely honest in their feedback to the Managers for the fear of spoiling the relationship.<\/span><\/p>\n In this method, the employees are given the opportunity to scrutinize their own performance and assess their own strengths and weaknesses. In this way, they can find out their areas of improvement and make a list of their accomplishments over the year.<\/span><\/p>\n A Self Assessment<\/a> is typically applicable in any organization as the employee\u2019s voice must be heard as part of the evaluation process.<\/span><\/p>\n When employees are given the opportunity to self-evaluate they feel empowered. They realize that their opinions do matter and are taken into consideration during performance review discussions.<\/span><\/p>\n An employee may not be able to evaluate himself effectively. He\/she may overemphasize their contributions or downplay their success.<\/span><\/p>\n In this method, job evaluation is done at the end of each project. After the assigned task is completed, employees are evaluated based on the performance of the latest task.<\/span><\/p>\n This is relevant in project-based organizations where employees shift from one project to another and it makes sense to evaluate at the completion of the project, rather than at the end of the review period.<\/span><\/p>\n This method helps to instill a regular feedback culture<\/a> in the organization. Regular reviews<\/a> allow to identify and address any deviation in work and deal with it before it gets out of control.<\/span><\/p>\n Since there is no single Manager, feedback from one project manager does not always flow to the next project manager.<\/span><\/p>\n In this method, sales targets are compared with actual performance. Typically, there will be an expected set of goals to achieve or maintain and this will be benchmarked against the actual numbers.<\/span><\/p>\n This type of appraisal is useful in a sales-based organization where the main activity is selling.<\/span><\/p>\n With clear-cut goals set<\/a> and simple comparison with actual performance, there is very little left to the subjectivity of the evaluator\u2019s opinions.<\/span><\/p>\n Not all work that a Sales representative does can be linked to sales or financial performance.<\/span><\/p>\n In this method, the individual employee\u2019s performance is linked to the amount of revenue being generated, new deals won or average business size growth per customer.<\/span><\/p>\n This type of appraisal is employed in startups where the imperative is to deliver or die.<\/span><\/p>\n With a single point focus on financial performance, there is no room for misunderstanding between employee and management on what is expected. It helps to identify employees for promotion or exit.<\/span><\/p>\n It may not be conducive to creating a good work environment, where employees are always on the pressure to deliver results or lose their job.<\/span><\/p>\n In this method, an employee is expected to maintain a document trail of his achievements throughout the year. This document is used in annual reviews.<\/span><\/p>\n This type of appraisal is useful in appraising employees in the academic industry, where the research that employee does requires detailed journaling to be assessed by the evaluator.<\/span><\/p>\n Well documented accounts of employee performance are more useful than performance reports leading up to only a couple of months before the review. <\/span><\/p>\n This method is becoming outdated<\/a> since automated<\/a> feedback tools<\/a> are preferred over traditional documentation.<\/span><\/p>\nTrait-Focused Performance Appraisal<\/strong><\/h1>\n
What it is?<\/b><\/h6>\n
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Behavior-Focused Performance Appraisal<\/strong><\/h1>\n
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Unstructured Method<\/strong><\/h1>\n
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Straight Ranking<\/strong><\/h1>\n
What it is?<\/b><\/h6>\n
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Paired Comparison<\/strong><\/h1>\n
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Grading \u00a0Method<\/strong><\/h1>\n
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Checklist Method<\/strong><\/h1>\n
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Management By Objective<\/strong><\/h1>\n
What it is?<\/b><\/h6>\n
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Psychological Appraisals<\/strong><\/h1>\n
What it is?<\/b><\/h6>\n
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360-Degree Appraisal<\/strong><\/a><\/span><\/h1>\n
What it is?<\/b><\/h6>\n
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Numerical Rating Scale<\/strong><\/h1>\n
What is it?<\/b><\/h6>\n
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Critical Incidents<\/strong><\/h1>\n
What is it?<\/b><\/h6>\n
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Job Results<\/strong><\/h1>\n
What is it?<\/b><\/h6>\n
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Essay Method<\/strong><\/h1>\n
What is it?<\/b><\/h6>\n
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General Performance Appraisal<\/strong><\/h1>\n
What is it?<\/b><\/h6>\n
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Technological\/Administrative Performance Appraisal<\/strong><\/h1>\n
What is it?<\/b><\/h6>\n
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Manager Performance Appraisal<\/strong><\/h1>\n
What is it?<\/b><\/h6>\n
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Employee Self-Assessment<\/strong><\/h1>\n
What is it?<\/b><\/h6>\n
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Project Evaluation Review<\/strong><\/h1>\n
What is it?<\/b><\/h6>\n
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Sales Performance Appraisal<\/strong><\/h1>\n
What is it?<\/b><\/h6>\n
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Human Asset Accounting Method<\/strong><\/h1>\n
What is it?<\/b><\/h6>\n
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Journaling<\/strong><\/h1>\n
What is it?<\/b><\/h6>\n
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Field review technique<\/strong><\/h1>\n