Let’s see 10 most Used Performance Appraisal Methods across Globe across industries.
Performance appraisals form an essential part of the HR department as they provide important and useful information for the assessment of employee’s skill, knowledge, ability and overall job performance. These appraisals are not only used to eliminate behavior and productivity issues, but also to motivate employees to contribute more.
1)360-degree appraisals: In this method the feedback of the employee is collected by the people who interact with him in the organization including his superiors, peers, subordinates, and also from customers. This could be several other colleagues, clients, customers etc and even the employee themselves is required to offer their view of their role in the team.360-degree appraisal is hailed as the best approach because it’s all-encompassing (the secret’s in the name!) and can give such a well-rounded view of an employee.The feedback is usually taken by a questionnaire designed for this purpose.
2)Management by Objective (MBO) : measures employees performance by the extend to which per-determined objective have been met. That is, they seek to measure employee performance by examining the extent to which predetermined work objectives have been met. Usually the objectives are established jointly by the supervisor and subordinate. Once an objective is agreed, the employee is usually expected to self-audit; that is, to identify the skills needed to achieve the objective.What makes MBO's efficient is the ability to set SMART Goals i.e. set goals that are Specific, Measurable, Actionable, Relevant and Time-bound
3)Essay Performance appraisal method: Essay Appraisal is a traditional form of Appraisal also known as “Free Form method.” It involves a description of the performance of an employee which needs to be based on facts and often includes examples to support the information. Under this method, the rater is asked to express the strengths and weaknesses of the employee’s behavior. The Essay evaluation method is a non-quantitative technique and highly subjective. While it provides a good deal of information about the employee, it takes a lot of time of the appraiser which is not always feasible.
4)Graphic Rating Scale: In this method traits or behaviors that are important for effective performance are listed out and each employee is rated against these traits. The rating helps employers to quantify the behaviors displayed by its employees. A graphic rating scale lists the traits each employee should have and rates workers on a numbered scale for each trait. The scores are meant to separate employees into tiers of performers, which can play a role in determining promotions and salary adjustments.However, the scale has disadvantages that make it difficult to use as an effective management tool. Even with intense training, some evaluators will be too strict. Some will be too lenient, and others may find it hard to screen out their personal agendas.
5)Checklist scale: A checklist of statement of employees traits in objective manner. Under this method, checklist of statements of traits of employee in the form of Yes or No based questions is prepared. If the rater believes strongly that the employee possesses a particular listed trait, he checks the item; otherwise, he leaves the item blank. Here the rater only does the reporting or checking and the HR department does the actual evaluation. Although it does not allow detailed analysis of the performance.
6)Critical instance method: In this method, the manager prepares lists of statements of very effective and ineffective behavior of an employee. These critical incidents or events represent the outstanding or poor behavior of employees on the job. The manager maintains logs on each employee, whereby he periodically records critical incidents of the workers behavior. At the end of the rating period, these recorded critical incidents are used in the evaluation of the workers’ performance. It provides an objective basis for conducting a thorough discussion of an employee’s performance. Although this method avoids recency bias, there is a tendency for managers to focus more on the negative incidents than otherwise.
7)Work standard approach: In this technique, management establishes the goals openly and sets targets against realistic output standards. These standards are incorporated into the organizational performance appraisal system. Thus each employee has a clear understanding of their duties and knows well what is expected of them. Performance appraisal and interview comments are related to these duties. This makes the appraisal process objective and more accurate. However, it is difficult to compare individual ratings because standards for work may differ from job to job and from employee to employee. It does not allow for reasonable deviations.
8)Ranking appraisal: Rank employees from highest to lowest or from best to worst. Here manager compares an employee to other similar employees, rather than to a standard measurement for the purpose of assessing their worth. The employees are ranked from the highest to the lowest or from the best to the worst. The problem here is that it does not tell that how much better or worse one is than another. Also it cannot be used for large number of employees.
9)BARS :The BARS method is designed to bring the benefits of both qualitative and quantitative data to the employee appraisal process. It compares an individual’s performance against specific examples of behavior & Performance that are anchored to numerical ratings. Although even this method has its limitations as it is often accused of being subject to unreliability and leniency error.
10)Competency anchored Rating scale model: compare an individual performance against specific example of competency thresholds in numerical ranking patterns. This method of performance appraisal is considered better than the traditional ones because it provides advantages like a more accurate gauge, clearer standards, better feedback, and consistency in evaluation.
