Performance Appraisal Methods

Performance appraisal is an integral part of performance management. Usually, it is done once in a year. Apart form improving the employee performance upto its maximum potential, it has several other benefits. Like, it is a kind of feed back given to the employees by the employer, it gives the employees an opportunity to communicate with the employer. Also, the employee becomes aware of the roles, responsibilities and expectations of the employers through these performance appraisals. It helps the employers to recognize the competency levels of the employees. The employers come to know if there is requirement for any further employee training through performance appraisals. It is also useful in deciding on the allocation of rewards to the employees, according to their performance like salary hike or promotions. There are various types of performance appraisal methods that are used by different companies. To know more read on performance appraisals.

Performance Appraisal Based on Ranking
In this method, the performances of all the employees are compared with one another and not to any definite standard measurement. The performances are represented graphically where they are ranked in the range of best to worst as per their performances. Usually, maximum number of employees are found in the middle of the curve, as it represents employees with an average performance while the best and the worst performers are at the either ends of the curve. This method helps to choose the best performer among the best of the performances. This method is applicable only on those employees who are doing the same kind of job. The disadvantage of this method is that it can trigger off rivalry among its employees, which may adversely affect the working environment. Moreover, a negative performer is labeled as a loser in this method which may affect the motivation of the concerned employee.

Performance Appraisal Based on Rating
Here evaluation of the performance is based upon certain traits of the employees. Some of the key traits that are included for this purpose are employee motivation, attitude, flexibility, quality of work, quantity of work, cooperativeness, participation in team work and so on. Every employee is graded on each of these traits. Usually, it is done objectively by yes/no or satisfactory/unsatisfactory check boxes. The disadvantage of this method is that there is no specific definition for any given trait. Evaluation of a particular trait can vary from one person to the other. This may create confusion among the employees and give rise to tension between the employee and the employer.

Performance Appraisal Based on Behavior
Also known as behaviorally anchored rating scales. It is slightly different from any other job performance appraisal methods. As the name suggests, the performance is rated from best to worst according to the behavior pattern required for a given job. However, it does not take into account the trait and personality factors. All the dimensions of job behaviors that are relevant for a particular job has to be included in the scale and thus, a clear standard is developed. For this kind of analysis, thorough knowledge of the job behavior, required for a specific job is a must. However, this is a slightly complicated as well as time consuming process because for each type of job, a suitable scale has to be constructed.

Performance Appraisal Based on Objective
This method is called Management by Objectives (MBO). In this method, certain goals and objectives are set by the employer after discussing them with the employees. The performance of the employees are evaluated periodically after they submit their status report from time to time. When there is a specific set of goals, the employee feels motivated and puts in the best possible efforts to achieve the goals. This method often helps in obtaining higher levels of performances from the employees. The disadvantage of this process is that in a way, every employee starts to outperform the other which may result in an non cooperative atmosphere in the work place and in turn affecting the productivity.

There is one narrative based performance appraisal which is used along with other performance appraisal methods. For this, the HR manager as well as the employee give written statements on the performance of a particular employee. It can be done in two different ways. Either they can write whatever they wish to or there could be some given set of questions which needs to be answered by both. You can also refer to 360 degree feedback - multisource feedback.

One cannot say which type of the performance appraisal method is the best. One method that is suitable for a company may not be right for others. To a great extent, it depends on the system prevailing in the company. Sometimes, companies use more than one of these methods for better analysis of their employees.