Employee Performance Appraisal Methods
The employee performance appraisal is a systematic process for an organization to evaluate and improve employee productivity and to boost their output. Usually these appraisals are carried out on an annual basis where an employee’s performance is evaluated against a set target. Further it is used to analyze the Strength and Weaknesses of an employee and also to measure how well the employee has performed on the job.
Performance appraisal assists an organization to determine the below facts:
- It provides information to make decisions in terms of Salary Increment, Promotions, tangible and intangible benefits
- It assists to compare and contrast the performance of subordinates and implement changes and strategies where required.
- Being able to know about the employee’s skill and knowledge from his/her immediate supervisor.
- To prevent grievance and provide transparency
among subordinates.
Several authors have interpreted the Categories of Performance Appraisal over a period of time:
|
Authors |
Categories |
|
DeCenzo
and Robbins |
Absolute
Method Relative
Method Objective
Method |
|
Aswathappa |
Past-oriented Future-oriented |
|
Michea
R Carrell et. Al |
Rating
Scales Comparative
Methods Critical
Incidents 6ssay MBO
Combination
Methods |
|
Strauss
and Sayles |
Traditional
Methods Modern
Methods |
Table: 1
Let’s discuss about the 3 Modern Performance Appraisal Methods widely used by organizations
1. Management by Objectives (MBO)
MBO
is an appraisal method, where the managers and subordinates work towards a
common goal which is identified, planned, organized and communicated to focus
on a specific period of time. It is the superiors’ responsibility t
periodically review the subordinates progress towards achieving the set common
goal.
The
set common goal should be SMART:
- S – Specific
- M – Measurable
-
A – Achievable
-
R – Realistic
- T – Time-sensitive
MBO
has 4 steps to it:
1.Goal
Setting – Individual goals are set in order to attain the common goal of the
organization
2.Performance
Standard – Employees are being evaluated on the process of their set target
against the specified time frame.
3.Comparison
– Employees periodically review their performance against the set target and
discuss on drawbacks to achieve the set target.
4.Feedback
– Finally the employees’ get-together to evaluate their final performance
within the set period and reward accordingly. And to evaluate on areas to
improve and set new targets and continue the process.
2. 360 Degree Appraisal Method
This is an appraisal method where an employee’s performance is determined based on the views and reviews from his/her direct supervisors, Managers, Peers and Customers. This enables the employer to assess the employees’ fullest competent in a holistic view.
This Appraisal method has 5 integral components:
1. Self-Appraisal – Employee gets an opportunity to assess themselves on their goal attainment
2. Managerial Reviews – Performance reviews conducted by Managers’ which includes employee ratings and rewarding.
3. Peer Reviews – Co-workers get a unique opportunity to express their insights about the employees’ performance and contribution individually as well as to the team.
4. Subordinate Appraising Managers – Evaluation done from managerial point of view.
5. Customer
/ Client Reviews – Feedback can be gathered from Internal
and External customers who dealt with the employee on a regular basis.
3. Human Resource (COST) Account Method
Cost
accounting method analyses the performance by means of financial income the
employee has brought into the company against the cost of retaining the
employee.
Retaining Cost would comprise of Financial Benefits, cost on training and development etc. meantime financial benefits a company has yield from the employee, in a Banks perspective, How Many Accounts, Personal Financial Services canvassed, Value of deposits canvassed and so on.
In
conclusion, performance appraisal is a clinical aspect in every industry since
these appraisal decides their financial benefits which motivates the employee
to contribute his fullest to the organization.
References
Anon., 2020. www.Kissflow.com. [Online]
Available at: https://kissflow.com/hr/performance-management/employee-performance-appraisal-method/
[Accessed 24 July 2021].
Anon., n.d. www.shareyouressay.com.
[Online]
Available at: https://www.shareyouressays.com/knowledge/4-main-steps-involved-in-the-mbo-technique-of-performance-appraisal-to-improve-the-efficiency-of-your-organisation/94520
[Accessed 24 July 2021].
Chand, S., n.d. www.yourarticlelibrary.com.
[Online]
Available at: https://www.yourarticlelibrary.com/performance-appraisal/performance-appraisal-methods-traditional-and-modern-methods-with-example/35492
[Accessed 24 July 2021].
While traditional methods lay emphasis on the rating of the individual's personality traits, such as initiative, dependability, drive creativity, integrity, intelligence, leadership potential...the modem methods, on the other hand, place more emphasis on the evaluation of work results. Yes I do agree with your argument Arun.
ReplyDeleteHello, Arun. It is a fantastic topic that clearly explains the importance of performance appraisal and using the most up-to-date evaluation techniques could improve employee performance and company's growth.
ReplyDeletePerformance appraisal process is nessecery to understand the gaps between employees and the organisation. Ultimately will result in improving the overall efficiency of the organization. I agree with your point about Performance appraisal in this article
ReplyDeleteGood job Arun. As a part of an organization, each employee is looking to grow in terms of status, finances and, skills. Over the past decade, companies have realized the importance of having a performance appraisal system for promotion and compensation decisions. However, most companies and employees are unsatisfied with the existing annual appraisal methods. Employees today are more self-aware and looking for ways that help them cultivate their skills and improve in real-time. For this, companies need to adopt a more hands-on approach to offer regular constructive feedback to employees. To provide a more real and unbiased system for performance evaluation, there are many modern methods as you have explained
ReplyDeleteYes Arun, as you tried to explain, Employee performance appraisal is critical for any organization. It helps the management to track employee performance, which is directly linked to organizational growth. It helps in boosting employees' motivation, productivity, and commitment to the organization. Thank for sharing
ReplyDeleteEvery company has its own performance evaluation system. Performance appraisal is required to understand employee-organization gaps. Ultimately, this will improve the organization's overall efficiency. I agree with this article's performance appraisal point. Good one Arun.
ReplyDeleteNice article and informative.
ReplyDeleteA performance appraisal is a periodic evaluation of an employee's job performance as measured by the organization's competency expectations.
The significance of the relationship and alignment between the PA process, which serves as the foundation for most PM systems, and the HRM system has been well documented (Aguinis, 2013). After all, the secondary purpose of PA has historically been to support administrative decisions regarding pay, promotion, and other such matters (Latham & Wexley, 1994).
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ReplyDeletePerformance evaluation is the way of providing feedback and documentation about an employee's performance over a specified period of time, and can provide a clear link between expectations and job objectives. Performance appraisal can also serve as a constructive tool that help to mentor employees in the areas of development and improvement.
ReplyDeleteThank You Friends for your valuable feedback and inputs.
ReplyDeletePerformance evaluation is the key factor of inspiring and motivating your employees. This give and clear idea about employee performance and whether they are working positively. Of course a good channel to measure level of business operation and employee engagement. This is the foundation for employee increment and employee developments also.
ReplyDeleteImportant topic Arun,The reward and recognition of the employees can be a great benefit to the organization.Dedicated employees stay longer, are actively involved in the workplace and achieve better results. Improving employee engagement is essential to increase productivity and maximize return on investment. Performance management, when done well, is an important tool for having dedicated employees.
ReplyDeletePerformance Management is a very important management tool in all organizations. A proper PM includes regular feedback and the separation of interaction between managers and team members, allowing managers at all levels to identify performance gaps and how to resolve them as quickly as possible and keep everyone motivated to improve employee engagement, productivity and profitability. Worth to read.
ReplyDeleteOverall a great article Arun! I personally think it really highlights the importance of having a proper performance appraisal which would help any organization to asses their own & their employees current position in order to successfully make the necessary adjustments going forward.
ReplyDelete