Appraisal method

Appraisal method is a formal method of documenting the examples of employee's both effective and ineffective actions during the rating period. Using appraisal methods towards the employees is a part of performance management, which has been defined as improving organizational performance by developing individuals and teams .

Groups of appraisal methods

Performance of the employees can be nowadays appraised by various techniques and methods. The most popular appraisal methods are distinguished into three groups:

• comparative appraisals,
• behavioral appraisals,
• output-based appraisals.

Comparative appraisal methods

The group of comparative appraisals contains methods which base on comparing the employees against one another. The most popular comparative appraisal methods are:

• Ranking – in this method, the manager creates a list of all his subordinates in order from the highest to lowest in terms of performance.
• Forced distribution - in this kind of appraisal method the supervisor has to assign only a certain proportion of his employees to each of several categories on each evaluative factor. Usually, the scale of forced distribution is divided into five categories (e.g. unsatisfactory, below average, average, good, excellent). For each category the percentage of all subordinates in the group is fixed.
• Paired comparison - in this method, each employee is compared to every other employee in the rating group in order to choose the best one.

Behavioral appraisal methods

Behavioral appraisal methods allow the supervisors evaluate each employee's performance independently, but also relative to relevant job-related behaviors which can lead to potential success. The most popular behavioral appraisal methods are:

• Graphic rating scale - it allows the supervisor to mar employee's job performance on a scale (usually five-point or seven-point). This method is very simple; therefore, it became the most frequently used performance appraisal method.
• Checklist - it is a list of words or statements that are checked by the raters. They choose the statements which match evaluated employee's behavior.
• Essay - this method is the written description of the employee's performance during the rating period.
• Critical incidents - it is the method of keeping the written record of highly favorable or unfavorable actions of the employee.

Output-based appraisal methods

For output-based appraisal methods the most relevant criteria are job products. The most popular method in this group is Management by objectives (MBO), which focuses on setting the individual goals to be reached in a specific period of time. MBO appraisal system consists of four stages:

1. Job review and agreement – on this stage the most important element is to review the job description both by the supervisor and the employee and to agree on employee's key responsibilities.
2. Development of performance standards - this stage specifies a satisfactory level of performance. This level must be specific and measurable.
3. Guided objective setting - The employee sets himself the objectives with the help of the supervisor. These objectives must be possible to achieve. They also can be different from previously set performance standard.
4. Continuing performance discussions - the supervisor and the employee make use of previously set objectives during the discussions about the employee's performance and progress. These objectives can be mutually modified.

Examples of Appraisal method

• John consistently met deadlines and went beyond what was expected of him. He was able to complete tasks in a timely manner and was always willing to help out his team members.
• Jane often came late to meetings and was not very organized. She was often unprepared and did not take initiative when given tasks.
• Carl was very organized and paid attention to detail. He was able to complete tasks within the given deadlines and was always willing to help his colleagues.
• Amy was often unprepared for meetings and did not take initiative when given tasks. She often missed deadlines and was not very organized.

Advantages of Appraisal method

Appraisal methods are an effective way of assessing employee performance and can provide an array of advantages for businesses. These advantages include:

• Increased employee motivation: Appraisal methods can help employees understand their strengths and weaknesses, and offer them the opportunity to improve in areas where they are lacking. This can lead to increased motivation and engagement in the workplace.
• Improved job satisfaction: Appraisal methods can help to identify areas where employees are excelling, and can help to create a sense of job satisfaction. This can lead to increased productivity and a better working environment.
• Increased communication: Appraisal methods can help to encourage dialogue between managers and employees. This open communication can help to create clarity between both parties and can help to identify any issues that need to be addressed.
• Improved performance: Appraisal methods can help to identify any areas where employees need to improve, and can provide feedback on how they can do so. This can ultimately lead to improved performance from employees.

Limitations of Appraisal method

Appraisal method has a few limitations that need to be taken into account for better assessment of employees' performance. These limitations are:

• Subjectivity: Appraisal methods rely heavily on the personal judgment of the appraiser, who may have biases and prejudices which could affect the accuracy and fairness of the assessment.
• Unreliability: Appraisal methods may not be reliable, as they are based on short-term observations and snapshots of employee performance instead of taking into account the long-term progress made by the employee.
• Inadequate Feedback: Appraisal methods are not always effective in providing feedback to employees, as the appraiser may not be aware of the employee’s strengths and weaknesses.
• Lack of Motivation: Appraisal methods can be demotivating for employees as it does not reward or recognize the employee’s efforts in a timely manner.
• Costly: Appraisal methods can be costly to implement and maintain as they require time, resources, and expertise.

Other approaches related to Appraisal method

Appraisal method is a formal method of documenting the examples of employees both effective and ineffective actions during the rating period. Other approaches related to Appraisal method include:

• 360-degree feedback – is a method of assessing an individual from multiple perspectives (e.g. from managers, peers, direct reports, customers, and others).
• Goal Setting – is a process for employees and their managers to agree on specific goals that the employee must achieve in order to be successful.
• Competency-based appraisals – is a method of assessing an employee’s performance based on a set of predetermined competencies.
• Performance Development Planning – is a process for employees and their managers to agree on specific goals that the employee must achieve in order to be successful.
• Continuous Performance Management – is a method of assessing an employee’s performance based on a regular, ongoing feedback loop.

In summary, Appraisal method is a formal way to document examples of employee performance, but there are other approaches related to this method such as 360-degree feedback, goal setting, competency-based appraisals, performance development planning, and continuous performance management.

Footnotes

Appraisal method — recommended articles

Merit rating — Peer appraisal — Objective setting — Bonus scheme — Management by objectives steps — Performance appraisal systems — Phases of team creation — Forced distribution method — Profile of qualifications

References

• Avasilcai S., Hutu C., Rusu G. (2016) Employee performance appraisal: a conceptual framework, "Annals of the University of Oradea", vol. 2, pp. 53-58
• Khanna M., Sharma R.K. (2014) Employees Performance Appraisal and its techniques: A Review, "Asian Journal of Advanced Basic Sciences, vol. 2, pp.51-58
• Koláčková G., Šalková A., Venclová K. (2013) Identification of Employee Performance Appraisal Methods in Agricultural Organizations, "Journal of Competitiveness", vol. 5, pp. 20-36
• Lee J., Mahesh, M. (2019) Performance appraisal methods in manufacturing industries - review and suggestions, Engineering and Technology Management Program

Author: Marta Łazarz