7 Applied Methods of Performance Appraisal
To boost productivity of employees and improve the overall organizational outcomes, performance appraisal is essential. Methods of Performance appraisals as the name suggests, is based on certain predefined series of prospects.
It is a yearly process where appraisals are decided based on the performance of the employees that year. Performance and process management is crucial, not just because it is the decisive factor for increasing an employee’s wage and promotion but also because it helps in accurate evaluation of the skills of employees, their strengths, and their limitations.
However, the performance appraisals are rarely put to good use as the pre-existing performance appraisal methods don’t succeed internalizing the results of employee performance. HR managers need to rethink and uplift their present performance appraisal methods so you can prevent it from becoming just an empty buzzword! Here’s a list of 10 applied performance appraisal methods to solve your problem.
What is Performance Appraisal?
Performance appraisal definition is the set of processes used for evaluating the employee performance over a certain time period to assess and find the best ways to improve their success. It is usually established as a quarterly or annual process in a workplace.
It involves evaluation of productivity and performance of each and every employee against certain proven set of key values for that quarter or year. No matter what we believe, Pay-for-performance still exists. It is done by proper evaluation of the skills, shortcomings, and strengths for determining promotions and raises in the employee wages.
You cannot yield effective outcomes from traditional methods of employee engagement today. These methods are primarily focused more to measure the past performances of an employee, instead of improving the future work. That is why many organizations consider the whole process as vague and futile.
But making a few changes in the methods and perspectives, performance appraisals can prove to be very beneficial. Let’s have a look on some of its benefits.
How the Business Process Reengineering works? | Methodology
Business Process Reengineering (BPR) is a sensational initiative for change. Its methodology is based on five core areas, which are laid as follows:
- Refocus: Align company values with the customer needs and demands.
- Redesign: Draft and design core processes to enable business process improvements using information technology (IT).
- Reorganize: Convert individual teams into cross-functional teams to hold up end-to-end responsibility of a process.
- Rethink: Think about the basic organizational needs and issues people facing with the current system.
- Improve: Keep in mind all the business processes across the organization and work to improve them.
What are the Benefits of Performance Appraisal?
The major benefits of performance appraisal are as follows:
- Defines business goals and objectives clearly.
- Provides effective and real-time feedback and reviews to the entire team.
- Enhances the performance and productivity of the employees.
- Spots development, training and improvement requirements.
- Offer insights into the ineffective and counter-productive tasks.
- Improves employee retention and engagement.
- Aligns individual performance with organizational objectives to achieve the best possible results for both.
- Transforms the workforce into a deliberate benefit.
What are the Methods of Performance Appraisal?
Let us talk about 7 applied, tried and tested performance appraisal methods.
1.Management by Objectives (MBO)
Management by objectives (MBO) is an appraisal method in which the employees and managers identify, strategize, manage, and communicate the objects together to emphasis on for a specific appraisal period. After locating goals clearly, managers and subordinates to discuss the advancements made to control and discuss the feasibility to achieve the set of objectives periodically.
It uses the SMART method to clearly define the set of goals given below:
- Specific.
- Measurable.
- Achievable.
- Realistic.
- And time-sensitive.
This method focuses on matching the principal organizational prospects with the employee objectives effectively using the above SMART technique.
By the end of the review period: quarterly, half-yearly, or annually, the employees are judged based on their results. Success of employees are rewarded with promotion and a salary raise, whereas failure leads to transfer or further training.
This performance appraisal methods focuses completely on the tangible goals; intangible aspects like interpersonal skills, commitment, etc. are usually ignored.
2. 360-degree Feedback
360-degree feedback method is a multidimensional performance appraisal methods. It evaluates an employee based on the collected feedback from the circle of influence by the employees, namely managers, peers, customers, and direct reports.
This method eliminates bias or any kind of partiality in the performance reviews and also offers a clear insight on an individual’s capability. There are five integral components of the 360-degree feedback method, which are as follows:
- Self-appraisals
Self-appraisals allow employees to look back at their performance and have a clear understanding of their strengths and weaknesses. But, if self-appraisals are not performed with formal procedures or structured ways, it can become lenient, inconsistent, and unfair.
- Managerial Reviews
Managers do the performance appraisal as a part of the traditional and basic form of appraisal methods. All the reviews include the ratings of an individual employee that the supervisors award along with the evaluation of the entire team or program that senior managers do.
- Peer Reviews
As the status of hierarchies move out of the organization in the picture, a unique vision of the employee performance is observed. This helps us to get a unique perspective on the performance of the employee making them the most relevant evaluator.
- Subordinates Appraising Manager (SAM)
This is a delicate and significant step in the 360-degree appraisal method. Reporters usually have the most unique perspective from a managerial point of view. But any reluctance or fear of retribution can twist the appraisal results.
- Customer or client reviews
This component includes either the internal customers (users of product within the organization) or the external customers (not a part of the company but communicate with the specific employees on a regular basis).
Customer reviews keep a better check on output of an employee performance.
3. Behaviorally Anchored Rating Scale (BARS)
Behaviorally Anchored Rating Scales (BARS) highlights both, the qualitative and quantitative advantages in the performance appraisal process. BARS compare the performance of the employees with specific behavioral examples that are attached to the numeric ratings.
The performance level on a BAR scale is anchored by various BARS statements that describe the common behaviors exhibited by the employees regularly.
The very first step of BARS creation is to generate critical incidents to describe the typical workplace behavior. And, the next step is to edit the crucial incidents into a common format and remove any redundancies.
4. Critical Incident Method
This is a method where the employer evaluates the employee on the basis of certain events, known as the “critical incidents”. Through the employee either succeeds tremendously or fails adversely in any given task.
Throughout the whole process, the evaluator has to maintain a digital or substantial journal in which the information from the different incidents are stored. This process is manually demanding, but is beneficial for the growth of every employees individually.
5. Assessment Centre Method
This performance appraisal methods works by assessing the employee performance in social and community-related situations. Employees need to participate in situational exercises like in-basket exercises, workgroups, simulations, role-playing exercises, etc. that highlight their potential success rates in various roles and responsibility-bearing capabilities.
6. Psychological Appraisals
This method determines the hidden potential and talents of the employees as it focuses on evaluation of an employee’s future performance rather than the outcomes of their past work. The qualified psychologists are requested to conduct a series of different tests to be run on employees.
These tests include:
- In-depth interviews,
- Psychological tests,
- And private discussions.
The method is thoughtful and thorough but it is evidently be a slow, complex, and costly process. Moreover, the quality of the results is based upon the psychologist who administers the business process and a variety of external influences that may affect the employee during testing (e.g.; personal stress-related issues). So, the results might be inconsistent sometimes.
7. Checklist Method
This method is based on a number of Yes or No form of questions in a series of checklist statements of the traits of employees. The rater, here performs just the reporting or checking and it is the HR department which does the actual evaluation.
It is an economical method and doesn’t require much training or standardization. But its disadvantages involve– Raters partiality, use of inaccurate weighs by HR, and non-allowance to rater to give relative ratings.
Conclusion
Opting the correct performance appraisal methods is essential to reflect the thought-process of your employees and employee morale. This shows how much you care for the employee’s individual growth.
After finding and figuring out the ideal performance review method for your needs, the next step is to implement it properly in order to eliminate critical performance gaps and to address the pressing issues impacting the ROI.
What are the best performance appraisal methods?
The 7-best applied, tried and tested methods of performance appraisal.
1. Management by Objectives (MBO)
2. 360-degree Feedback
3. Behaviorally Anchored Rating Scale (BARS)
4. Critical Incident Method
5. Assessment Centre Method
6. Psychological Appraisals
7. Checklist Method
What is Performance Appraisal?
Performance appraisal definition is the set of processes used for evaluating the employee performance over a certain time period to assess and find the best ways to improve their success. It is usually established as a quarterly or annual process in a workplace.
What are the Benefits of Performance Appraisal?
The major benefits of performance appraisal are as follows:
• Defines business goals and objectives clearly.
• Provides effective and real-time feedback and reviews to the entire team.
• Enhances the performance and productivity of the employees.
• Spots development, training and improvement requirements.
• Offer insights into the ineffective and counter-productive tasks.
• Improves employee retention and engagement.
• Aligns individual performance with organizational objectives to achieve the best possible results for both.
• Transforms the workforce into a deliberate benefit.
Key Highlights
- Business Process Management
- Business Process Architecture
- Business Process Mapping
- Business Process Re-engineering
- Robotic Process Automation
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