Best Performance Appraisal Method, Merits & Demerits

Presented by,Gaurav RaiRoll no 1568570008PGDM 2nd sem Sunstone eduversity

Performance Appraisal

Performance appraisal is a systematic process that evaluates an individual employee’s performance in terms of his productivity with respect to the pre-determined set of objectives. It is an annual activity, which gives the employee an opportunity to reflect on the duties that were dispatched by him, since it involves receiving feedback regarding their performance. It also evaluates the individual’s attitude, personality, behaviour and stability in his job profile.

Performance Appraisal Methods Traditional performance appraisal

• Essay Evaluation

• Paired Comparison Method

• Rating Scale

Modern performance appraisal

• Assessment Centre Method

• 360 Degree Feedback

• Behaviorally Anchored Rating Scale(BARS)

Traditional method1. Essay Evaluation • The essay method is an affordable and effective way of appraising

employees. This method involves writing a detailed descriptive essay of the performance by the employee’s direct supervisor or manager.

• The essay concentrates on describing the various strengths, weaknesses, attitude and behaviour of the individual towards job duties.

• This method is less structured and thus gives the appraiser an opportunity to explore and describe niche qualities or shortcomings of the employee that need to be worked on.

2. Paired Comparison MethodThis method bears more relevance and importance in startups/SMBs, which have small teams.• It compares each employee with every individual present

in the same team and depending on their comparative performance to the employee who has performed the best, appraisals are given.

• It is considered reliable because it follows a systematic method of comparative evaluation.

• This technique is most apt when, the organization plans on giving appraisal only to the best employee in the team.

3. Rating ScaleThis performance appraisal method can be used by startups and small businesses that are scaling and are trying to set up processes in place. • It is process-based and involves the organization to set pre-

determined objectives that employees are expected to meet.• Individuals are then rated by their supervisors or managers. • It is similar to the grading system that is usually followed in

schools, but is effective and systematic. Example:-Employees are evaluated for their skills, teamwork, communication skills, precision (purity), etc. And they are expected to meet a basic score. If they do not meet the score then they are sent for performance improvement training which would help them cope up(face) with their shortcomings.

Modern method1. Assessment Centre Method • The purpose of this method is to test candidates in

social. • This method of evaluation is helpful for assessing

managers, who have to deal with their subordinate, peers and supervisors for day-to-day business.

• It helps employers understand the capacity and the capability of the individual in social setting.

• It gives the employer an insight to the personality of the employee like openness, tolerance, introversion/extroversion, acceptability, etc.

2. 360 Degree Feedback• This method involves getting a feedback about the employee from

every individual who interacts with him during his working hours. • They can be his peers, his subordinates, his superiors, customers

who have interacted with him and even he himself would be interviewed about his perception of himself and his duties at the workplace.

• This performance appraisal method would be very useful for startups, because the best way to review an employee’s overall performance and get an insight about his behaviour, personality and attitude this is the best method to follow.

• Although it is a little time consuming, but it is cost effective and precise. It keeps biases out of play due to multiple opinions, so that the review isn’t affected by biases of one person.

3. Behaviorally Anchored Rating Scale

This is latest a modern appraisal technique, which has been developed recently.• It is claimed that the Behaviorally Anchored Rating Scale

method is one of the most equitable technique compared to other methods of appraisals.

• It is a combination of narrative techniques like essay evaluation and quantifiable techniques like rating scale.

• It is comparatively more expensive than other techniques, but it usually guarantees precision(purity) and effectiveness.

Advantages of Performance Appraisal • Provide a record of performance over a period of

time.• Can be motivational with the support of a good

reward and compensation.• Provide an opportunity for a manager to meet and

discuss performance.• Provide an opportunity for an employee to discuss

issues and to clarity expectations. • Provide the employee with feedback about their

performance.

Disadvantage of Performance Appraisal • If not done appropriately, can be a negative

experience.• Very time consuming. Especially for a

manager.• Subject to rater errors and biases.• If not done right can be a complete waste of

time.• Can be stressful for all involved.

Thank you