The most popular technique for appraising performance is the graphic rating scale.

Methods of performance appraisal:

Performance appraisal is generally conducted with the aid of a predetermined and formal method. Different methods of performance appraisal are shown below—

1. Graphic Rating Scale Method,
2. Alternation Ranking Method,
3. Paired Comparison Method,
4. Forced Distribution Method,
5. Critical Incident Method,
6. Behaviorally Anchored Rating Scales, and
7. The Management by Objectives Method.

These are described below—

Graphic Rating Scale Method:

The graphic rating scale is the simplest and most popular technique for appraising performance. Graphic rating scale is a scale that lists a number of traits and a range of performance for each. The employee is then rated by identifying the score that best describes his or her level of performance for each trait. The main advantage of this method is it provides a quantitative rating for each employee. On the other side, halo effect, central tendency and also other things make an unclear sense of the result.

Alternation Ranking Method:

Ranking employees from best to worst on a trait or traits is the alternation ranking method. This is easier to distinguish between the worst and best employees that to rank them. The main advantages of this method are it avoids central tendency and other problems that occur in the graphic rating scale. But it has also some limitation. It can cause disagreements among employees and may be unfair if all employees are, in fact, excellent.

Paired Comparison Method:

Paired comparison method refers ranking employees by making a chart of all possible pairs trait and indicating which the better employee of the pair is. The paired comparison method helps make ranking method more precise. For every trait, every subordinate is paired with and compared to every other subordinate.

Forced Distribution Method:

The forced distribution method is similar to grading on a curve. With this method, predetermined percentages of rates are placed in performance categories. For example, one may decide to discuss employees as follows—

• 15% high performers,
• 20% high-average performers,
• 30% average performers,
• 20% low-average performers,
• 15% low performers.

Critical Incident Method:

This method refers to keep a record of uncommonly good or undesirable examples of an employee’s work-related behavior and reviewing it with the employee at predetermined times. This method can always be used to supplement another appraisal technique and in that role it has several advantages. These are—

• It provides with the specific hard facts for   explaining the appraisal.
• It ensures that the supervisor thinks about the subordinate’s appraisal all during the year because the indicators must be accumulated therefore.
• The rating does not just reflect the employees’ most recent performance.
• Keeping a running list of critical incidents should also provide concrete examples of that specifically the subordinate can do to eliminate any performance deficiencies.

Behaviorally Anchored Rating Scales:

A BARS combines the benefits of narratives critical incidents and quantified ratings by anchoring a quantified scale with specific behavioral examples of good or poor performance. Developing BARS typically requires the following five steps:

• Generate critical incidents: Person who knows the job being appraised is asked to describe specific illustrations of effective and ineffective performance.
• Develop performance dimensions: These people then cluster the incidents into a smaller set of performance dimensions. Each cluster is then defined.
• Reallocate incidents: Another group of people who also know the job then reallocate the original critical incidents. They are given the clusters’ definitions and the critical incidents and area asked to reassign each incident to they think it fits best.
• Scale the incidents: This second group is generally asked to rate the behavior described in the incident as to how effectively or ineffectively it represents performance on the appropriate dimension.
• Develop final instrument: A subset of the incidents is used as behavioral anchors for each dimension.

There are also some advantages of this method. These are—

• It standard is more clear than other method,
• It provides feedback,
• More accurate gauge,
• It is more consistent than others,
• All dimensions are independent.

The Management by Objectives (MBO) Method:

Management by objectives involves setting specific measurable goals with each employee and then periodically reviewing the progress made. The term MBO almost always refers to a comprehensive organizaionwide goal-setting and appraisal program that consists of six main step—

• Set the organization’s goal,
• Set departmental goals,
• Discuss departmental goals,
• Define expected result,
• Performance review,
• Provide feedback.

8 performance appraisal methods you should be aware of

Performance appraisals form an essential part of the HR department as they provide important and useful information for the assessment of employee’s performance, skill, knowledge, and overall ability. These appraisals are not only used to eliminate behavior and productivity issues, but also to motivate employees to contribute more. There are many modern performance appraisal methods that organisations can implement depending on their preference: most have their specific advantages as well as limitations. Let us have a look at some of them in more detail.

What are the different performance appraisal methods?

Graphic Rating scale:

A graphic rating scale lists the traits each employee should have and rates workers on a numbered scale for each trait. The scores are meant to separate employees into tiers of performers, which can play a role in determining promotions and salary adjustments.  The method is easy to understand and quite user friendly. It allows behaviors to be quantified making appraisal systems much easier.

What are the methods of performance evaluation in Graphic rating scale?

However, the scale has disadvantages that make it difficult to use as an effective management tool. Even with intense training, some modern performance appraisal methods will be too strict. Some will be too lenient, and others may find it hard to screen out their personal agendas. Although it is good at identifying the best and poorest of employees, it does not help while differentiating between the average employees.

Analyse performance of employees working on Project A from April to June 2017

Essay Performance Appraisal method:

Essay Appraisal is a traditional form of Appraisal also known as “Free Form method.” It involves a description of the employee’s performance by his superior which needs to be based on facts and often includes examples to support the information. Under this method, the rater is asked to express the strengths and weaknesses of the employee’s performance.

What are the techniques of performance appraisal in the Essay Performance Appraisal method?

This technique is normally used with a combination of the graphic rating scale in one of the modern methods variants, because the rater or feedback giver can present the scale in more detail by also giving an explanation for his rating. While preparing the essay on the employee, the rater also needs to consider specific job knowledge, understanding of the company’s policies and objectives, relations with peers, ability to plan and organize, attitude and perception of employees in general.

The Essay performance appraisal methods are non-quantitative and highly subjective. While it provides a good deal of information about the employee, it takes a lot of time of the appraiser which is not always feasible.

Checklist Scale performance appraisal method:

Under this method, a checklist of statements of traits of the employee in the form of Yes or No based questions is prepared. If the person giving the feedback believes strongly that the employee possesses a particular listed trait, he checks the item; otherwise, he leaves the item blank. Here the rater only does the reporting or checking and the HR department does the actual evaluation after observing details over a period of time – and it does not allow detailed analysis of the overall performance.

Critical Incidents method:

In this method, managers prepare lists of statements of very effective and ineffective behavior of an employee. These critical incidents or events represent the outstanding or poor behavior of employees on the job. The manager maintains logs on each employee, whereby he periodically records critical incidents of the workers behavior.

What is a performance appraisal in Critical Incidents method

At the end of the rating period, these recorded critical incidents are used in the evaluation of the workers’ performance. It provides an objective basis for feedback and conducts a thorough discussion of an employee’s performance appraisal process – hence also known as cost accounting method.

Although this method avoids recency bias, there is a tendency for manager and employee both to focus more on the negative incidents than otherwise.

Work Standards performance appraisal method:

In this technique, management establishes the goals openly and sets targets against realistic output standards. These standards are incorporated into the organizational performance appraisal system. Thus each employee has a clear understanding of their duties and knows well what is expected of them. Performance appraisal and interview comments are related to these duties. This makes the appraisal process objective and more accurate. It works best in long-term situations for human resources teams, as it considers performances during that duration and eliminates time consuming processes.

However, it is difficult to compare individual ratings because standards for work may differ from job to job and from employee to employee. It does not allow for reasonable deviations.

Ranking Appraisal:

Here the manager compares an employee to other similar employees, rather than to a standard measurement predefined for employee productivity. The employees are ranked from the highest to the lowest or from the best to the worst. The problem here is that it does not tell how much better or worse one is than another. Also it cannot be used for a large number of employees, or feedback.

Attention to detail

Initiative

Knowledge

MBOs

Management by objectives (MBO) methods of performance review are results-oriented. That is, they seek to measure employee performance by examining the extent to which predetermined work objectives have been met. Usually the objectives are established jointly by the supervisor and subordinate. Once an objective is agreed, the employee is usually expected to self-audit; that is, to identify the skills needed to achieve the objective. Typically they do not rely on others to locate and specify their strengths and weaknesses. They are expected to monitor their own development and progress, and drive their future performance. The MBO method of performance review concentrates on actual outcomes.

What makes MBOs efficient is the ability to set SMART Goals i.e. set goals that are Specific, Measurable, Actionable, Relevant and Time-bound.

BARS:

The problem of judgmental performance evaluation inherent in the traditional methods of employee performance appraisal process led to some organisations to go for objective evaluation by developing a technique known as “Behaviorally Anchored Rating Scale (BARS)” around the 1960s. This performance appraisal method is considered better than the traditional ones because it provides advantages like a more accurate gauge, clearer standards, 360 degree feedback, and consistency in evaluation.

The BARS method is designed to bring the benefits of both qualitative and quantitative data to the employee appraisal process. It compares an individual employee’s performance against specific examples of behaviour that are anchored to numerical ratings.

Although even this method has its limitations as it is often accused of being subject to unreliability and leniency error.

Performance appraisal process is already being considered a necessary evil. Thus companies need to be careful while selecting out of these appraisal methods and accept feedback on improving the process. The method should be able to provide value to the company starting from the review period as well as the employees and managers.