The process of performance appraisal is one of the significant function of performance management system. There are two fundamental goals of appraising the performance of employees. The first among them is to develop those measures which can correctly assess the performance of an individual. The second is to evaluate the processes and functions of the organization by creating a useful evaluation system. These both goals give the necessary platform for designing the overall process of performance appraisal.
It is highly important that the methods used for performance appraisal should be valid as well as reliable because the results of this process will have a massive impact of the functionality of the departments as well as the individual employees. But along with this dimension these days the companies emphasizing the workability of the whole process. The performance appraisal system should be able to address and communicate the standards of the organizations to the employees working for them. The HR managers get the most reliable and comprehensive data from the results of performance appraisal process for training and development. With the help of performance appraisal, the training managers get to know about the areas of improvements where the employees need the training to enhance the efficiency.
Methods used for performance appraisal system
There are different methods with the help of which we can assess the performance of the employees. Some ways apply to particular organizations, but they are not suitable for other companies. The first can create their performance appraisal system by using one or more methods from the overall list. The performance appraisal methods are divided into two broad categories in which the first is the traditional methods and the second are the modern methods.
The first step in assessing the performance of any employee the organization should have a written record about different duties of a particular task and the skills required to do that task efficiently. The article “Job Analysis and Performance Dimensions in HRM” will help you to know about the various dimensions of performance of the employees as well as what kind of information a job analysis procedure will provide top the managers.
The Traditional Methods of performance appraisal
The traditional methods are those methods which have been used by the organizations for the longest time known by the organizational history. These processes include a long list of appraisal methods which are discussed as below:
- The Ranking method
This is one of the oldest methods for appraising the performance of the employees. This is also considered one of the most systematic approaches also. In this method, the employees are compared with the performance of other employees working with him/her in the same department. With the help of this method, the order of the value and the worth of an employee is also assessed. All the employees are ranked either from the worst to best or the vice versa. Here the characteristics of the employee who has performed the best are enlisted and then the second number will be given to the employee with the next highest performance level, and hence a list is prepared for all the employees.
- The paired comparison method
In this method, one trait is taken, and then the performance of every employee is evaluated by comparing it with other employees on one to one basis. The employees get their ranking by how many time he/she gets a better performance rating than the other employee with whom the performance or results are being compared. The more the employee has considered better than the other employee, the better it is for his/her rating. This method loses its usability when the organization is big, and there are a large number of employees to be compared with each other. Then this task becomes tedious as well ambiguous and cannot provide right results.
- The Grading method
To use this method, the managers have to design the categories of the worth before starting the process of performance appraisal. These categories should be defined very carefully and should give an accurate and uniform inference for similar kind of jobs. Mostly there are three categories which are used by the companies and that are: Outstanding performance, satisfactory and unsatisfactory. Nowadays the companies are usually using more than three categories. According to the results the employee has achieved he/she is given one specific grade which aptly describes his or her performance.
- The Force distribution method
Tiffen introduced the technique of force distribution, and the primary reason for evolving this method is the central tendency in the ratings due to which almost all the employees get the higher level of the performance rating. This method eliminates this possibility, and this is its best usability. The force distribution is particularly useful for the larger firms with a large number of employees. This is one of the best methods to reduce or eliminate the bias in the ranking of the employees.
- The Forced choice method
J.P Guilford developed this method for appraising the performance. In this method, there are different serious of various groups of statements. The manager must rate the employees according to how accurately one specific statement decisions the attributes and the performance of the employees. Commonly there are both types of the statements that are positive as well as negative to give the overall picture of the evaluation. Every statement used in this evaluation method has certain weight or score, but it is usually not told to the person who rates the employee. The human resource department evaluates the employees according to the set standards or score for each statement once they get the forms. This method utilizes a lot of time and effort on the part of the rater as well as the human resources personnel. This is usually considered as the one disadvantage of this method.
- The checklist method
There is a considerable burden on the person who provides a rating to each employee. The check-list method is a method which helps to ease that burden with its easy to use and rate approach. There are different statements in this evaluation method, and every question or statement has two columns in front of it that are of “yes” and “no”. According to the performance and behaviours of the appraisee, the evaluator ticks the most relevant option among both for every assertion or question. Every question or statement gets the weight in the evaluation procedure according to its importance to perform a particular task.
There is a disadvantage of this method which makes it not very popular evaluation method in various organizations and that is it is challenging to assemble all the results and then assess them according to their different weight. As there are so many jobs in even one department of the companies and it becomes nearly impossible to gather the correct data for every job with this method. For using the check-list method of performance appraisal, the companies have to invest lots of time, energy and money as well.
- The critical incident method
In this method of performance appraisal, the managers focus on those behavioural traits which help to distinguish between doing a job efficiently to achieve the desired results and doing a job for its completion only. With this method, the evaluators get to know about the competencies which make one person excel in his or her area. This method is divided into three main steps which are discussed as below:
- The first step is to create a list of the all desired on-the-job behaviours
- In the second step, every behaviour is assigned with a particular weight by a group of experts who have in-depth knowledge of all the processes and the skills required to perform specific
- The final and third step involves the preparation of a list of incidents which describe the particular behaviour of the employee. When this checklist is prepared thoroughly, then it is sent to the person who has to rate the employees.
With this method of evaluating the organizations get to know about the ability of the person to take right decisions in critical incidents. This method does not assess the personality of a person. Instead, it determines the performance of the worker. The major drawback of this technique is that it is highly time-consuming because writing every critical incident and evaluating it is a burdensome task for the appraising manager.
- The Graphic Rating Scale Method
The graphics rating scale method is considered as one of the most popular performance evaluation technique among the traditional methods. The reason behind its popularity is the simplicity of the procedure which is required for the carrying out this process. One another name of this appraisal method is linear rating scale. A printed appraisal form is needed for this method. First, all the traits are listed which justify the duties and competencies related to a job. Then in front of each feature different criteria of performance characters are written.
Commonly the five-point scale is used to give the rating to every performance factor. The rater has to offer that rating to the employees every performance trait which most suitably describes his/her performance levels. The graphic rating scale is particularly useful for the evaluating the range of behaviours an employee should possess for a particular position. One disadvantage which might somehow decrease its legitimacy is the biasedness of the appraiser, but otherwise, it usually gives an unambiguous picture about the performance, and behavioural attributes of the employees and that are why almost all the organizations use it.
- The essay method
If we talk about the most straightforward process of performance appraisal, then it is the essay method. Here the manager uses the narrative approach where he or she describes the strengths, weakness, areas of improvement, employee’s performance in the past, the potential of the worker which can be unleashed and the suggestion how to achieve that. The essay method of performance appraisal does not require any complicated format and nor does it need the expertise to complete it. But if the writer of the assessment is not specified with the length and content of the essay, then it might lose its purpose. One more drawback of this technique is that the writing skills of the appraiser impact the appraisal of the employee, and moreover it only provides the qualitative information which can not be measured to give a rating to the employee.
- The field Review method
The appraisal methods are usually subject to the bias and therefore if the companies want to eliminate this biasedness, then they have to use the field review method. In this method, the appraisal forms are reviewed by a person designated for this role. This technique no doubt helps in providing a bias-free rating and results, but it is a lost a time-consuming process. Therefore this method of appraisals is not used by the organizations that often.
- The confidential Reports
This method of evaluation is primarily used in the government sector, and the process is carried out by the immediate boss or the head of the department if some employee has to be given a promotion or a transfer. There are many factors which are addressed in this method and used for assessing the performance of the person, and these are intelligence, attitude, decision making capability, motivation, character, attendance, strengths and weaknesses etc.