Performance appraisal system is assessment of employee for his/her work. The manager who work closely with the employee observes and assesses his/her work throughout the year and provides necessary feedback. The manager also identifies opportunities for the employee to grow professionally.
There are five main goals of a performance appraisal system:
- Improve the company’s productivity
- Make informed personnel decisions regarding promotion, job changes and termination
- Identify what’s required to perform a job
- Assess an employee’s performance against the goals of the position
- Improve the employee’s performance by naming specific areas for improvement, developing a plan, and giving feedback and assistance
The most appropriate method for your organisation will largely depend on the variety of different roles within your organisation, time, and objectives. It’s also possible to incorporate elements of each methodology within your review meetings. Management by objective, for example, will help you measure progress towards tangible goals, like sales targets. Whereas trait or behaviour-based appraisal could be useful in identifying how roles could be adapted to enable employees to show their strengths, or where additional training might beneficial. The important thing to remember is that you review each employee via the same process so as not to discriminate.
Types of Performance Appraisal
There are many types of of performance appraisal you can implement in your company. The popular ones are;
1.360 Degree Appraisal
Those who work closely with employees observing their performance.
This method involves feedback from several people who have contact with each employee, keeping biases firmly at bay. This could be several other colleagues, clients, customers etc and even the employee themselves.
Many HR team said 360-degree appraisal is the best approach because it’s all-encompassing and can give such a well-rounded view. Not only does it give a manager a precise understanding of an employee’s attitude and behaviour, but it can also benefit the individual by helping with self-improvement.
2. Standard Rating Scale
A rating scale takes certain behaviors, goals and traits and scores them on a scale. Every employee or team member is graded by the same standards giving insights about key team players not just individuals. Rating scales are usually numerically based. For example using a scale of one to five with five being the best possible performance. It is also possible to rate things as “poor, standard, and excellent,” or even as simple as “acceptable or unacceptable.”
3. Trait and behaviour-based appraisals
Trait-based appraisals assess characteristics that contribute to an individual’s personality, such as creativity, extroversion and confidence. This might be how warmly a customer service advisor speaks to a customer, for example.
The negatives to this type of appraisal is that it’s highly subjective and some character traits are more obvious than others, making it possible to overlook certain characteristics that are equally valuable. It’s also difficult to set measurable goals around developing character traits.
The employees assess themselves. Employees are very aware of where they excel and where they struggle. Getting a self-assessment gives you an insight to their thinking. You might not see from a managerial standpoint that a person is struggling with computer skills, but a self-assessment could show you a lack of confidence someone has in this area.
It is useful to have employees rate themselves according to the same scale standards that managers rate them. This helps both leader and the employee see gaps in performance understanding.
5. Management by Objective
See how well the employees meet the goals. These goals could include sales number, meeting or new certification. The thinking behind this modern method is based around both employee and manager goals to be achieved within a specific time period. This form of appraisal is a process rather than a one-off evaluation. It’s all about planning and being proactive rather than reactive to events and circumstances.
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