7 Effective Performance Appraisal Methods You Should Adopt

Performance appraisal is an excellent way for employers and supervisors to evaluate employee performance, recognize organisational silos and identify employee strengths and room for improvement. 

What it also does is it opens the door to communicating individual and corporate goals and expectations, as well as frustrations. The company can gain feedback from various levels which enables better planning and alignment of duties with the capacity and capability of each individual. From a recruitment perspective, HR teams can also recognise and pinpoint characteristics and attributes for positions and duties.

As an award-winning HR Outsourcing provider and recruitment specialistLinks International knows that when it comes to performance appraisal, there is no one-size-fits-all solution. 

Performance appraisal methods and techniques can be broadly categorised into past-oriented methods and future-oriented methods that review past behaviours or predict potential performance. Many companies are employing multiple approaches for an all-rounded view of their employee performance.

Here are 7 effective performance appraisal methods you should adopt:

1. The 360-degree Feedback

Employees are assessed by multiple raters who have interacted with him/her, including supervisors, peers, subordinates, and sometimes external stakeholders. By receiving feedback, often in the form of a questionnaire, HR can obtain measurable results of both subjective and objective areas of the individual. Due to the involvement of various parties, this performance appraisal method can be time-consuming

2. Essay Performance Appraisal

A traditional free-form, non-quantitative staff appraisal method, an employee’s superior is asked to describe in written form the performance of the employee. The rater expresses the strengths and weaknesses as well as job competency and capacity of the employee’s behaviours based on facts with supporting examples. While the method takes a lot of time and highly subjective, it can provide detailed information about the employee.

3. Critical Incident Technique (CIT)

The technique requires rater, or sometimes the employees themselves, to maintain logs of outstanding behaviours in critical incidents and behaviours that need improvement. Experts are usually called upon to evaluate and score the behaviours to identify the best performing employees and poor performing employees. Some managers may find this performance appraisal method demanding as they need to document the incidents as they occur. This technique is useful in identifying strengths and room for improvements of the employees.

4. Behaviourally Anchored Rating Scale (BARS)

A combination of CIT and rating scale methods with a focus on both qualitative and quantitative data of the performance appraisal process. Designed to solve issues related to subjectivity and judgemental errors commonly found in traditionally used rating scales, which is based more on the perception of the raters, and can vary dramatically if the raters did not agree on the definitions of the rating factors. BARS compare the performance of the employee against examples of behaviours that are specific and anchored to a numerical rating. 

5. Management by Objectives (MBO)

Assessed by the extent predetermined work objectives are met. The outcome-focused method encourages communication between employee and supervisor in order to establish a set of “S.M.A.R.T.” objectives that they mutually agreed upon on. These goals are Specific, Measurable, Assignable, Realistic and Time-bound. The employee gains a clear understanding of what is expected of them and the relevance of his/her work to the company’s goals.

6. Psychological Appraisal

Instead of focusing on past work, this staff appraisal method takes into account the employee’s potential for future performance. Evaluating the employee’s psychological characteristics, including intellectual, emotional, motivational traits that are relevant to predict their future performance potential. Often, this is conducted through psychological tests, interviews, discussions with supervisors. 

7. Paired Comparison

Ideal for smaller-scaled companies, start-ups, or assessment within a team. Under this method, an employee is rated with every individual in the form of pairs, sometimes only with those of the same job level. Raters will examine and compare skills, behaviours, attitudes of each pair of employees. The scores derived in this appraisal method are often compared with the standard deviation and means of all scored collected. However, it could be an extremely slow evaluation process in large organizations. 

While staff appraisal may be seen as a mundane and time-consuming managerial task, but when done effectively, you can expect a boost in employee productivity and employee engagement

Links HR Outsourcing is an award-winning one-stop human resource outsourcing provider in the Asia Pacific. If you’re interested to know more about us and how we can help with your business growth, please click here.