Popular Methods of Performance Appraisal in Corporates

So here comes the most crucial time of the year. A time when the performance of the employees is evaluated, assessed and discussed thoroughly. It’s a task of a manager to communicate weaknesses and strengths of the team members, while identifying new opportunities to help them develop professionally.

Why are there so much discussions about performance appraisal now? It is because performance appraisal and performance improvement are directly interrelated and there is a growing need for the businesses to recognize and retain the talent, if they wish to remain competitive in the market.

Performance appraisal methods include assessment of an employee’s performance in a systematic way. Companies take up this as a developmental tool to ensure an all-round development for everyone in the system. The common criteria for performance management is focused around the employee’s subject knowledge, quality and quantity of the work done, initiatives, leadership qualities, dependability, teamwork, as well as versatility.


Also Read – 5 Ways to Ensure Efficient Performance Appraisals


Objectives of Performance Appraisal

‎✓  Improving productivity of an individual and company

‎✓  Helping managers make informed decisions related to organizational changes

‎✓  Providing a well-defined framework to assess a job description

✓  Evaluating employees with respect to their job descriptions and company goals

‎✓  Determining strengths and weaknesses of every individual

‎✓  Chalking out goals and strategies to achieve new goals, based on improvements and strengths of the employees


Performance Appraisal Methods can be categorized into –


‎1.  Traditional Methods

2.  Modern Methods


1. Traditional Methods

As the name suggests, traditional methods are the older methods of a performance review, and this includes studying the personal qualities of the employee, including their knowledge, initiatives taken, loyalty towards the company, and leadership and judgment skills.


a) Ranking Method

This includes ranking the employees from the best to the worst.


b) Graphic Rating Method

In graphic rating, the personal and behavioral traits of the employees are listed and they are assessed based on their levels of performance.


c) Critical Incident Method

This methodology describes the identification of the critical incidents during the task performance.


2. Modern Methods

Modern methods were introduced to overcome the loopholes in the traditional performance appraisal techniques. Take a look at the popular modern methods of performance appraisal –


a) Self-Assessment

Here the employee is asked to evaluate his/her work by filling a form and describe the work done. The advantage of using self-assessment methodology is that it opens up doors for a healthy conversation between the employees and managers, allowing them to discuss critical pointers and solve discrepancies, if there are any.


Also Read – How to Prepare For Your Annual Performance Appraisals Review


b) Graphic Scale

This method is the most commonly used by the managers in which the employee’s performance is graded on a scale. It helps the managers to compare the performance of the employees, while keeping a tab on the consistency and improvement made by them. The grading system uses a 5 point rating scale to assess the performance of the employees. Here is a performance appraisal sample depicting a graphic scale method.


Rating (Scale of 1 – 5)


Rating 5 – Exceptional Does an excellent job. Motivates teams. Ensures roles & responsibilities are understood and executed well.
Rating 4 – Exceeds Expectations Does a very good job. Strong team player. Often motivates peers and understands roles and responsibilities.
Rating 3 – Meets Expectations Consistent performer with a limited contribution to innovations and team building.
Rating 2 – Below Expectations Lacks experience in team building and defining new roles. Does not take up initiatives.
Rating 1 – Needs Improvement Unable to build a healthy team environment. Lacks skills and doesn’t contribute to work.

Note – This is just a sample. Rating scales vary from organizations to organizations.


c) Behaviorally Anchored Rating Scale (BARS)

BARS uses behavioral examples to describe multiple levels of performance against the points mentioned in the job description. BARS helps the reviewer focus on specific desirable and undesirable incidents of work behavior and then discuss the ratings accordingly.


d) 360 Degree Method

The overall growth of an employee within the organization is mainly dependent on the progress made within the department. It includes feedback from the manager, clients, team members or subordinates, if any. In the 360 degree method of appraisal, the complete profile, work performance and technical skill sets of the employee are assessed.


e) Checklist

It is one of the simplest methods of performance appraisal, where the managers are provided with a series of performance questions and have to choose from the options of Yes or No. If the responses are mostly negative, it indicates that the employee needs a developmental training. Checklists are believed to be the quickest ways to identify strengths and weaknesses of employees with respect to their performances.


In a Nut Shell

Choose the strategy that best suits your organization. Experimentation always gives a good learning experience, so never be scared to take up new things to get better results. Keep checking your appraisal forms and the appraisal methods to see these are meeting your business objectives. Treat performance appraisal as a process to ensure employee development and not just as an annual event.


Image Source: Pixabay

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Categories: Career Advice, Management

About Rashmi Karan

Rashmi Karan is a professional writer who has written for a plethora of job related websites, particularly for the Gulf region. She writes about the latest Gulf job industry trends and offers solution to all career related queries and dilemmas.

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