Methods of Conducting Performance Appraisal

There are several techniques of performance appraisal, each with some strong points as well as limitations. Some of the commonly used performance appraisal techniques are summarized below:

(i) Essay appraisal method

The assessor writes a brief essay providing an assessment of the strengths, weaknesses and potential of the subject. In order to do so objectively, it is necessary that the assessor knows the subject well and should have interacted with them. Since the length and contents of the essay vary between assessors, essay ratings are difficult to compare.

(ii) Graphic rating scale

A graphic scale ‘assesses a person on the quality of his or her work (average; above average; outstanding; or unsatisfactory).’ Assessment could also be trait centered and cover observable traits, such as reliability, adaptability, communication skills, etc. Although graphic scales seem simplistic in construction, they have application in a wide variety of job responsibilities and are more consistent and reliable in comparison with essay appraisal. The utility of this technique can be enhanced by using it in conjunction with the essay appraisal technique.

(iii) Field review method

Since individual assessors differ in their standards, they inadvertently introduce bias in their ratings. To overcome this assessor-related bias, essay and graphic rating techniques can be combined in a systematic review process. In the field review method, ‘a member of the HRM staff meets a small group of assessors from the supervisory units to discuss each rating, systematically identifying areas of inter-assessor disagreement.’ It can then be a mechanism to help each assessor to perceive the standards uniformly and thus match the other assessors. Although field review assessment is considered valid and reliable, it is very time consuming.

(iv) Forced choice rating method

Unlike the field review method, the forced-choice rating method does not involve discussion with supervisors. Although this technique has several variations, the most common method is to force the assessor to choose the best and worst fit statements from a group of statements. These statements are weighted or scored in advance to assess the employee. The scores or weights assigned to the individual statements are not revealed to the assessor so that she or he cannot favour any individual. In this way, the assessor bias is largely eliminated and comparable standards of performance evolved for an objective. However, this technique is of little value wherever performance appraisal interviews are conducted.

(v) 360-degree (multi-rater) assessment process

360-degree feedback, also known as ‘multi-rater feedback’, is employee development feedback that comes from colleagues, peers and managers in the organization, as well as self-assessment, and sometimes sources such as clients, volunteers or other stakeholders. Senior managers (including executive directors) are responsible for assessing the performance of other employees but often do not receive adequate feedback themselves. 360-degree feedback allows the individual to understand how his or her effectiveness as an employee, manager, or coworker is viewed by others.

(vi) Critical incident appraisal method

In this method, a supervisor describes critical incidents, giving details of both positive and negative behaviour of the employee. These are then discussed with the employee. The discussion focuses on actual behaviour rather than on traits. While this technique is well suited for performance review interviews, it has the drawback that the supervisor has to note down the critical incidents as and when they occur. That may be impractical, and may delay feedback to employees. It makes little sense to wait six months or a year to discuss a misdeed, a mistake or good display of initiative.

(vii) Management by objectives

The employees are asked to set or help set their own performance goals. This avoids the feeling among employees that they are being judged by unfairly high standards. This method is currently widely used, but not always in its true spirit. Even though the employees are consulted, in many cases management ends up by imposing its standards and objectives. In some cases employees may not like ‘self-direction or authority.’ To avoid such problems, the work standard approach is used.

(viii) Work standard approach

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. However, it is difficult to compare individual ratings because standards for work may differ from job to job and from employee to employee. This limitation can be overcome by some form of ranking using pooled judgment.

(ix) Ranking methods

Some of the important forms of ranking for performance appraisal are:

  • Alteration ranking method: The individual with the best performance is chosen as the ideal employee. Other employees are then ranked against this employee in descending order of comparative performance on a scale of best to worst performance. The alteration ranking method usually involves rating by more than one assessor. The ranks assigned by each assessor are then averaged and a relative ranking of each member in the group is determined. While this is a simple method, it is impractical for large groups. In addition, there may be wide variations in ability between ranks for different positions.
  • Paired comparison: The paired comparison method systematizes ranking and enables better comparison among individuals to be rated. Every individual in the group is compared with all others in the group. The evaluations received by each person in the group are counted and turned into percentage scores. The scores provide a fair idea as to how each individual in the group is judged by the assessor.
  • Person-to-person rating: In the person-to-person rating scales, the names of the actual individuals known to all the assessors are used as a series of standards. These standards may be defined as lowest, low, middle, high and highest performers. Individual employees in the group are then compared with the individuals used as the standards, and rated for a standard where they match the best. The advantage of this rating scale is that the standards are concrete and are in terms of real individuals. The disadvantage is that the standards set by different assessors may not be consistent. Each assessor constructs their own person-to-person scale which makes comparison of different ratings difficult.
  • Checklist method: The assessor is furnished with a checklist of pre-scaled descriptions of behaviour, which are then used to evaluate the personnel being rated. The scale values of the behaviour items are unknown to the assessor, who has to check as many items as she or he believes describe the worker being assessed. A final rating is obtained by averaging the scale values of the items that have been marked.
  • Behaviorally anchored rating scales (BARS): This is a relatively new technique. It consists of sets of behavioral statements describing good or bad performance with respect to important qualities. These qualities may refer to interpersonal relationships, planning and organizing abilities, adaptability and reliability. These statements are developed from critical incidents collected both from the assessor and the subject.
  • Assessment centres: This technique is used to predict future performance of employees were they to be promoted. The individual whose potential is to be assessed has to work on individual as well as group assignments similar to those they would be required to handle were they promoted. The judgment of observers is pooled and paired comparison or alteration ranking is sometimes used to arrive at a final assessment. The final assessment helps in making an order-of merit ranking for each employee. It also involves subjective judgment by observers.

A performance appraisal system could be designed based on intuition, self-analysis, personality traits, behavioral methods and result-based techniques. Different approaches and techniques could be blended, depending on the goals of performance appraisal in the organization and the type of review.

For example, management by objectives, goal setting and work standard methods are effective for objective coaching, counseling and motivational purposes. Critical incident appraisal is best suited when supervisor’s personal assessment and criticism are essential.

A carefully developed and validated forced-choice rating can provide valuable analysis of the individual when considering possible promotion to supervisory positions. Combined graphic and essay form is simple, effective in identifying training and development needs, and facilitates other management decisions.

Attributes considered in evaluating performance

There are many personality traits which could be considered when evaluating performance, and methods to facilitate such consideration include scaling methods that differentiate employees on a series of given traits. The important personality traits fall into two categories: personal qualities and demonstrated qualities.

Personality traits include: Adaptability, Appearance and bearing, Decisiveness, Dependability, Drive and determination, Ingenuity, Initiative, Integrity, Loyalty, Maturity, Tenacity, Verbal expression and Ability to express oneself clearly and concisely in writing.

Demonstrated Performance Qualities include: Professional knowledge, Administrative ability, Responsibility for staff development, Foresight, Delegation, Motivation, Morale and Control.

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