Employee appraisal methods are a tricky and complex aspect of HR (Human Resources) and business management. Many methods can be used, but with the ever changing nature of work, and with significant differences between the Baby Boomer generation and Gen Y / Z, few methods work well.
Some experts argue the Employee Performance Review should be abolished altogether.
In this article, we’ll outline four methods that can be considered templates to which the employer can refine for maximum fairness and accuracy.
Also consider doing performance appraisals that float up the chain of command as well as down. This means that employees and junior managers get the opportunity to evaluate their bosses as much as the bosses evaluate them.
Evaluating the Evaluation
Keeping in mind people are a company’s greatest asset and resource, the purpose of doing an evaluation at all is to 1) provide reliable information to employers as to the performance of employees and 2) give employees an insight as to how they are perceived in the company. The nature of the scales, measures, and variables are the basis of the different methods.
The Unstructured Format
The unstructured format is a common method where evaluators use an essay or short answer to grade employees. The benefit here is that any and all variables are used, from the most quantitative to the most informal. This is similar to the “essay” format, where appraisals are done through a free form writing of an essay which tries to capture all aspects of employee performance.
Ultimately, all unstructured appraisals are meant to be open ended and all encompassing.
The Ranking System
The ranking system is a more structured approach, where specific performance variables are laid out. A ranking system of any kind must have explicit variables that employers can refer to.
Examples of this might include revenue generated, overtime hours, ability to work with a group or overall attitude.
The purpose here is to provide a quantitative score in areas that are not necessary quantitative, such as “general attitude.” The purpose is to show which employees are performing well relative to a set of variables that an employer finds the most important.
The 360 Approach
The “360 Approach” appraisal system is not just for employers, but is used by and for all employees and managers of a firm. Most appraisal methods are designed using variables that employers find significant, such as total revenue generated.
The 360 approach uses standards that other employees might find important.
In this case, appraisal comes from the overall function of the department, such as sales, rather than just what a boss might find useful. Employees are considered as part of a structure that functions only if all employees are on the same page and work together well.
The Mixed Standard Method
The “mixed standard” deals with complex variables. This is because variables used in employee performance run the gamut from those which can be expressed solely by numbers and those that are more abstract—such as attitude—but cannot easily be translated into quantitative measures.
While some employers might only care about cash generated, others might want a tightly structured office that requires many variables of different types. This is the domain of the mixed standard. It uses some open ended techniques, but also uses quantitative ranking standards in a mix that is useful to employers who want a smoothly running office.
The Mixed Standard isn’t recommended for employees who regularly telecommute. Instead, they should be measured mostly on objective outputs, such as number and type of projects completed or expert evaluations of project quality.
What will work for a specific firm depends on what the owners or managers find important. Certain high tech firms will be concerned more with precision work than attitudinal measures.
In this case, a more formal and structured format will be required.
In legal firms, for example, things like dealing with clients will be important, and therefore more attitudinal issues will be stressed. The environment itself will dictate what variables are important and which can be largely ignored.
Antariksa, Yodhia. “Performance Appraisal Methods.” Exploring HR Management (explorehr.org/articles/Performance_Appraisal/Performance_Appraisal_Methods.html)
McNamara, Carter. “Basics of Conducting Employee Performance Appraisals.” The Free Management Library. (managementhelp.org/emp_perf/perf_rvw/basics.htm)
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