Modern Performance Appraisal Methods For Your Business
Performance appraisals have existed in one form or another for decades. They have become more formal over time and, for years, the same methods that were originally developed worked. In today’s workplace, however, the types of jobs being performed are different than ever before. In addition, many people don’t work onsite but work from home, coming in only occasionally or not at all. New methods had to be developed that would accurately assess work performance.
How Are Performance Appraisals Used?
Work appraisals are mainly used in order to evaluate an employee’s overall performance. This is necessary so that a supervisor can determine who is best suited for which positions, who may be struggling and need help, and which employees are either beneficial or problematic for the company.
To Assess Workforce In A Systematic Way
A good performance appraisal must be able to assess each employee in a systematic way that stays constant across the board. Only in this way can employees be fairly evaluated. Taking into account more than just whether an employee does his or her job or not allows management to make better decisions regarding the company as a whole. Today’s workers are not merely placeholders but important parts of the entire system that allows a business to succeed or fail.
Benefits Of Accurate Appraisals
Accurate appraisals help with many different things in addition to whether a job is being performed. Here are some of the ways these evaluations can be of help to company managers.
Giving Out Work Promotions
Sometimes the person who is most suited for a promotion is obvious and at other times, the choice isn’t as clear. Appraisals can help managers make that type of a decision, especially if they consider appraisals that have taken place over time.
Employee Training And Development Techniques
Performance appraisals can be an indicator of whether or not training methods are working as they should. Are employees doing better or worse since a new method was put into place? Knowing if training methods are working or if they need to be changed in some way can be found when appraisals are reviewed as a group.
Reviewing Compensation Rates
Employees won’t stick around long if they don’t get periodic raises. If they do stay, their efforts may not be as positive as if they expected to receive a reward. Regular performance appraisals allow managers to decide if an employee deserves a pay raise or if they should remain at their current pay level. Basing compensation on evaluation results will often create less of an issue than simply denying the raise.
Assessing Employee Communication
When appraisal methods also include employee-given information, managers get to see the employee’s point of view. This helps them determine whether or not communication has been positive between management and employees. Good communication is one of the most important elements of a positive work environment and being able to assess the effectiveness of this communication can make the environment a successful one.
Most Common Traditional Appraisal Methods
There are several types of performance appraisals that have been used for many years by companies. They vary greatly in style and effectiveness. Whichever method you choose, you need to be consistent in applying them and make sure your managers and supervisors understand how to properly administer each.
In the Paired Comparison method, an employee and job are compared with each other employee and job. Employee comparisons are performed usually on the basis of overall performance.
This method assesses the degree of certain qualities required for the job such as reliability and dependability. The degree is usually measured on a scale (excellent, very good, good, average, poor). Then the actual performance is of each employee is allocated the grade which best describes his/her performance.
Forced Distribution Method
The forced distribution method is one in which the rater has to make a forced choice between the available characteristics, about the employees. It is in the form of a survey questionnaire. Different performance categories are set and the rater is given a set of multiple-choice questions they must choose from.
Graphic Rating Scale Method
This is a commonly used method, It assesses a person on the quality and quantity of their work divided into a number of factors. These factors can be categorized as employee characteristics and employee contributions.
Confidential report is the method of evaluating employee’s performance and taking necessary actions without giving any feedback to the employees. This method should only be viewed by authorized personnel.
Past Performance Appraisal Methods
Past performance appraisal methods focus simply on what has taken place. They are designed to measure the performance of one individual and are more focused on how things have been done rather than how they can be improved. These methods include the following.
These are the basic scales that measure qualities like dependability and performance by a numerical value that is normally set from one to ten. This type of evaluation is easy to do, can make it less time-consuming to evaluate a large number of employees and doesn’t take a lot of training to perform. Unfortunately, this type of evaluation can be biased by the opinion of the evaluator.
This evaluation consists of a series of yes and no questions that the evaluator checks off. This is both quick and easy and the HR department is the one who normally finalizes the evaluation. However, this method is subject to evaluator bias and there is no room to make notes or fine-tune objects. For example, a person who is always late but in attendance every day will get the same rating on dependability as someone who arrives on time each day unless there are separate categories for punctuality and attendance.
Forced Choice Method
In this type of evaluation, the evaluator picks the best of normally four statements that answer a question regarding the person being evaluated. This type of evaluation helps avoid evaluator’s bias as a choice is required to be made, but the evaluator may, in the end, have to choose the best answer among four irrelevant statements regarding a particular employee.
Critical Incidents Method
This evaluation method is focused on individual incidents that help determine the employee’s behavior based on things that are critical to the job. This method allows the supervisor to make notes regarding the incident and allows for giving feedback to the employee in question. The downside of this method is that focus may only be on poor performance and the employee may feel he is being reprimanded rather than being given a chance to improve.
Behaviorally Anchored Rating Scales
The mood and behavior of an employee are evaluated in regard to performance, such as whether they perform willingly, hesitantly, etc. This can evaluate the overall attitude of an employee, which can aid in evaluating performance but it is also subject to the evaluator’s bias and overall judgment.
Performance Tests And Observations
Actual written and performance tests help eliminate bias on the part of the evaluator. They cost more to develop and training to administer requires some time. These tests can show what an employee is capable of doing in regards to the job but they tell more about capability than actual performance.
In this method, the evaluator writes essay-type answers to questions regarding employee behavior and performance. This allows for individualization of evaluations. Problems can arise if the evaluator is not adept at putting thoughts in words and evaluator bias may be an issue.
Need For Modern Appraisal Methods
The old evaluation methods were meant to be used in an environment where many people in business performed identical tasks. Factory jobs were the norm when most were developed and many of the ways a person got ahead involved having the type of personality that won over the higher-ups in the business. Today’s workplace tasks are much more diversified and new evaluation methods need to be considered.
Weighs Job Achievements Over Personality Traits
The newer performance appraisal methods take an expanded look at what an employee achieves, regardless of the employee’s personality traits. This allows a much more unbiased approach to giving promotions and pay raises and allows those who actually work the hardest to get ahead.
To Overcome The Flaws Of The Past
Business owners and managers often get frustrated when performance appraisals don’t result in improved work performance or growth for their employees. If you are finding this to be the case, it may very well be an indicator that the type of performance appraisal you are using is not the right one.
A List Of Modern Employee Performance Evaluations
Let’s take a look at more modern appraisal methods that are making their way into businesses of all types.
Assessment Center Method
In this method, an employee is tested not only job capability but also social interaction skills. The employee is given a combination of written tests for evaluating ability and role-playing scenarios to see how the employee will react to different situations that are a normal part of their position. The evaluation is done by a team of supervisors and a written report is made to share with the employee.
Human Resource Accounting Method
This method is based on how much money the employee is worth to the company. The HR department takes into account how much it costs to pay the employee and train him. It then determines how much net income can be expected from the employee for the company. The difference between the two amounts gives a monetary value to the employee.
Behaviorally Anchored Rating Scale (BARS)
This method breaks down a job into what behaviors are needed by an employee. The individual employee is then rated on the scale method to determine where they rate on behavior characteristics necessary to succeed.
Management By Objectives (MBO)
In this method, employees sit down with management and create personal goals that will help them achieve success in the company. Time limits are put in place and periodic evaluations are given to see if the goals have been met, or are on track to be met. Readjustments can then be made to keep the goals as the focal point.
Psychological Appraisal Method Of Performance Appraisal
This evaluation is conducted by a psychologist and is mostly focused on what an employee is capable of doing. Based on psychological tests, interviews with the employee and supervisor and observation of the psychologist, this evaluation shows the promise of an employee regardless of past performance.
This evaluation is done by combining appraisals from the supervisors, co-workers, and employees. All the appraisals are combined to give the company and employee a complete appraisal of their performance and behavior in an unbiased way that takes into account everyone affected by the employee’s performance.
This evaluation takes the 360-degree evaluation even further. In this appraisal method, anyone who comes into contact with the employee, including outsiders such as clients or customers is given the opportunity for input. In this way, the employee and supervisors are able to get a complete picture of the individual’s strengths and weaknesses. This helps an employee improve on areas where it is necessary and allows supervisors to know where the strengths of each employee lie and how that employee’s skills can best be utilized.
Performance appraisals are incredibly important to both businesses and employees. It gives employees a plan for improvement and it gives businesses the opportunity to train and evaluate their employees. Companies need to be careful when selecting which style of performance appraisals they use. Performance appraisals need to provide value to both the company and the employees as they are ultimately a tool for improving performance and providing growth opportunities.
This blog post is intended for informational purposes only and does not constitute legal advice. No attorney-client relationship is created between the author and reader of this blog post, and its content should not be relied upon as legal advice. Readers are urged to consult legal counsel when seeking legal advice.