Methods of Employee Performance Evaluation
An employee's contribution to an organization depends on his
/ her rating. Having an accurate and unbiased assessment is essential to
measure employee contribution to the organization’s objectives. Employers and
managers use traits such as knowledge of a particular field, skills to achieve
a goal, and attitude to achieve goals to determine an employee's level of
performance (Shaout and Yousif, 2014). Organizations use a variety of
performance appraisal methods to collaborate to achieve their lined goals and it
has advantages and disadvantages (Alain, 2013).
Two types of measurements are used in assessing performance. These are directly measurable objective measurements and non-quantitative subjective measurements (Aggarwal and Thakur, 2013). An organization has multiple performance appraisal methods to evaluate and measure the performance of its employees and set future goals for them. According to Shaout and Yousif (2014), performance review methods are divided into two categories. Those are Traditional methods and modern methods.
Table 1.0: Performance Appraisal Methods
|
Performance Appraisal Methods |
|
|
Traditional Methods |
Modern Methods |
|
Ranking
method |
Management
by Objective (MBO) |
|
Paired Comparison |
360-
Degree Feedback |
|
Graphic Rating
Scale |
Assessment
Center Method |
|
Checklist
Method |
Behaviorally
Anchored Rating Scale (BARS) |
|
Essay
evaluation Method |
Psychological
Appraisals |
Traditional methods are relatively
old methods of evaluating performance. These methods were past-oriented
approaches that focused solely on past performance (Shaout and Yousif, 2014). These
are based on personal qualities such as knowledge, ability, judgment,
initiative, attitude, loyalty, leadership, and judgment (Dessler, 2015).
Traditional methods are relatively
old methods of evaluating performance. These methods were past-oriented
approaches that focused solely on past performance (Shaout and Yousif, 2014). These
are based on personal qualities such as knowledge, ability, judgment,
initiative, attitude, loyalty, leadership, and judgment (Dessler, 2015).
The most common technique in the Absolute Standards group is
some kind of checklist. Checklists are more behaviorally based than graphic
rating scales or other employee-comparison methods. There are also more
detailed procedures, such as weight and power selection checklists. Specific
weights are assigned to a list of work behaviors in the weighted checklist. A
compulsory selection checklist consists of two to five response items, each of
which is associated with high- and low-performance employees. The result is a
single numerical ranking that is useful for individual decisions such as
salaries and promotions (Lunenburg, 2012). This is the simplest strategy for
assessing employee performance. Under this, the HR Manager prepares a checklist
and gives it to the scorer. The checklist will include queries (describing the
employee's behavior and performance) and should be answered with a 'yes' or
'no' structure only (Rothwell, 2012).
Paired Comparison
This method overcomes the problem of the difference between
subordinates in the middle range of distribution. Under paired comparisons,
graders compare only two subordinates at a time until all two-way comparisons
are made between all employees. After grading all pairs, the manager can rank
the subordinates by counting the number of times each employee has been judged
superior (Randhawa, 2007). This method follows the example of pairs, where
employee-to-employee values are compared to each other. The formula is used to
calculate the number of comparisons (N x (N-1) / 2). When you have a variety of
options that are markedly reserved, deciding on the best option is often
challenging (Venclova, Salková and Kolackova, 2013).
Graphic rating scale
A graphic
grading scale, a behavioral method, is perhaps the most popular choice for
performance evaluation. This type of evaluation lists the characteristics
required for the task and asks the source to evaluate the individual on each
attribute. This strategy surveys the level of specific characteristics required
for the activity, for example, unwavering quality and consistency. The degree
is usually about credibility and credibility. The degree is usually estimated
on a scale (excellent, good, average, poor). An employee is evaluated according
to these grades and assigned to a level that best describes their performance
(Mathis and Jackson, 2012).
Easy evaluation method
The essay method requires a manager to write a short essay
describing the performance of each employee during the grading period. The
grader usually categorizes ideas under a few general topics. The writing style
gives the grader more flexibility than other methods. The effectiveness of the
essay approach often depends on the supervisor's writing skills. Some
supervisors do not express themselves well in writing and as a result have poor
descriptions of employee performance, while others have excellent writing
skills and can evoke high positive emotions (Mathis and Jackson, 2012).
Modern methods have been developed to improve the traditional
methods. It seeks to reinforce the shortcomings of the old ways, such as
originality and subjectivity. The following describes the typical modern
methods (Goel, 2012).
First, the manager and employee sit down together and set
goals for the period. When it comes time to evaluate performance, the manager
and employee sit down and review the goals and determine if they have been
achieved. The advantage here is open communication between manager and
employee. This system helps employees to better understand their goals and know
the quality and quantity required to deliver. This ratio is a reasonable
estimate because employees know the probability of measurement (Pathak, 2010).
Feedback on employee performance comes from corporate
hierarchies, subordinates, and managers, as well as self-assessment and
sometimes external sources such as clients and suppliers or other interested
stakeholders. ‘360’ is 360 degrees in a circle. The person receiving the
feedback plans the training and development process (Manoharan, Muralidharan,
and Deshmukh, 2009).
Assessment center method
An Evaluation Center is a central place where trained
observers can join managers to evaluate their participation in job-related
exercises. It focuses on spatial exercises such as planning organizational
ability, self-confidence, stress resistance, strength level, and
decision-making ability. It provides the employer with an understanding of the
employee's personality (Shaout and Yousif, 2014).
Behaviorally Anchored
Rating Scale (BARS)
Smith and Kendall introduced the BARS system in 1963 to take
into account researchers' concerns about the reliability and validity of performance
appraisals. This method is more informative than simple letters. Scale points
are defined by the employee's required (effective or ineffective) behavior. The
personal rate employee appears to be more of an observer than a judge (Mathis
and Jackson, 2011).
Psychological
appraisals are the technology of obtaining information about an employee's
potential coverage. A method that focuses on the expected performance of employees
rather than past performance. The analysis is done through extensive
interviews, psychological tests, and other evaluative investigations. It pays
close attention to employees' emotions, intelligence, motivation, and other
personal characteristics that affect performance. Although the system is slow
and expensive, it will encourage talented young employees with significant
potential. The quality of the assessments depends on the skills of the
psychologist (Holpp, 2011).
An example from the company I work for:
The company I work for is an organization that provides packaging
solutions for the local and international markets. Over 150+ employees are working in the company. The organization used a mixed evaluation system to evaluate the
employee and will maintain continuous communication with general managers and
managers. Once employees have met their expectations, they are identified and
motivated each year through quarterly pay raises, promotions, evaluations, and
reward processes. Employee self-assessment, managers' evaluation, and peer
assessment under multiple rating feedback. An employee has full transparency in
the evaluation process and may not agree to any of the ratings received. Once
disagreed, the reassessment process will begin. This process will continue
until both parties are satisfied with the outcome.
References:
Alain, P. (2013) The Quick and Easy Performance Appraisal Phrase Book. 1st edn. USA: Career Press.
Dessler, G. (2013) Human Resource Management, 13th edn, Prentice-Hall.
Dessler, G. (2015) Fundamentals of human resource management. Pearson.
Goel, D. (2012) Performance appraisal and compensation management: A modern approach. PHI Learning Pvt. Ltd.
Holpp, L. (2011) Win-Win Performance Appraisals: What to Do Before, During, and After the Review to Get the Best Results for Yourself and Your Employees: What to Do Before, During and After the Review. 1st edn. USA: McGraw-Hill.
Lunenburg, F.C. (2012) Performance appraisal: Methods and rating errors. International journal of scholarly academic intellectual diversity, 14(1), pp.1-9.
Manoharan, T.R., Muralidharan, C. and Deshmukh, S.G. (2009) Employee Performance Appraisal Using Data Envelopment Analysis: A Case Study. Research & Practice in Human Resource Management, 17(1).
Mathis, R.L. and Jackson, J. H. (2012) Human resource management: Essential perspectives. Cengage Learning.
Pathak, H. (2010) Organizational change. Pearson Education India.
Randhawa, G. (2007) Human resource management. Atlantic Publishers & Dist.
Rothwell, J. (2012) Encyclopedia of human resource management set-3 volumes. 1st edn. New York: Wiley.
Shaout, A. and Yousif, M.K. (2014) Performance evaluation–Methods and techniques survey. International Journal of Computer and Information Technology, 3(5), pp.966-979.
Venclová, K., Salková, A. and Kolácková, G. (2013) Identification of employee performance appraisal methods in agricultural organizations. Journal of Competitiveness, 5(2).
I once studied about 360 degree feedback method. It is really a great method but it has its' own drawbacks.
ReplyDeleteDrawbacks which could arise at 360 degree method are interesting; as in the practical scenario that it was found when there was rewards such as bonuses are involved for these appraisals, feedback providers tend not to give honest, impartial or fair feedbacks and also the receivers being more aggressive towards the feedbacks they receive whereas in situations where their feedbacks are taken solely to provide career developmenet benefit for receivers (Hosain, 2016).
Hosain, S., 2016. 360 Degree Feedback as a Technique of Performance Appraisal: Does it Really Work?. Asian Business Review, 6(1).
Agreed with you Ruwini. But 360-degree feedback can become a powerful organizational intervention to increase awareness of the importance of aligning leader behavior, work unit results, and customer expectations, as well as increasing employee participation in leadership development and work unit effectiveness (London and Beatty, 1993).
DeleteEmployee performance assessment can be divided into two main categories as systematic and non-systematic assessment. Within the non-systematic assessment, an employee will be asset continuously by a superior throughout the work process (Alain, 2013). Systematic assessment is a set organizational method carried with a formal basis on employee presumed expectation, and actual performance (Lifflander and Pratt, 2015).On the other hand performance appraisal methods can be categorize under two methods, Traditional and Modern methods. Tradition method is a older method while including Raking method, Graphic Rating Scales, Critical incident methods and Narrative methods. whereas Modern methods of performance appraisal are Management by objective, Rating system, Humans resource accounting, Assessment center, 360 Degree and 760 Degree (Aggarwal and Thakur,2013).
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