Modern Methods of Performance Appraisal


Management by Objectives:


Management by objectives means leading through goals. First the organizational goals are defined then individual goals are set for all the employees in this method. The evaluation of employees is based on their achievement of individual goals. The performance of the employees are measured and compared with the expected performance to appraise them.

Assessment Centre:


This method is used to evaluate interpersonal, planning and organizing skills by organizing several activities for the employees by the management. Assessment center is the place where these activities (like social events, assignments, business games and hypothetical situational role plays) take place. This method help evaluate whether an employee needs further training and development or not or whether he’s ready for a new higher position or not.

Human Resource Accounting Method:


HR accounting method helps the company find out the net monetary contribution of an employee to the company. In this method, first the expenses incurred on the employee are calculated by adding the expenses like his salary, compensation, cost of recruitment, training and development. Then, his monetary contribution to the company is found out. The contribution of an employee is calculated by finding the difference between contribution and cost of employee. The employee will be appraised depending on the contribution.

Behaviorally Anchored Rating Scale:


This method appraises the employees depending on the job related behavior. At any designation, employees are expected to behave a certain way and companies have a standard procedure to behave in a certain way with their customers. The behaviors of employees are compared with the standard behaviors rated on the scale for an evaluation. So if the employee follows the procedure, he will be evaluated high and if he doesn’t follow the procedure he will be evaluated low on behaviorally anchored rating scale.

Let us understand this through an example, if a customer visits your store and the company representative attends the customer well, explains all the policies on returns and defective merchandise and encourages him to visit again. Then this representative will get an outstanding rating on the behaviorally anchored rating scale. Similarly, if some of the behaviors are missing or lacking, the employee will get an average rating. And if the employee is rude and behaving arrogantly to the customer, he will receive an unsatisfactory rating on the scale.

360 Degree Performance Appraisal:


This method of performance appraisal is more transparent and participative. In this method, different people who interact with the employee within the organization are asked to appraise the performance of an employee. Anyone who is in contact with the employee can be a part of this appraisal process. Apart from other people, the employee himself reviews his performance which makes this method more unique and effective. The parties that are normally involved in this 360 degree performance appraisal are top level management employees, seniors, peer group, subordinates, customers and the employee himself. Feedbacks about the employees’ performance are collected through a standard questionnaire. Employee also answers the same questionnaire and reviews his performance. Depending on all the collected feedbacks, the employee is appraised positively or negatively.

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