According to Michael D. Haberman, Consultant and owner at Omega HR Consulting,
“People cannot improve if they are not receiving feedback and allowed to make corrections.”
Performance appraisal aims at a critical analysis of the overall performance of employees over a specific period. It is crucial for boosting employee productivity and ensuring improvement for both the employees and the company.
Here are the top best performance appraisal methods for HR leaders:
360 – Degree Feedback:
This method has a multifaceted approach. It involves the evaluation of employees based on managerial assessments as well as client and peer reviews. It is a comprehensive method that gives a complete and detailed picture of any employee’s overall performance.
Assessment Centre Method:
In this method, employees are placed in certain social situations. They are exposed to different social exercises which require the handling of roles and responsibilities. One of the most significant things about this method is that, apart from evaluating the existing skills, it also predicts the future performances of employees.
Behaviourally Anchored Rating Scale (BARS):
This method compares employee performance with particular instances of behavior linked to specific numerical ratings. Various scales are evaluated by numerous BARS statements to assess the employee traits. Employees are marked ‘good’, ‘average’, or ‘poor’ based on their behaviors and overall performances.
Critical Incident Method:
This method evaluates an employee based on his or her performance when exposed to specific events known as ‘critical incidents’. The employee can attain great success or fail miserably in properly carrying out the given responsibility. The important insights into employee performance are maintained throughout the process in both the digital and physical formats.
Human Resource (Cost) Accounting Method:
This method analyses an employee’s performance in terms of the revenue that the company generates from his or her contribution. Here, the economic value of an employee is assessed by comparing the cost to the company with the financial benefits that the company has received from that particular employee.
Management of Objectives (MBO):
Under this appraisal method, certain goals are identified by managers. Then, the manager and the employee talk about how the goals can be achieved, and together, they work on measuring the progress. This method relies on the SMART technique confirming that the objective is Specific, Measurable, Achievable, Realistic, and Time-sensitive.
This method helps managers to bring out the latent potential of the employees. Trained and qualified psychologists conduct assessments to evaluate the employee’s cognitive abilities, interpersonal skills, leadership skills, intellectual traits, emotional quotient, personality traits, and other associated skills. Rather than focusing on the past work, the future performance of the employee is predicted.
Technological Performance Appraisals:
This method is applicable only in certain sectors of the organization since it assesses only the technical performance of an employee. This performance is best when applied to the technical wing of an organization. Here, the focus is on the specific skill sets of an employee. Therefore, this method is more focused and objective in approach than all the others mentioned above.