Types of Performance Appraisal

Self- evaluation method

A self-evaluation requires an employee to judge his or her own performance against
predetermined criteria. Usually, the self-evaluation is taken into consideration during an official
performance review to allow for a more thorough discussion and to ensure employees understand
how they will be judged. The self-evaluation may be too subjective to truly reflect work
performance, as employees may rate themselves too high—or too low—but the discrepancies
between employee and employer evaluations can be insightful. 
Behaviorally Anchored rating scale (BARS)
In a ranking method system (also called stack ranking), employees in a particular department are
ranked based on their value to the manager or supervisor. This system is a comparative method
for performance evaluations. The manager will have a list of all employees and will first choose
the most valuable employee and put that name at the top. Then he or she will choose the least
valuable employee and put that name at the bottom of the list. With the remaining employees,
this process would be repeated. Obviously, there is room for bias with this method, and it may
not work well in a larger organization, where managers may not interact with each employee on
a day-to-day basis.
To make this type of evaluation most valuable (and legal), each supervisor should use the same
criteria to rank each individual. Otherwise, if criteria are not clearly developed, validity and halo
effects could be present. The Roper v. Exxon Corp case illustrates the need for clear guidelines
when using a ranking system. At Exxon, the legal department attorneys were annually evaluated
and then ranked based on input from attorneys, supervisors, and clients. Based on the feedback,
each attorney for Exxon was ranked based on their relative contribution and performance. Each
attorney was given a group percentile rank (i.e., 99 percent was the best-performing attorney).
When Roper was in the bottom 10 percent for three years and was informed of his separation
with the company, he filed an age discrimination lawsuit. The courts found no correlation
between age and the lowest-ranking individuals, and because Exxon had a set of established
ranking criteria, they won the case (Grote, 2005).
Another consideration is the effect on employee morale should the rankings be made public. If
they are not made public, morale issues may still exist, as the perception might be that
management has “secret” documents.

The 360 degree approach

As the name suggests, a 360-degree feedback review provides a comprehensive look at
an employee’s performance by pulling feedback from outside sources. The employee and his or
her manager will still complete an assessment of the employee’s work performance and technical
skill set, but this review method also includes feedback from peers, direct reports, and/or non-
direct supervisors with whom the employee works regularly. Additionally, 360-degree feedback
reviews can include an evaluation of the employee’s character and leadership skills.

Management by Objective (MBO)

Management by objectives (MBOs) is a concept developed by Peter Drucker in his 1954
book The Practice of Management (Drucker, 2006). This method is results oriented and similar
to the work standards approach, with a few differences. First, the manager and employee sit
down together and develop objectives for the time period. Then when it is time for the
performance evaluation, the manager and employee sit down to review the goals that were set
and determine whether they were met. The advantage of this is the open communication between
the manager and the employee. The employee also has “buy-in” since he or she helped set the
goals, and the evaluation can be used as a method for further skill development. This method is
best applied for positions that are not routine and require a higher level of thinking to perform
the job. To be efficient at MBOs, the managers and employee should be able to write strong
objectives. To write objectives, they should be SMART (Doran, 1981):
Specific. There should be one key result for each MBO. What is the result that should be
achieved?
Measurable. At the end of the time period, it should be clear if the goal was met or not. Usually
a number can be attached to an objective to make it measurable, for example “sell $1,000,000 of
new business in the third quarter.”
Attainable. The objective should not be impossible to attain. It should be challenging, but not
impossible.
Result oriented. The objective should be tied to the company’s mission and values. Once the
objective is made, it should make a difference in the organization as a whole.
Time limited. The objective should have a reasonable time to be accomplished, but not too
much time.

As this article indicates, the management by objectives (MBO) performance appraisal

method is a more modern approach to performance reviews, because it ropes the employee into
the goal-setting process. With this method, the manager and his or her employee will “agree
upon specific, obtainable objectives with a set deadline.” Unlike subjective evaluations, the
MBO method makes it easy to define success and failure.
Forced Distribution
The forced distribution method of performance appraisal derives its name from the
fact that those responsible for providing evaluations, the raters, are “forced” to distribute ratings
for the individuals being evaluated into a “pre-specified” performance distribution.
FDM is an appraisal method for employees which can be characterized as an assessment strategy
where chiefs/HRs/managers are required to convey appraisals for those being assessed, into a
pre-indicated performance rank. In principle, each positioning will enhance the nature of the
workforce.
It requires the head to survey every employee in light of certain pre-decided parameters, and
from that point, rank them into 3 base classes. The representatives basically fall into different
categories including phenomenal, great or poor, which can be extended by the association to a 5-
point scale too.
Forced distribution method is a framework that is utilized largely throughout the world by
organizations to assess their workforce. It was first presented by General Electric in 1980s, amid
the period of Jack Welch who was scandalous for chopping down GE’s workforce frequently by
terminating the low performers.

Graphic Rating scale

A ratings scale—or grading system—is probably the most commonly used performance
review method. This method is based on a set of employer-developed criteria—which can
include behaviors, traits, competencies, or completed projects—against which employees are
judged. The employer assigns each criterion a numerical value, usually on a ten- or five-point
scale. A word of caution to employers using this method: be sure your employees fully
understand where success and failure fall on the scale. Some employees will consider a three-
out-of-five to be merely average, but you may consider it to be above satisfactory. So, be sure to
properly set expectations, especially if you require a self-evaluation.
Critical incident method
This method of appraisal, while more time-consuming for the manager, can be effective at
providing specific examples of behavior. With a critical incident appraisal, the manager records
examples of the employee’s effective and ineffective behavior during the time period between
evaluations, which is in the behavioral category. When it is time for the employee to be
reviewed, the manager will pull out this file and formally record the incidents that occurred over
the time period. The disadvantage of this method is the tendency to record only negative
incidents instead of postive ones. However, this method can work well if the manager has the
proper training to record incidents (perhaps by keeping a weekly diary) in a fair manner. This
approach can also work well when specific jobs vary greatly from week to week, unlike, for
example, a factory worker who routinely performs the same weekly tasks.

The Critical Incident Method of Performance Appraisal is defined by the Usability Body of
Knowledge as a “method of gathering facts (incidents) from domain experts or less experienced
users of the existing system to gain knowledge of how to improve the performance of the
individuals involved.”
Paired comparison analysis
Paired Comparison Method is a handy tool for decision making; it describes values and
compares them to each other. It’s often difficult to choose the best option when you have
different ones that are far apart.
All the potential options are compared visually, leading to an overview that immediately shows
the right decision. This makes it possible to compare the relative importance of opposing criteria
in a simple way. If there is no objective data available for making the decision, Paired
Comparison Method can be a very handy tool. This method is also known as the Paired
Comparison Method and Pairwise Comparison.

Ranking
Ito po yung oldest and simplest na formal systematic method of
performance appraisal in which employee is compared with all others
for the purpose of placing order of worth. So yung employees po ay
nirarank from the highest to the lowest or from the best to the worst.
If there are ten employees to be appraised, then there will be ten ranks
from 1 to 10.
Pero meron pong limitation ang appraisal method na to.
(i) It doesn't say how much better or worse one is than the other.

(ii) The task of ranking individuals is difficult when a large number of

employees are rated, and

(iii) It is very difficult to compare one individual with others having

varying behavioural traits. To remedy these defects, the paired
comparison method of performance appraisal has been evolved.

Essay method
Essay method is the simplest one among various appraisal methods
available. In this method, the rater writes a narrative description on an
employee’s strengths, weaknesses, past performance, potential and
suggestions for improvement. So hindi daw po kelangan ng complex
format at ng extensive o specific training para dito. The appraiser
makes a free form, open-ended appraisal of an employee in his own
words and puts down his impressions about the employee.

He usually considers following factors:

(i) Relations with fellow supervisors and personnel assigned.
(ii) General organization and planning ability
(iii) Job knowledge and potential
(iv) Employee characteristics and attitudes
(v) Understanding and application of company policies and
procedures.
(vi) Production, quality and cost control
(vii) Physical condition; and
(viii) Development needs for future.

So dahil nga po yung essay method ay descriptive, the method

provides only qualitative information about the employee. In the
absence of quantitative data, the evaluation suffers from subjectivity
problem. Pero yung essay method naman daw po is a good start and is
beneficial also if used in conjunction with other appraisal methods.
Advantage:
Can easily provide feedback on the positive abilities of the employees

Disadvantage:
Subjective
Writing ability of reviewer impacts validity
Time consuming

Specificity: This measure is the extent to which the performance measure gives particular

guidance to employees about the organisation's expectations and the ways to meet them. This
measure is appropriate to both the strategic and developmental purposes of performance
management.

Providing timely employee feedback will improve the customer experience along with the performance of
your contact center or back-office operating department. 

If performance appraisals are done in the correct manner, they can provide us with a series of valuable
results. However, done incorrectly, the process of evaluating employee performance can actually lead to
lower levels of job satisfaction and productivity. In this section, let’s discuss three major reasons why
organizations complete performance evaluations—communicating, decision making, and motivating.

Positive reinforcement is a reward for doing something well.

Negative reinforcement is a penalty for not doing something. 

Extinction is a neutral response designed to stop a learned behavior. For

example, you might stop approving overtime pay -- a positive
reinforcement during the busy season -- to discourage employees from
staying late or coming in on the weekends. 

Meaningfulness comes from contributing to something worthwhile, feeling valuable and

valued, feeling able to give to, and receive from one's work, and feeling able to give and
receive from others in the course of work.