HRM Employee performance appraisals are an important part of employee development and performance. Employees who are rewarded for their performance based on thoughtful performance review comments are more likely to stay loyal and perform better each year.  It is crucial to evaluate employee performance objectively and fairly. We will be discussing traditional performance appraisal methods in greater detail today.

Traditional Performance Appraisal Methods

Traditional methods of performance appraisals in HRM focus on the ability of employees to take initiative, use resources and execute tasks with creativity and innovation.

Rating Scales Method

This is an old method of performance appraisal. This performance appraisal method uses a rating system that ranges from 1-10. This performance appraisal method measures employees’ performance against several factors, including their attitude, timeliness, efficiency, interpersonal skills, and other factors.

The ranking method is possibly one of the oldest HRM employee performance appraisal methods. Essentially, this places them in order of the most to the least productive.

It is implemented in different variations, and each variation has its own benefits. Take a look: 

  • It is simple and quick to accomplish. 
  • It is a less time-consuming process.  
  • It yields a numerical rating for the employees, which can be directly linked to compensation adjustments or staffing concerns. 
  • Individual attributes and skills differ. This method does not take behavior and such factors into account.

A low rating means that an employee received negative feedback.

It is useful for:

Rating HRM scales are a powerful appraisal tool for assessing the unique characteristics and behaviours of your workforce.

Pros:

  • This tool helps you to assess the employee’s attributes and their relationship with your current job.
  • It is useful for comparing employees.
  • Assesses salary adjustments.
  • It is useful in evaluating candidates for promotion.

Cons:

  • All responses are subject to interpretation.
  • Sometimes, the final rating is misleading.
  • It can be hard to interpret average results.
  • Recent events may influence the answers.
  • Avoid asking subjective questions.
  • Set clear criteria and expectations.
  • Be specific about the questions you ask.

An Interesting Fact

The Scott Company introduced rating scales in 1910. By 1920, they were already used.

Method of the Checklist

The Checklist is one of the most HRM traditional methods for performance appraisal. The manager must answer all questions in the checklist, which may include questions about employees’ job performance and behaviour.

The manager will analyse the question and answer the employee based on their assessment of the employee. The numerical value assigned to each question in the checklist is based on how important they are for job performance. The appraisal score is determined by adding all the individual factors together.

A checklist might include a question like “Is the employee helpful for other team members?” This question could have a numerical value between 5 and 5. If an employee has been very helpful to their team they will get a score of 5; if they aren’t, the manager may give them a score of 1 or zero.

It is useful for:

Employee performance can be easily evaluated by their supervisors. They only have to choose between yes/no.

Pros:

  • Helps managers avoid discrimination.
  • Clearness of the evaluation criteria is ensured
  • This provides a unified view of the performance.

Cons:

  • It doesn’t allow for elaborate explanations.
  • Time-consuming process.
  • It is expensive to prepare.
  • It is easy to forget important factors of evaluation.

Here are some tips to help you get started:

  1. Focus on objective questions that can only be answered in a yes/no format.
  2. Avoid asking too many questions, as this can lead to a long and tedious process.
  3. Be careful not to include too many negative statements.

An Interesting Fact

Mosher and other experts believe that the checklist was used in the first American library collection evaluation, which was published in 1849.

Method of Forced Distribution

It is useful for:

Establishing a clear separation between all employees in the company.

Pros:

  • It is helpful in eliminating the leniency from the appraiser.
  • Highlights future front-line leaders
  • It is relatively simple to understand and apply.

Cons:

  • High-performing employees who are introverts will not find it useful.
  • Encourages discrimination among employees.
  • Limited categories of evaluation can have a negative effect on innovative employees

Here are some tips to help you get started:

  • The HRM department should communicate all guidelines to appraisers in a clear manner. Appraisers cannot appraise employees at will; they must follow certain guidelines.
  • Business must calibrate their performance in order to attain internal equality.

An Interesting Fact

General Electric introduced the forced distribution method in 1980.

Critical Incident Performance Evaluation Method

There are a variety of ways to gather data and analyse it. Critical incident techniques involve the observation of critical human behaviours, capabilities, and on-the job situations.

Confidential Report System

Mostly, public organizations or secret agencies employ this technique in their appraisal process. As suggested by the name, Confidential Report System involves handing over the employee’s appraisal to senior-level management in sealed envelopes. These envelopes include their performance detail in a certain time frame.

Confidential Report System ensures that employees do not see their rating or predict their future incremental growth changes.

Checklist Method

The reason is its convenience, objectivity, and time-saving process. According to this method, managers are provided with a standard checklist or questionnaire to fill in. 

On the other side of the coin, this method has its own limitations. Its biggest drawback is that its not subjective enough to be efficiently applicable in corporate organizations.

Essay Appraisal

Let’s look at the advantages associated with Essay Appraisal: 

  • This method strategy provides supervisors with freedom of expression and critical analysis.
     

Some of the downsides associated with essay appraisal are: 

  • If the team is large, this method may not have the required insights to form accurate opinions on which to base actions.  

Paired Comparison

This method involves comparing employees against each other, meaning one-on-one. This method traditionally selects a particular trait on which to focus. The process is quite simple. Management by Objectives (MBO)

  1. In the simplest terms in HRM, Management by Objectives is a method of creating an objective set of goals. The manager does this in collaboration with employees. MBO is one of the most sought-after and commonly implemented performance appraisal methods. There are four main parts to this employee performance appraisal method: 
    • Goal Setting: The manager and employee figure out what goals they must set. Performance Standard: This is the standard that determines what is required to meet these goals. 
    • Comparison: A comparison is drawn between when the goals were set and a predetermined point in time, for example, three or six months down the line. Managers and employees can see what changes have come about. 
    • Periodic Review: This is where the employees and managers discuss the employee’s development. 

    Merits: 

    • Appraisals can be more fair, detailed, and equitable because MBO emphasizes quantifiable goals. 
    • It raises employee awareness of the company’s objectives. The majority of the time, employees are concerned with their own goals and the environment in which they operate. However, with MBO, they are proud to be a part of the organization’s aims. This boosts their motivation and dedication. 
    • MBO frequently reveals areas where employees require additional training, resulting in career advancement. 

    Demerits: 

    • Another fact is that it takes time and effort to ensure its correct implementation. It is also likely that every role will need an MBO explicitly designed.

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