Modern Performance Evaluation Methods
Modern Performance Evaluation Methods
Employee Performance Appraisal Methods
Employee performance appraisal is a systematic process for a company to evaluate and enhance employee productivity and increase their output. Usually, these appraisals are carried out on an annual basis where an employee’s performance is examined against a set goal. Further, it is used to analyze the strength and weaknesses of an employee and to measure how well the employee has executed on the job.
Performance appraisal assists an organization to determine the below facts:
- It gives the information to take necessary decisions in terms of Salary increments, and tangible and intangible benefits.
- It supports comparing the performance of subordinates and introducing changes and strategies where required.
- Being able to know about the employee’s skills and knowledge from his/her immediate supervisor.
- To prevent grievance and provide transparency among subordinates.
Many authors have elaborated the Categories of Performance Appraisal over a period of time:
Table: 1(Chand, n.d.)
The below discussion will display the 3 Modern Performance Appraisal Methods widely used by organizations
1. Management by Objectives (MBO)
MBO is an appraisal method, where the managers and subordinates work towards a common goal which is identified, planned, organized, and communicated to focus on a specific period of time. It is the superiors’ responsibility t periodically review the subordinates' progress toward achieving the set common goal.
The set common goal should be SMART:
- S – Specific
- M – Measurable
- A – Achievable
- R – Realistic
- T – Time-sensitive
MBO has 4 steps to it:
1. Goal Setting – Individual goals are set in order to attain the common goal of the organization
2. Performance Standard – Employees are being evaluated on the process of their set target against the specified time frame.
3. Comparison – Employees periodically review their performance against the set target and discuss on drawbacks to achieving the set target.
4. Feedback – Finally the employees get-together to evaluate their final performance within the set period and reward accordingly. And to evaluate areas to improve and set new targets and continue the process. (Anon., 2020)
Figure 2: Management by objective Process Chart (https://blog.hubspot.com/marketing/management-by-objectives)
2. 360-Degree Appraisal Method
This is an appraisal method where an employee’s performance is determined based on the views and reviews of his/her direct supervisors, Managers, Peers, and Customers. This enables the employer to assess the employees’ fullest competence in a holistic view.
This Appraisal method has 5 integral components:
1. Self-Appraisal – Employee gets an opportunity to assess themselves on their goal attainment
2. Managerial Reviews – Performance reviews conducted by Managers’ which include employee ratings and rewards.
3. Peer Reviews – Co-workers get a unique opportunity to express their insights about the employees’ performance and contribution individually as well as to the team.
4. Subordinate Appraising Managers – Evaluation done from a managerial point of view.
5. Customer / Client Reviews – Feedback can be gathered from Internal and External customers who dealt with the employee on a regular basis. (Anon., 2020)
3. Human Resource (COST) Account Method
The cost accounting method analyses the performance by means of financial income the employee has brought into the company against the cost of retaining the employee.
Retaining Costs would comprise of Financial Benefits, cost of training and development, etc. meantime financial benefits a company has yielded from the employee, from a Banks perspective, How Many Accounts, Personal Financial Services canvassed, Value of deposits canvassed, and so on.
Conclusion
In conclusion, performance appraisal is a clinical aspect in every industry since these appraisals decide their financial benefits which motivates the employee to contribute his fullest to the organization. (Anon., n.d.)
References
Anon., 2020. www.Kissflow.com. [Online] Available at: https://kissflow.com/hr/performance-management/employee-performance-appraisal-method/ [Accessed 24 April 2023].
Anon., n.d. www.shareyouressay.com. [Online] Available at: https://www.shareyouressays.com/knowledge/4-main-steps-involved-in-the-mbo-technique-of-performance-appraisal-to-improve-the-efficiency-of-your-organisation/94520 [Accessed 24 April 2023].
Chand, S., n.d. www.yourarticlelibrary.com. [Online] Available at: https://www.yourarticlelibrary.com/performance-appraisal/performance-appraisal-methods-traditional-and-modern-methods-with-example/35492 [Accessed 24 April 2023].
Most valuable contents: This blog post clearly defines categories of performance appraisal.
ReplyDeleteGood job, Praveen.
Good job Praveen. I would like to point out the 3 basic functions of the performance appraisal
ReplyDelete(1) to give each individual enough feedback on their performance;
(2) to serve as a foundation for behavior modification or change toward more productive working habits
(3) to provide information to managers so they can assess potential future job assignments.
Good topic, I get more knowledge about categories of performance appraisal.
ReplyDeletegood to read this comment. good work and good ecro
ReplyDeleteThis a great topic Praveen. I learnt a lot from your blog. Thank your for sharing your knowledge
ReplyDeleteThis is very important and essential topic.Thank you so much sharing thd knowledge here.Good work Praveen
ReplyDeleteGood theoretical content. Thanks for sharing.
ReplyDelete