Performance Appraisal in HRM - Students Explore

Performance Appraisal in HRM

Definition of Performance Appraisal

An employee performance appraisal system has outlined a process in which the organization compares actual performance and the personality of the employee to these expected standards. Predefined standards of factors, such as work knowledge, work performance, work attitude, leadership quality, team player behavior, consistency, and decision-making abilities, are created.

Meaning of Performance Appraisal

A regular evaluation of an employee’s performance is utilized in the organization to confirm their value to the business. It is also referred to as a performance evaluation or a yearly review. It assesses the employees’ abilities, development, success, or failure. The performance review is frequently cited as evidence for choices made regarding an employee’s termination, pay increase, bonus, or promotion.

Different Types of Employee Performance Appraisal in HRM

The majority of the supervisors in the company are in charge of performance reviews. However, depending on who is evaluating the employee’s performance, there are various sorts of employee  performance appraisals in HRM.

The following are the four main types of performance appraisal:


Here, the person rates their own job performance and behavior at work.


Peer Assessment

In this assessment, the team members, coworkers, and workgroup are in charge of determining how  well the individual is performing.


360-Degree Performance Appraisal 

In this kind of appraisal, feedback on an employee’s performance is gathered from peers, their direct  supervisor, and the employee themselves.


Negotiated Appraisal

new trend in appraisal is used to prevent disagreements between employees and their managers. In this kind of performance review, a mediator assesses the worker’s performance and focuses more on the positive aspects than the negative ones.


What are Different Methods of Employee Performance Appraisal

There are two different types of employee performance appraisal techniques employed by different, conventional techniques, and current techniques. The newer approaches are more concerned with the entire health of the organization, the ancient methods are relatively easy and quick.

The following is a list of some conventional techniques that can be applied to employee performance evaluations:

Rating Scales 

This scale quantifies traits like attitude, initiative, reliability, etc. The rater is given a scale from excellent to poor, and the rating is used to calculate the employee’s performance.



A checklist form of performance appraisal consists of “Yes” and “No” columns for various employees’ qualities make up a checklist method of performance evaluation. Based on whether the attributes are present in the employee or not, the rater must mark the box.


Performance Appraisal by Forced Choice Approach 

In this approach, the rater is given various claims about the employee’s performance and is required to mark the statements as true or false. The Human Resource department continues to assess performance based on the answers of the rater.


Forced Distribution Method 

With this method, it is pre-assummated that an employee’s performance follows a bell-shaped distribution. As a result, the rater must assign points to each employee on the scale.


Critical Incidents Method

In this case, the supervisor takes the employee’s criticizing behavior into account when assessing performance.


Performance Appraisal by Behaviorally Anchored Rating Scale

A variety of statements concerning the employee’s behavior that are descriptive in nature are prepared for the behaviorally anchored rating scale. These actions are given points on a scale, and the rater must identify the points that most precisely describe the employee’s behavior.


Field Review Method

The performance reviewer in the field review approach is typically someone from outside the department. People from the corporate office or HR department do the performance evaluation of the employee based on the records and interviews.


Performance Tests and Observations 

This type of oral test is used to gauge an employee’s proficiency in their sector. Employees may occasionally be given a circumstance  to show off their abilities, after which their performance will be assessed.


Confidential Reports

This method of confidential reports is frequently used by government agencies. The effectiveness of the leadership, teamwork, ethics, technical skill, attendance, and other factors are taken into consideration while evaluating the employee. The reviewer sends a private evaluation of the employee’s performance to the relevant authority.


Cost Accounting Method

This straightforward approach links employee productivity to the business’s financial gains. The rater looks at how much it will cost the business to keep the employee on staff and how much the employee will contribute financially.


Comparative Evaluation Approaches

This method involves evaluating coworkers’ performance in contrast to one another. The ranking approach and the paired comparison method are its two subtypes. In the business world, it is very common technique for evaluating an employee’s performance.


Modern Methods of Employee Performance Appraisal

Here is a list of different modern methods which can be used for employee performance appraisal:

Management by Objectives

In this approach, an employee’s performance is evaluated based on the goals they have met. The management communicates the set goals to the employees at the start of the fiscal year, and at the conclusion of the year, the employee’s performance is compared to the stated goals and reviewed for the assessment.


Psychology Appraisal

Psychologists are invited by business to evaluate the performance of the staff members. The performance in question is situated within the context of a potential future performance. The tools utilized for evaluating performance are psychological testing, in-depth interviews, reviewers, and talks with the supervisor.


Assessment Centre

Several exercises are carried out at the company’s assessment Center to genuinely examine the employee’s performance. Discussions, role playing, computer simulations, and many other activities are all part of the exercise. The personnel are judged on their administrative process, emotional intelligence, confidence, and communication skill. After seeing the event, the rater assesses the employee’s performance.


360-Degree Feedback

This 360-degree feedback technique gathers data on an employee’s performance from peers, group members, supervisor, and self-evaluation. To assess the employee’s overall work performance, all comments are considered.


720-Degree Feedback

Like the 360-degree feedback system, here feedback is gathered from both connected individuals from outside the organization and stakeholders within the corporation. Customers, suppliers, investors, and other financial organizations offer opinions on the employee’s performance.


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