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Pros and Cons of Different Employee Appraisal Approaches

The basic ingredients in all employee appraisal systems are pretty much the same: setting performance criteria, developing tracking and documenting procedures, determining which areas should be measured quantitatively, and deciding how the information is to be communicated to employees. Here are factors to take into account in choosing between systems:

  • The level of employees being appraised: The degree of an employee’s autonomy is one key variable that can help shape your range of evaluation techniques.

  • The degree of training needed to implement the program: Make sure that you take into consideration the current workload of your supervisors before you introduce a program that requires extensive training.

  • Availability of development resources: Make sure that you have the appropriate time and resources available. Remember that as job requirements change, the evaluation forms also must change, which can mean additional work down the road.

Goal setting, or management by objectives

Management by objectives (MBO) focuses on results and the activities and skills that truly define an employee’s job. Even more recent forms of appraisal that require reciprocal feedback are in large part based on the principles of MBO.

In a typical MBO scenario, an employee and manager sit down together at the start of an appraisal period and formulate a set of statements that represent specific job goals, targets, or deliverables (milestones that comprise a project or process). These should be as specific and measurable as possible.

This list becomes the basis for an action plan. At a later date, the employee and the manager sit down again and measure employee performance on the basis of how many of those goals were met.

Advantages:

  • Provides a sharp focus for evaluating employee performance

  • Enlists the employee in the appraisal process

  • Can be easily integrated into companywide performance and improvement initiatives

  • Gives employee a blueprint for successful performance

  • Emphasizes action and results

Downsides:

  • Takes time and involves considerable documentation

  • Works effectively only if supervisors are trained in the process

  • Can lack sufficient specificity of goals

  • Doesn’t work well for employees who have little discretion as to how their jobs are performed

Behaviorally anchored rating scale

Behaviorally anchored rating scale (BARS) systems are designed to emphasize behaviors, traits, and skills needed to successfully perform a job. A typical BARS form consists of a left column has a rating scale and a right column contains behavioral anchors that reflect those ratings.

Advantages:

  • Reduces the potential for biased responses

  • Focuses on specific, observable behaviors

  • Provides specific and standardized comments on job performance

Downsides:

  • Can be time consuming and complicated to develop

  • Depends on accuracy and appropriateness of “anchor statements”

  • Must be updated as job requirements change

Critical incidents

The critical incidents method of performance appraisal is built around a list of specific behaviors, generally known as critical behaviors, that are deemed necessary to perform a particular job competently. Managers, the HR department, or outside consultants can draw up the list. Performance evaluators use a critical incident report to record actual incidents of behavior that illustrate when employees either carried out or didn’t carry out these behaviors.

Advantages:

  • Records employee performance as it happens

  • Always links employee behavior to job performance

  • Provides a documented record of behaviors over time

  • Identifies the most important dimensions of a job

  • Offers more insight into job descriptions and core competencies

Downsides:

  • Requires disciplined and regular attention

  • Can compromise objectivity of recorded incidents because of the evaluator’s emotional state when the incident is recorded

  • Depends on a clear definition of critical behaviors

Multirater assessments

Multirater assessments are also called 360-degree assessments or 360 reviews. The employee’s supervisors, co-workers, subordinates, and, in some cases, customers are asked to complete detailed questionnaires on the employee. The employee fills out the same questionnaire. The employee then compares her assessment with the other results.

Advantages:

  • Draws assessments from a wide variety of sources

  • Gives maximum feedback to employee

Downsides:

  • Must be professionally developed

  • Relies on people outside the employee’s immediate work circle, which may cause resentment

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