Understanding how employees are performing at job tasks is necessary for a business leader to gauge business efficiency. Performance evaluations show the strengths and weaknesses of individuals and provide insights into gaps in development, training or processes among groups. Performance appraisals methods have pros and cons, so choosing the right method for your business is important.
360-Degree Performance Appraisal
The 360-degree performance method is a comprehensive review of task ability, professionalism and leadership traits. It not only considers the performance of tasks and the successful completion of goals but also interviews everyone who works with or under the employee along with any applicable manager reviews.
The benefit of the 360-degree method is the level of detailed information it provides when it uses data from so many sources. It gives you an idea of the leadership potential and style of an employee, the person's impact on overall team morale, and whether the employee is a professional who gets the job done.
The negative side of the 360-degree method is the time and energy it takes. Depending on how large a company or department is, this performance appraisal method could take the time of many people to conduct a 360-degree review for all employees. The time commitment is why this particular model is often reserved for reviews of potential promotion and leadership candidates.
Self-Evaluation Method
The self-evaluation method gives employees a template to rate themselves on skills and goal achievement. It is often completed in conjunction with other evaluation methods to get a stronger idea of any gaps that exist.
The benefit of the self-evaluation method is that you get into the mind of the employee. Managers don't always see a low-performing employee as a highly aspiring employee. The self-evaluation also gives employees a chance to define their own goals in professional development, achievement and promotion. Managers can identify motivated individuals with this method. Because the employee is creating the appraisal, there is usually more engagement regarding solutions, action plans and next-step goals.
The self-evaluation method isn't without problems. Employees may not have a solid sense of self-awareness to provide quality information, which is why this method is usually not an exclusive appraisal. Some employers also find some employees are not forthright in the evaluation, creating concerns about the accuracy of the evaluation.
Rating Scale Method
Rating scales are common in business performance evaluations. You have probably seen and even used this form of evaluation many times in your career. It takes all employees and rates them on a scale of excellence. The scale often ranges from one to five or one to 10, rating each defined skill on its own scale. For example, an employee might score a nine on customer service but receive a five on compliant paperwork.
The benefit of this system is it creates an even measuring tool for large groups of employees. Everyone is graded on the same topics and the same scale. This is a fast and easy method of evaluation, making it cost-effective to administer.
A significant issue with this method occurs when managers go through them so quickly they don't truly consider the employee's performance. Some reviews may be more arbitrary than others, while some may be skewed by a bias if the manager favors one employee over another.
Narrative Method – Critical IncidentPerformance appraisals are significantly more objective where performance has been documentedthroughout the review period. The narrative performance appraisal, which requires ongoingdocumentation and description by the evaluator or rater, is more time consuming than other methods,but can provide a more accurate picture of performance. Narrative methods include criticalincident,essay,and fieldreview.TheCritical Incidentmethod is the most structured of the narrative forms. Raters document all criticalperformance incidents during the review period, both positive and negative, in a criticalincidentlog. Thelog is then reviewed with the employee at the performance appraisal meeting. This method is almostalways used in conjunction with another appraisal method.AdvantagesThe critical incident method has the ability to refer to specific performance incidents creating the basisfor an objective and job-related performance evaluation. When completed properly, this method ensuresthat the appraisal covers the entire review period and not only the most recent events.