8 performance appraisal methods you should be aware of

8 performance appraisal methods you should be aware of

Performance appraisals form an essential part of the HR department as they provide important and useful information for the assessment of employee’s skill, knowledge, ability and overall job performance. These appraisals are not only used to eliminate behavior and productivity issues, but also to motivate employees to contribute more. There are many methods that organisations can implement depending on their preference as most have their specific advantages as well as limitations. Let us have a look at some of them in more detail.

Graphic Rating scale:

However, the scale has disadvantages that make it difficult to use as an effective management tool. Even with intense training, some evaluators will be too strict. Some will be too lenient, and others may find it hard to screen out their personal agendas. Although it is good at identifying the best and poorest of employees, it does not help while differentiating between the average employees.

Analyse performance of employees working on Project A from April to June 2017

Essay Performance Appraisal method:

Essay Appraisal is a traditional form of Appraisal also known as “Free Form method.” It involves a description of the performance of an employee by his superior which needs to be based on facts and often includes examples to support the information. Under this method, the rater is asked to express the strengths and weaknesses of the employee’s behavior.

This technique is normally used with a combination of the graphic rating scale because the rater can present the scale in more detail by also giving an explanation for his rating. While preparing the essay on the employee, the rater also needs to consider job knowledge, understanding of the company’s policies and objectives, relations with peers, ability to plan and organize, attitude and perception of employee in general.

The Essay evaluation method is a non-quantitative technique and highly subjective. While it provides a good deal of information about the employee, it takes a lot of time of the appraiser which is not always feasible.

AttributeDiscussion / Comments
1Does the employee pay attention to detail?
2Does the employee work well with the team?
3Is the employee capable of taking initiative?


Checklist Scale:

Under this method, checklist of statements of traits of employee in the form of Yes or No based questions is prepared. If the rater believes strongly that the employee possesses a particular listed trait, he checks the item; otherwise, he leaves the item blank. Here the rater only does the reporting or checking and the HR department does the actal evaluation. Although it does not allow detailed analysis of the performance.


Gives complete attention to detail
Has complete knowledge of the product
Works well with the team
Takes initiative
Has creative approach to solving problems


Critical Incidents:

In this method, the manager prepares lists of statements of very effective and ineffective behavior of an employee. These critical incidents or events represent the outstanding or poor behavior of employees on the job. The manager maintains logs on each employee, whereby he periodically records critical incidents of the workers behavior. At the end of the rating period, these recorded critical incidents are used in the evaluation of the workers’ performance. It provides an objective basis for conducting a thorough discussion of an employee’s performance.

Although this method avoids recency bias, there is a tendency for managers to focus more on the negative incidents than otherwise.

Work Standards Approach:

In this technique, management establishes the goals openly and sets targets against realistic output standards. These standards are incorporated into the organizational performance appraisal system. Thus each employee has a clear understanding of their duties and knows well what is expected of them. Performance appraisal and interview comments are related to these duties. This makes the appraisal process objective and more accurate. It works best in long-term situations which is recommended as it considers performances during that time.

However, it is difficult to compare individual ratings because standards for work may differ from job to job and from employee to employee. It does not allow for reasonable deviations.

Ranking Appraisal:

Here manager compares an employee to other similar employees, rather than to a standard measurement for the purpose of assessing their worth. The employees are ranked from the highest to the lowest or from the best to the worst. The problem here is that it does not tell that how much better or worse one is than another. Also it cannot be used for large number of employees.

Attention to detail






MBO (management by objectives) methods of performance appraisal are results-oriented. That is, they seek to measure employee performance by examining the extent to which predetermined work objectives have been met. Usually the objectives are established jointly by the supervis:or and subordinate. Once an objective is agreed, the employee is usually expected to self-audit; that is, to identify the skills needed to achieve the objective. Typically they do not rely on others to locate and specify their strengths and weaknesses. They are expected to monitor their own development and progress. The MBO method concentrates on actual outcomes

What makes MBOs efficient is the ability to set SMART Goals i.e. set goals that are Specific, Measurable, Actionable, Relevant and Time-bound.


The problem of judgmental performance evalu­ation inherent in the traditional methods of performance evaluation led to some organisations to go for objective evaluation by developing a technique known as “Behaviourally Anchored Rating Scales (BARS)” around 1960s. This method of performance appraisal is considered better than the traditional ones because it provides advantages like a more accurate gauge, clearer standards, better feedback, and consistency in evaluation.

The BARS method is designed to bring the benefits of both qualitative and quantitative data to the employee appraisal process. It compare an individual’s performance against specific examples of behaviour that are anchored to numerical ratings.

Although even this methods has its limitations as it is often accused of being subject to unreliability and leniency error.

Performance appraisal is already being considered a necessary evil. Thus companies need to be careful while selecting out of these appraisal methods. The method should be able to provide value to the company as well as the employees and managers.