Employee Assessment

A performance review system is an approach to assessing and encouraging positive job performance. It is a tool for development, but it also provides the basis for the company to give raises and promotions or take corrective actions. There are various evaluation methods, including rating scales, essays, checklists, critical incident appraisals, work standards approach, and ranking methods. With the management by objectives (MBO) approach, performance is measured against the goals set by the manager and employee. A narrative is included with the behaviorally anchored rating scale (BARS) approach for each rating. This text addresses how to design an effective performance appraisal system.

Appraisal Methods

Key Takeaways

  • When developing performance appraisal criteria, it is important to remember the criteria should be job specific and industry specific.
  • The performance appraisal criteria should be based on the job specifications of each specific job. General performance criteria are not an effective way to evaluate an employee.
  • The rating is the scale that will be used to evaluate each criteria item. There are a number of different rating methods, including scales of 1–5, yes or no questions, and essay.
  • In a graphic rating performance evaluation, employees are rated on certain desirable attributes. A variety of rating scales can be used with this method. The disadvantage is possible subjectivity.
  • An essay performance evaluation will ask the manager to provide commentary on specific aspects of the employee's job performance.
  • A checklist utilizes a yes or no rating selection, and the criteria are focused on components of the employee's job.
  • Some managers keep a critical incidents file. These incidents serve as specific examples to be written about in a performance appraisal. The downside is the tendency to record only negative incidents and the time it can take to record this.
  • The work standards performance appraisal approach looks at minimum standards of productivity and rates the employee performance based on minimum expectations. This method is often used for sales forces or manufacturing settings where productivity is an important aspect.
  • In a ranking performance evaluation system, the manager ranks each employee from most valuable to least valuable. This can create morale issues within the workplace.
  • An MBO or management by objectives system is where the manager and employee sit down together, determine objectives, then after a period of time, the manager assesses whether those objectives have been met. This can create great development opportunities for the employee and a good working relationship between the employee and manager.
  • An MBO's objectives should be SMART: specific, measurable, attainable, results oriented, and time limited.
  • A BARS approach uses a rating scale but provides specific narratives on what constitutes good or poor performance.