Businesses use many types of appraisal methods to gage an employee's performance: each offers strengths and weaknesses for given environments. Let's outline some commonly-used and recently-developed methods that can be useful for various feedback situations.
Graphic Rating Scales: This method involves assigning a rating system to gage pertinent traits. Ratings can be numerical ranges (one to five), descriptive categories (below average, average, and above average), or scales of desirable and undesirable traits (poor to excellent). This method is simple to setup and easy-to-follow, but is often criticized for being too subjective, since the evaluator defines the broad traits, such "leadership ability" or "conformance with standards." (Kulik, 2004)
Behavioral Methods: This broad category encompasses several assessment methods with similar attributes. The employer will identify whether an employee displays certain behaviors, such as when a business asks a customer to identify whether a sales representative's recommendation is useful or not. This method is useful when assessing performance where behavior is critical to success, but identifying these behaviors and employee standards can be time-consuming. (Kulik, 2004)
Two plus Two: This assessment method is a relative newcomer. The two-plus-two feedback system demonstrates how to use appraisals for improvement purposes. By offering employees two compliments and two suggestions for improvement in high-priority areas, creators Douglas and Dwight Allen suggest employers can become "more pleasant, more dynamic, and more productive." (Formula 2+2, 2004) This system can provide significant benefit when the goal of the performance appraisal is employee improvement. However, it is less useful when the goals of the review concern changes in compensation and ranking.
Appraisal methodologies depend on the type of work being performed: an assembly worker requires a different type of appraisal system than a business consultant. Significant planning is required to develop appropriate methods for each business unit in an organization, to obtain maximum performance toward the goals of the appraisal.
Source: Don McCubbrey. “Appraisal Methods.” Business Fundamentals, Sept. 20, 2016.