Human capital is a company’s most crucial and valuable asset that needs to perform at optimal level for success. Many companies evaluate the performance of their workforce during appraisals.
The structure of your employee performance evaluation is determined by the management style and the nature of job and workforce.
There are various styles of performance appraisals.
Let’s begin the discussion by determining the parties involved in this process. Performance review/appraisal/evaluation is dependent on the feedback of three major participants.
- Employee under evaluation
- Direct manager or supervisor
- Other stakeholders
Presence of all three parties makes the evaluation process holistic.
Self-evaluation method
The employee is asked to judge their own performance for the year. The method is pretty simple; the results can be clouded with bias.
Employees may not able to identify shortcomings and mistakes in their own performance and grade themselves on a higher spectrum.
Employee feedback is collected and then matched with the manger’s grade. This identifies the gaps in employees’ performance. Inclusion of employees in the appraisal process can remove uncertainty and make the entire process more transparent. This method allows employee engagement, autonomy to set new goals and rectify mistakes.
Management by objectives (MBO)
MBO allows managers and employees to work together during the goal setting phase. In the beginning of the year, the manager and employee can identify objectives and define ‘success’ for each objective.
Knowledge the true meaning of objective accomplishment will prevent managers and employees to have false or high expectations. At end of the year, each objective can be measured against its success standards to determine employee performance. This process is easier and engages employer and employee in an effective manner.
Graphic rating scale
This is a simple and functional method to measure employee’s productivity. It ranks major attributes, traits, behavior, competencies and project completion ratio on a numerical scale. The total score determines an employee’s performance. This method requires the manager and employees to have full knowledge and agreement on the ranking scale.
Critical incident method
This method provides managers a great opportunity to describe employee’s reaction and response to different scenarios and situations that were experienced throughout the year. This method is quite open-ended and may include manager’s bias. Incidents need to be evaluated as soon as they occur, or else time will make the review subjective.
Structure 360 feedback
Feedback is formally collected from peers, employees and supervisors in a very structured and formal manner. A survey is designed that evaluates employee’s behavior, skills, and intelligence. This process can be very time consuming and costly as multiple parties’ input is involved.
Employees’ performance reviews need to be objective and free of ambiguity or biases. With a well-designed performance review process, you can reward deserving employees in a better way.
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