Methods of Performance Evaluation

Performance evaluation is a systematic process of evaluating how well employees are performing their jobs. The appraisal is based on results obtained by the employee in his/her job, not on the employee’s personality characteristics.

Methods of Performance Evaluation

4 Methods of Performance Evaluation;

  1. Category rating methods.
  2. Comparative methods.
  3. Behavioral/objective methods.
  4. Narrative methods.

Category Rating Methods

The simplest methods for appraising performance are category rating methods, which require a manager to mark an employee’s level of performance on a specific form divided into categories of performance.

The graphics rating scale and checklist are common category rating methods.

  1. Graphics Rating Scale.
  2. Checklist.

Graphics Rating Scale

Graphic rating scale is a scale that lists a number of traits and a range of performance for each that is used to identify the score that best describes an employee’s level of performance for each trait.


The checklist is composed of a list of statements or words. Raters check statements most representative of the characteristics and performance of employees.

This method requires the rater to select statements or words that describe the employee’s performance and characteristics. He does not evaluate employee performance. The rater is usually the immediate supervisor. He just supplies report about Performance Appraisals and the final rating is done by the HR department.

But without rater’s knowledge, the HR department may assign weights to different items on the checklists according to each item’s importance. The result is called a weighted checklist. The weight is the average score of the raters prior to use the checklist. The weights allow the rating to be quantified so total scores can be determined. The limitations of this method include use of personality criteria instead of performance criteria, misinterpretation of checklist items and the usage of improper weights by the HR department.

These statements are ordered progressively in terms of more or less of some property. An example-

  1. David always goes to John.
  2. David often goes to John.
  3. David sometimes goes to John.
  4. David never goes to John.

Limitations of checklist

  • It suffers from biases on the part of the rater because he cannot distinguish between positive and negative questions.
  • A separate checklist must be prepared for different classes of jobs. It is expensive and time-consuming.

Comparative Methods

Comparative methods require that managers directly compare the performance of their employees against one another.

For example, a data-entry operator’s performance would be compared with that of other data-entry operators by the computing supervisor. Comparative techniques include ranking, paired comparison, and forced distribution.

  1. Ranking: The ranking method consists of listing all employees from highest to lowest in performance. The primary drawback of the ranking method is that the size of the differences among individuals is not well defined. For example, there may be little difference in performance between individuals ranked second and third, but a big difference in performance between those ranked third and fourth. Ranking scale gives rank by value, such as-
    Very Good
    Not Bad
    Very Bad
  2. Forced Distribution: Forced distribution performance appraisal method in which ratings of employees’ performance are distributed along a bell-shaped curve. It is Similar to grading on a curve; predetermined percentages of rates are placed in various performance categories.
    • Example:
      • 15% high performers.
      • 20% of high-average performers.
      • 35% average performers.
      • 20% of low-average performers.
      • 15% low performers.

3. Behavioral/Objective Methods

In an attempt to overcome some of the difficulties of the methods just described, several different behavioral approaches have been used.

Behavioral approaches hold promise for some situations in overcoming some of the problems with other methods.

  1. Behavioral Rating Approaches: Behavioral rating approaches attempt to assess an employee’s behaviors instead of other characteristics. Some of the different behavioral approaches are behaviorally anchored rating scales (BARS), behavioral observation scales (BOS), and behavioral expectation scales (BES).
  2. Management by Objectives (MBO): Management by objectives (MBO) specifies the performance goals that individual hopes to attain within an appropriate length of time. The objectives that each manager sets are derived from the overall goals.

4. Narrative Methods

Managers and HR specialists frequently are required to provide written appraisal information.

Documentation and description are the essence of the critical incident, the essay, and the field review methods.

  1. Critical Incident.
  2. Essay.
  3. Field Review.
  4. 360° Feedback or Multi-source Appraisal.

These records describe an employee’s actions rather than indicating an actual rating.

Critical Incident

In the critical incident method, the manager keeps a written record of both highly favorable and unfavorable actions in an employee’s performance.

When a “critical incident” involving an employee occurs, the manager writes it down. A list of critical incidents is kept during the entire rating period for each employee. The critical incident method can be used with other methods to document the reasons why an employee was rated in a certain way.

Critical Incident Method was first used by the US Army during World War Two. Now it is widely used in the business organizations to appraise employee performance.

Under this method, the manager keeps a written record of highly favorable and unfavorable employee actions. The focus is on the key behaviors that make the difference between doing a job effectively or ineffectively. The statements are called critical incidents.

The supervisor records these incidents during the evaluation- period for each employee. Both positive and negative incidents are recorded. Supervisor keeps a log with positive and negative examples (critical incidents) of subordinate’s work behavior.

Advantages of Critical Incident method

  1. This method is extremely useful for giving employees’ job-related feedback.
  2. It also reduces recency biases.
  3. It identifies even rare events that might be missed by other methods which only focus on common and everyday events.
  4. Data are collected from the respondent’s perspective and in his or her own words.
  5. It provides an objective basis for conducting a discussion of an individual’s performance.
  6. It forces the supervisor to evaluate subordinates on an ongoing performance basis. Drawbacks

This method suffers from some limitations, which are listed below:

  1. It is difficult to rate or rank employees relative to one another,
  2. There may occur variations in how managers define a ‘critical incident’,
  3. Most employee actions are not observed and may become different if observed,
  4. Supervisors often do not record incidents as they occur,
  5. Negative incidents are more noticeable than positive ones,
  6. Very close supervision is required, which employees may not like,
  7. It is time-consuming and burdensome for managers to write down critical behaviors of a large number of subordinates throughout the year.
  8. Respondents may not be accustomed to or willing to take the time to say (or write) a complete story when describing a critical incident.


The essay, or “free-form,” appraisal method requires the manager to write a short essay describing each employee’s performance during the rating period.

The rater usually is given a few general headings under which to categorize comments. The intent is to allow the rater more flexibility than other methods do.

As a result, the essay is often combined with other methods.

The rater writes a narrative describing an employee’s strengths, weaknesses, past performance, potential and suggestions for improvement. It is simple and requires no complex forms or extensive training to complete. It can provide a good deal of information about an employee.

Because essays are unstructured, they are likely to vary widely in terms of length and content. Some raters are better writers than others are. It contains a subjective evaluation of the reported behavior of an individual and may affect such important decisions as promotion and layoff.

No attempt is made to evaluate an employee in a quantitative manner.

Field Review

This approach can include the HR department as a reviewer, or a completely independent reviewer outside the organization.

In the field review, the outside reviewer becomes an active partner in the rating process. The outsider interviews the manager about each employee’s performance and then compiles the notes from each interview into a rating for each employee.

Then the rating is reviewed by the supervisor for needed changes. This method assumes that the outsider knows enough about the job setting to help supervisors give more accurate and thorough appraisals.

In this method, a skilled representative of the human resource department goes into the field and assists supervisors with their ratings. The personnel specialists solicit from the immediate supervisor specific information about the employee’s performance.

Then the experts prepare an evaluation based on this information. The evaluation is sent to the supervisor for review, changes, approval, and discussion with an employee who was rated.

Since the skilled professional is completing the evaluation form, reliability and comparability are more likely, but the usage of skilled professionals makes this approach costly and impractical for many firms.

And since the supervisor is the primary source of information, bias may still exist.

360° Feedback or Multi-source Appraisal

360-degree feedback, also known as multi-rater feedback, multisource feedback, or multi-source assessment.

Most often, 360- degree feedback will include direct feedback from an employee’s subordinates, peers, and supervisor(s), as well as a self-evaluation.

It can also include, in some cases, feedback from external sources, such as customers and suppliers or other interested stakeholders.

360-degree evolution means the evaluation of an employee will be assessed based on ideas of many other different people for example customers, suppliers, peers, and direct reports. If the assessee is a manager, his/her staff will be often asked for feedback on how that manages is doing his task

It can of using 360-degree evolution it is vital that the process is implemented by the managers of the Human Resources Department.

So that the subordinate reviewer’s (or staff) are made sure that all their assessments on performance are kept anonymous.

The components of this evaluation are as follows;

  • Self-evaluation
  • Subordinate’s appraisal
  • Peer appraisal and
  • Superior’s appraisal

Advantages of this evaluation are as follows;

  • Offer a more comprehensive view of the performance of employees.
  • Improve Credibility of performance appraisal.
  • Such a colleague’s feedback will help strengthen self-development.
  • Increase the responsibility of employees to their customers.
  • The mix of ideas can give a more accurate assessment.
  • Opinions gathered from lots of staff are sure to be more persuasive.
  • Not only a manager should make assessments on its staff performance but other colleagues should do too.
  • People who undervalue themselves are often motivated by feedback from others.
  • If more staff takes part in the process of performance evaluation, the organizational culture of the company will become more honest.

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