Performance Appraisal - Process and Methods

Performance Appraisal

Introduction

Performance appraisal means checking how well an employee is doing their job. It helps the company understand strengths, weaknesses, and future potential. It also guides decisions like promotion, training, and salary.

Process of Performance Appraisal

1. Setting Standards

The manager first sets clear goals and expectations for the employee.

These standards act like a measuring scale to judge performance.

2. Communicating Expectations

The goals are explained to the employee so both sides understand what “good performance” means.

3. Measuring Performance

The manager observes the employee’s work over a period.

Data is collected using reports, attendance, behaviour, completion of tasks, etc

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4. Comparing with Standards

The employee’s actual work is compared with the set goals.

This shows whether the employee is above, below, or meeting expectations.

5. Feedback and Discussion

The manager and employee sit together for a meeting.

Strengths, weaknesses, and improvement areas are discussed honestly.

6. Decision Making

Based on performance, decisions are taken about promotion, salary increase, rewards, training, or corrective action.

7. Review and Follow-up

The manager keeps checking progress.

New goals may be set for the next period.

Methods of Performance Appraisal

1. Rating Scale Method

The manager rates the employee on a scale (1–5 or poor to excellent).

2. Checklist Method

A list of statements about the employee’s behaviour is marked as Yes/No.

3. 360-Degree Appraisal

Feedback is taken from managers, co-workers, subordinates, and sometimes customers.

4. Essay Method

The manager writes a short note describing the employee’s performance.

5. Management by Objectives (MBO)

Both the manager and employee set goals together and measure results at the end.