Modern Methods of Performance Appraisal

1) Management by Objectives

In this method, first the organizational goals are defined then individual goals are defined for the employees. The performance of the employees is reviewed against achievement of individual goals. The management measures the performance of employees and compares it with the expected performance to appraise the employees.

2) Assessment Centre

Assessment centre is a place where several activities are organized for the employees by the management to evaluate job related skills. These activities usually include social events, assignments, business games and role play. This technique mainly gives emphasis on evaluating interpersonal skills, intelligence and planning and organizing skills. The potential of an employee for a new job as well as his training and development needs are evaluated by this method.

3) Human Resource Accounting Method

This method aims to find out the net contribution of employee to the company in monetary terms. The cost of employee is calculated by adding the expenses incurred on the employee like his compensation, cost of recruitment and training and development. After this, the monetary contribution of employee is found out. The difference between contribution and cost of employee indicates the performance of employee. If the contribution is more the employee will be appraised positively.

4) Behaviorally Anchored Rating Scale

This method gives emphasis on the job related behaviors of employee. The general behavior not related to job is not considered. This method breaks down the job into different behaviors on behaviorally anchored rating scale. Then the behaviors of the employee are compared with the behaviors rated on the scale. For example, in a company the positive behaviors of a customer care executive job are to receive the call within five seconds, greet the customer in a polite way. So, the employees who are showing these behaviors will be anchored to excellent numerical ratings on the scale and who are not will be anchored to poor numerical ratings on the scale.

5) 360 Degree Performance Appraisal

This method makes the appraisal more transparent and participative. The performance of employee is appraised by different people with whom he interacts in his job. The specialty of this method is that apart from other parties the employee also appraises his performance. People of any department who are in contact with employee can be a part of this method. The six parties that are mainly involved in this method are top management, seniors, peer group, subordinates, customers and the employee himself. Structured questionnaires are prepared to collect feedback from different parties about the performance of the employee. Employee also appraises himself by answering the questionnaire. On the basis of this feedback, the employee is appraised positively or negatively.