Definition: The Performance Appraisal is the assessment of the employee’s job performance against the benchmark previously set for the categories such as output, leadership, teamwork, versatility, supervision, etc. Performance appraisal should not be simply a once- or twice-yearly formal interview. 360-degree feedback is a multidimensional performance appraisal method that evaluates an employee using feedback collected from the employee’s circle of influence namely managers, peers, customers, and direct reports. Human resource (cost) accounting method analyses an employee’s performance through the monetary benefits he/she yields to the company. Here’s a close look at the six most-used modern performance methods: Management by objectives (MBO) is the appraisal method where managers and employees together identify, plan, organize, and communicate objectives to focus on during a specific appraisal period. transaction Each of the methods could be effective for some purposes, for some organizations. Specific scenarios are taken into account while performing psychological appraisal. Performance appraisal is a development activity undertaken by the company for improvement of the skill, knowledge, ability, … After setting clear goals, managers and subordinates periodically discuss the progress made to control and debate on the feasibility of achieving those set objectives. Implementation of human resource cost accounting method: Choosing the right performance appraisal method is more critical than ever since it reflects what you think of your employees and how much you care about employee morale. When an employee’s performance is evaluated based on cost accounting methods, factors like unit-wise average service value, quality, overhead cost, interpersonal relationships, and more are taken into account. The main advantage of this method is that it will not only assess the existing performance of an individual but also predict future job performance. Performance Appraisal can be done with following objectives in mind: To maintain records in order to determine compensation packages, wage structure, salaries raises, etc. Rating Scales. This method is very unpopular among employees as nobody can deal with rating himself or herself. The management of a firm establishes fixed standards and the final deliverable prepared by the team involved has to be as per those points and then, each member is evaluated. A performance appraisal can be an important process for the employee and the manager. There are many performance appraisal methods that organisations can implement depending on their preference as most have their advantages and limitations. A checklist is prepared on the basis of Yes or No with regard to the traits of an employee. To prevent performance appraisals from becoming nothing more than empty buzzwords, HR managers need to revamp their existing process and try implementing one of the six modern performance appraisal methods that are listed below. The graphic rating scale is one of the most popular and simplest techniques for appraising performance. Whether the employee has been able to do justice the entire process or not is evaluated at the end of the year. Reportees tend to have the most unique perspective from a managerial point of view. The study shall provide a conceptual and analytical appraisal of performance appraisal technique and its effect on employee motivation. So, the employee knows his/her job and its terms clearly. Methods of Performance Appraisal Numerous methods have been devised to measure the quantity and quality of employee's job performance. There are many types of performance appraisal methods. A salesperson is evaluated on the basis of his/her sales skills and accomplishment of financial goals set previously. are often brushed under the rug. © 2020 - EDUCBA. Performance appraisals are meant to provide a positive outcome for employees. These reviews help determine an employee’s ability to work well with the team, take up initiatives, and be a reliable contributor. This method focuses on analyzing an employee’s future performance rather than their past work. Businesses of all sizes and industries can use BARS to assess the performance of their entire workforce from the entry level agent to c-suite executives. The assessment centre method enables employees to place right men on right job various tiers and helps in performance! 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