Methods of Employee Performance Appraisals by Outlining their Benefits and Limitations

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Introduction

Organisations and managers are now using a number of appraisal methods in order to assess employee performance, and these methods both have benefits and negatives. An employee performance appraisal is a critique and a review of an employee’s performance during the year, or another specified time period (Woods, 2003). Performance appraisals are one of the most important processes for successful businesses, and are one of the key metrics a human resource department within an organisation will be judged on (Kressler, 2003). Performance evaluations and appraisals have been conducted since the times of Aristotle, and the measurement of an employee’s performance can allow a company to take rational decisions on an individual employee level, when reflecting on their performance (Virginia Tech, 2010). Employee performance appraisals provide a structure for managers and employees to meet and discuss performance with each other (Lotich, 2014). Jafari et al., (2009) assert that performance appraisal is one of the most important processes that the human resource department has to implement. Indeed, “there is little disagreement that if well done, performance measurements and feedback can play a valuable role in effecting the grand compromise between the needs of the individual and the needs of the organisation” (Virginia tech, 2010). Companies need to understand the purpose of appraising performance. This is to motivate an employee to increase their performance levels by attempting to help the employee understand why they are not performing effectively. It is also to identify how they can perform better (Kokemuller, 2012). This essay will look at a range of different employee performance appraisal methods, ranging from rating scales to team and self-evaluations. Both the benefits and the limitations of these will be looked at, in order to assess how effective they are as performance appraisal methods. Finally, the conclusion will discuss if there is one effective method that organisations should use, or if this is not the case.

Rating Scales

One method of appraisal is rating scales, and this is one of the more common forms of performance appraisal found within organisations (Jafari et al., 2009). Two of these which are commonly used are the graphic rating scale as well as the behavioural rating scale. Using the graphical rating scale, the employees are assigned a score based upon different criteria which are important to job success (Kokemuller, 2012). The behavioural scale focuses on the actual behaviours an employee displays. The benefits of rating scales is the fact that they are easy to use and to understand. Many managers and employees are also familiar with this technique, and they offer a simple way to communicate areas of strengths and weaknesses to the employee (Kokemuller, 2012). The graphical rating scale is not very time consuming at all, and they are easy to develop and administer as well as allowing for a range of quantitative analysis. Negatives of rating scales is the assumption that they are tied to a raise or a bonus for the employee, and this can contribute towards score inflation.

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