15 Most Used Traditional Performance Appraisal Methods In HRM

Performance appraisals are an integral part of employee performance and development. Employees who get rewards for their good performance are more likely to stay loyal, perform better every year, and even motivate others to deliver quality performance. This is why it is important to measure employee performance in a fair and unbiased manner. Generally, there are two types of performance appraisal methods- Traditional performance appraisal methods and modern performance appraisal methods. Today, we are going to discuss traditional performance appraisal methods in detail. Let’s begin 👇

Traditional Performance Appraisal Methods

Generally, traditional methods of performance appraisal focus on employees’ ability to take initiatives, leverage resources, and perform tasks with innovation and creativity. Moreover, employees are also evaluated based on their leadership qualities, interpersonal skills, intelligence, and integrity.

Let’s take a deeper dive into all of them: 👇

traditional performance appraisal methods
Traditional Methods Of Performance Appraisal

1️⃣ Rating Scales Method

It is a well-known traditional method of performance appraisal. As the name suggests, this performance appraisal method involves the use of a rating scale that spans from 1 to 10. In this performance appraisal method, employees’ performance is measured against several factors including their attitude, timeliness, efficiency, and interpersonal skills. 

For example, If an employee gets a low rating then it means they have received negative feedback, if the scale rating is high let’s say 9 or 10, then the employee has done exceptionally well. 

➡️ Useful For:  

The rating scale is an effective appraisal method for assessing unique traits and behaviours within your workforce.

➡️ Pros: 

  • Helps in assessing employee attributes and how they relate to their current role.
  • They are structured and standardized in nature.
  • Useful for comparing employees against one another.
  • Helps assess salary adjustments.
  • Useful in considering candidates for promotion.

➡️ Cons: 

  • Responses are open to interpretation.
  • The final rating can be deceiving.
  • Average results can be difficult to interpret.
  • Recent events can influence answers.

➡️ Tips To Implement: 

  • Attempt to be as objective as possible when posing your questions. 
  • Avoid asking subjective questions.
  • Clearly establish criteria and expected outcomes.
  • Limit your questions to those that are behavioural in nature.

💡 Interesting Fact: 

Rating scales were first introduced in the year 1910 and by 1920, the rating scale method was introduced by the Scott Company. 

2️⃣ Checklist Method

The Checklist method is one of the easiest traditional performance appraisal methods. Under this traditional method of performance appraisal, HR prepares a checklist and forwards it to the manager. The checklist may include a list of questions (depicting behaviour and job performance of employees), and the manager has to answer them in just ‘YES’ or ‘NO’ form.

The manager analyzes the question and the employee and answers them according to their evaluation of the employee. Questions in the checklist carry a numerical value based on their importance to job performance. Therefore, the appraisal score is calculated by adding up the scores of all these individual factors.

For example, the checklist may contain a question- “Is the employee helpful to other team members?” The question may carry a numerical value of 5, so if an employee has been really helpful to their team, they may get a full score of 5 or if the employee isn’t helpful according to the manager’s analysis, then they might get 1 or Zero. 

➡️ Useful For:  

Making employee performance easy to evaluate as their supervisors have to simply choose between yes/no. 

➡️ Pros: 

  • Helps managers avoid discrimination.
  • Ensures clarity of evaluation criteria.
  • Helps the manager to be objective in their reviews. 
  • Provides an organized view of the performance. 

➡️ Cons: 

  • Doesn’t allow elaborate explanations.
  • Time-consuming process.
  • Costly to prepare.
  • Easy to overlook some important evaluation factors.

➡️ Tips To Implement: 

  1. Focus on objective questions that can be answered in yes/no form. 
  2. Try to not put in a lot of questions as it can be very time consuming.
  3. Make sure that you don’t include a lot of negative statements. 

💡 Interesting Fact: 

According to Mosher and other experts, the checklist method was employed in the first known collection evaluation at an American library, which was reported in 1849.

3️⃣ Forced Distribution Method

This strategy is widely used in large corporations. It is predicted that employee performance varies widely within an organisation, with some individuals being more productive than others. As a result, with this strategy, the management must distribute employees based on their performance over the entire bell curve. Some are exceptional, while others are average, and still, others are at the bottom of the spectrum.

➡️ Useful For:  

Creating an unmistakable separation between the performances of every employee in the organization.

➡️ Pros:

  • Helpful in eliminating the leniency of the appraiser. 
  • Highlights future front-line leaders.
  • Relatively quick and easy model to understand and implement. 

➡️ Cons: 

  • Does not work well for high performing employees who are introverts in nature. 
  • Encourages discrimination among employees.
  • Can have a negative impact on innovative employees due to limited categories of evaluation.

➡️ Tips To Implement: 

  • All guidelines should be communicated to appraisers in a precise manner by the HR department. Each manager should be aware of how reviews should be interpreted and what each statement represents.
  • According to the method’s core principle, teams that perform better should be rewarded with various benefits.
  • Appraisers are unable to appraise employees at their discretion; instead, they must adhere to certain guidelines.
  • In order to achieve internal equality, businesses should calibrate their performance.

💡 Interesting Fact: 

Forced distribution method was first presented by General Electric in the 1980s.

4️⃣ Critical Incident Performance Appraisal Method

The critical incident technique is a performance review method that examines an employee’s behaviour in specific circumstances, both in which he did admirably and those in which he could have improved. A series of methods are utilized to collect data and analyze it. The critical incident technique involves observing critical human behaviours, abilities, and on-the-job situations.

critical-incident-performance-appraisal-method
Critical Incident Performance Appraisal Method

➡️ Useful For:  

In comparison to other approaches, which may be highly objective and need only rankings to assess employee performance, this method is quite subjective.

➡️ Pros:

  • It aids in the detection of unusual events that might otherwise go unnoticed by other means.
  • This method is inexpensive and gives you a lot of information.
  • The viewpoint of the respondent is taken into account.
  • Respondents are not compelled to fit within any certain framework.
  • There are numerous ways to apply the method, including observation, surveys, and interviews.

➡️ Cons: 

  • Many instances may go undetected or be inaccurate since incident reporting is based on the respondent’s perception.
  • It’s possible that biases will emerge in response to recent events.
  • The instances described may or may not be reflective of scenarios that occur on the job on a regular basis.

➡️ Tips To Implement: 

  • Begin by identifying and reviewing occurrences that happened during the course of the job.
  • The process of fact-finding includes acquiring information about the incident from members.
  • Examine the facts and data gathered from the participants by the interviewer and determine the concerns.
  • Determine whether the remedy will be able to eliminate the cause of the problem that has been discovered.

💡 Interesting Fact: 

Sir Francis Galton’s research is credited with laying the groundwork for the Critical Incident Method.

5️⃣ Essay Method

The management uses this strategy to produce a description of the employee’s behaviour and performance. In this method, the review description contains all pertinent information, such as the employee’s mindset, job knowledge, present performance, and potential for growth.

➡️ Useful For:  

Giving managers the flexibility to focus on whatever they personally find important about the individual’s performance.

➡️ Pros:

  • The essay method is far less rigid and constraining.
  • Allows the manager to emphasize practically any significant issue or performance aspect.
  • The method is fairly open-ended and adaptable.
  • Subjective in nature.

➡️Cons: 

  • It takes a long time and is tough to administer.
  • A biassed essay could be written by a manager or supervisor.
  • It’s tough to draw conclusions about organisational demands.
  • From a business standpoint, it is unprofitable.

➡️ Tips To Implement: 

  • Make sure to keep the evaluation essay short and crisp in content. 
  • Try to highlight the weaknesses and strengths of the employee. 
  • Avoid the usage of any flowery language.
  • Divide your remarks into several pointers, making them easy to analyze. 

💡 Interesting Fact: 

The essay method is labelled as the “grandfather” of performance appraisal methods. 

6️⃣ Paired Comparison Method

Employees are evaluated using this method based on any single attribute. Each employee is compared to others on a one-to-one basis, in pairs, based on a particular quality/attribute, for example, creativity. The formula N (N-1)/2 is used to calculate the number of potential pairs. While the letter N denotes the number of employees to be appraised. 

➡️ Useful For:  

Companies that have a limited number of employees and funds. 

➡️ Pros:

  • It aids the manager in determining priorities when competing demands on a company’s resources arise.
  • In nature, it is cost-effective.
  • It’s simple to pick the most significant problem to address or the solution that will give you the most benefit.

➡️ Cons: 

  • It’s beneficial when the priorities are unclear.
  • This method is especially useful when you don’t have any objective data to assess.

➡️ Tips To Implement: 

  • Make a list of the options you’ll compare (elements as A, B, C, D, E for example).
  • By applying the formula 5(5-1)/2, there will be a total of ten pairs to compare.
  • Make a table with six rows and seven columns.
  • Compare element “A” to elements “B,” “C,” “D,” and “E,” and set “point” in each column.
  • Finally, add up the totals of all the values for each of the variables to combine the findings. You might choose to translate these numbers to a percentage of your overall score.

💡 Interesting Fact: 

The origin of the paired comparison method can be traced back to it was first use in the mid-1800s.

7️⃣ Field Review Method

This method is based on the supervisor’s assessment of the employee’s performance, behaviour, and skills. The HR professional invites seniors to respond to questions about the employee’s job and then evaluates the person based on the feedback obtained from managers. This is an evaluation conducted by someone outside of the employee’s department.

➡️ Useful For:  

Managerial level promotions or when a comparable analysis is needed.

➡️ Pros:

  • Reduces the chances of biased performance reviews. 
  • Useful for managerial level performance evaluations.

➡️ Cons: 

  • Outsiders are generally not familiar with employees’ performance; hence, the review might be inaccurate.
  • Observation of actual employee behaviours is not possible.
  • Highly time-consuming process.
  • The process is not very employee-friendly. 

➡️ Tips To Implement: 

  1. Prepare a set of predetermined questions to assess the talents and abilities of an employee.
  2. Interview the employee and ask questions.
  3. Record the responses of the employee. 
  4. Based on the interview, assign a rating to the employee.
  5. Take the manager’s review into account before calculating the final rating. 

💡 Interesting Fact: 

The field review method is considered to be one of the oldest methods of performance appraisals. 

Drawbacks of Traditional Performance Appraisal Methods 

These methods are highly subjective. The performance appraisal is dependent on the appraiser’s judgement, which is subject to favouritism and bias. Because the reviewer has not gotten enough job training, he is unable to effectively assess the performance of others.

These performance appraisal techniques have several flaws, which include the following:

traditional methods of performance-appraisal
Drawbacks Of Traditional Performance Appraisal Methods

1️⃣ Halo Effect:

This is one of the major drawbacks of traditional performance appraisal methods. When appraisers allow one significant attribute to affect their performance evaluation process, the phenomenon is known as the halo effect. Regardless of the employee’s performance, the appraiser assigns the same scores to all factors. 

2️⃣ Leniency and Strictness:

The appraisers have different tendencies when it comes to rating. Some are more liberal, while others are more rigorous. The evaluator’s habits mirror their rating of employees. You may have noticed that a lenient evaluator gives the employees good scores, whereas the stricter one gives them low scores for their performance.

3️⃣ Central Tendency:

When the evaluator lacks appropriate knowledge about the employee and his performance and the time to devote to the performance appraisal process, he may play it safe and rate all employees’ performance as average. This propensity is a major flaw in the performance evaluation system.

4️⃣ Personal Bias & Favouritism:

The evaluator’s bias towards employees based on sex, religion, caste, color, or status is fairly widespread. This makes objective appraisal difficult. The evaluator can be swayed by the member’s seniority and give him a high rating. Some supervisors want to purposely rate their subordinates low so that they can outperform them.

Conclusion

You can use any of these methods to evaluate employee performance, however, the majority of these traditional performance appraisal methods are subjective.

But worry not, by using a performance management system, you can make performance appraisals easy-peasy and fruitful at the same time. 

Wondering how performance management software can come to your rescue? 

Read This: Features of Performance Management System | Zimyo HRMS

This blog will give you detailed information about how a performance management system can prove to be beneficial for your organization. 

FAQs

1️⃣ Are traditional performance appraisal methods still relevant today? 

The answer to this question may vary from organization to organization. There are many small-sized enterprises that rely on traditional methods of performance appraisal. This is because the use of modern tools such as performance management software can be costly for them. Also, startups or small businesses have small teams so they don’t quite feel the need for having a modern performance management system at their disposal. But, most tech giants or megacorporations such as Google, Deloitte, Facebook, etc. are using modern performance management tools to evaluate employee performance. 

2️⃣ What are the objectives of performance appraisals? 

The objectives of performance appraisals are to:

1. Evaluate an employees’ potential based on skills such as quality of work, leadership style, creativity, and interpersonal skills. 

2. Improve the quality of projects or deliverables by helping analyze their strengths and weaknesses. 

3. Boost the overall efficiency of the team by identifying the roadblocks and offering help in time. 

4.  Set measurable and attainable goals to help employees work on something meaningful. 

5. Gather performance data to make informed decisions regarding salary hikes, promotions, incentives, or even terminations. 

6.  Conduct skills gap analysis and identify training needs for employees. 

7. Boost employee engagement, satisfaction, and retention by fostering a culture of reward and recognition, and encouraging professional development. 

3️⃣ How can organizations make their performance appraisal process fair and inclusive? 

✅ Continuous feedback

Gone are the days when annual performance reviews were important for the performance review process. Today, organizations must focus on holistic performance management. Instead of yearly reviews, they must focus on weekly, monthly, or quarterly performance reviews. 

360-degree feedback

The 360-degree feedback approach ensures fairness and transparency in the performance review process. In this process, the employees receive feedback from peers or subordinates. You can use 360-degree feedback software to exchange constructive feedback. 

✅ Pay as per performance

You must reward your high performers not only to motivate them but also other members of the team. When you appreciate employees and offer the pay they deserve, they feel more productive, engaged, and satisfied with their work. 

✅ Don’t punish, instead, uplift

You can use the performance review process as an opportunity to uplift the poor performers in your organization. So don’t punish people for bad performance as there could be hundreds of valid reasons for that, instead, you need to have frequent one-on-ones with your employees to understand their challenges. You can make a difference in their performance by equipping them with all the necessary resources or help they need to perform better. 

✅ Allocate projects based on potential not on experience

As managers, you must also ensure that there is a fair allocation of projects. You must assign responsibilities to qualified candidates even if it means disregarding the seniority level of an employee. This way you are giving fair and equal opportunities to all the team members to grow in their respective fields. 

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