Types of Performance Appraisals and their Importance

Types of Performance Appraisals

Keeping a track of the employees in an organization is the first step towards successful human resource development. HR managers should be aware of the capabilities of their employees. But, how does one achieve this? The answer is simple, by simply evaluating the employees based on how they perform in the organization. 

The traditional methods of performance appraisal, without any doubt, were cumbersome. We have nobody, but IT to thank for developing software tools that have enabled us to reform our performance management systems. While employees might still seek some manual attention, a chunk of the work is conveniently done by offering performance appraisals to the employees.

Objectives of performance appraisal

The main objective of the performance appraisal tool is to evaluate the performance of the employees so that appropriate training and development strategies can be structured to boost productivity in the organization. Its objectives are numerous and each is as crucial as employee performance management. 

  • To determine the type of training an employee requires to brush up his skills
  • To identify the weaknesses and strengths of the employees so that the right job profile can be designed for them
  • To maintain records
  • To include a feedback system where employee performances can be evaluated
  • To organize promotional programs based on employee performances

Types of performance appraisals systems

Different types of performance appraisal systems are available to us today. These are designed such that different PMS focus on the needs of different post-holders in an organization. This endows accessibility to those concerned with an employee’s performance.

  • The 360-Degree Performance Appraisal– This system enables the managers as well as the employee’s colleagues to review an employee’s performance. It also offers employees an opportunity for self-assessment. Self-assessment allows individuals to assess and evaluate their own behavior and job performance. All in all, it serves as a feedback system so that the strengths and weaknesses of an employee can come to light. 
  • General Performance Appraisal– It is ongoing communication between the manager and the employee. At the end of the year, a meeting is held by the manager to determine if the pre-set goals and objectives were met by the employee or not. The managers can also suggest development plans and training programs to the employees that will further help them improve their skills.
  • Administrative Performance Appraisal– The employees are evaluated based on the skills showcased by them and the overall efficiency in completing a task remarkably. 
  • Manager Performance Appraisal– Evaluating the efficiency of the managers is just as vital because, at the end of the day, the performance of managers directly impact the employees’ work. Therefore, a system that focuses on a manager’s performance is equally crucial. Generally, feedbacks are anonymously drafted for this purpose. 
  • Employee Self-Appraisal– Self-assessment can help the employees to identify the loopholes in their performance. It can also be compared with the assessment that is taken by the manager and the comparison can help healthily resolve issues. 
  • Project Review– As the title suggests, this system focuses on the evaluation of the employee’s performance during a particular project. It is a continuous process in which a performance assessment is conducted after every project. 
  • Sales Appraisal– This system is based on the idea, ‘the more money the employee makes for the company, the better is his performance. It assesses employees based on the business they bring to an organization. The profits and losses are evaluated for this purpose. This helps to analyze how efficient an employee is at achieving the set goals. 

Importance of types of performance appraisals

Appropriate performance evaluation methods are extremely crucial to boost the productivity of the workforce. The ease with which techniques of performance appraisal in a performance system achieve the target analysis is godly. The importance of types of performance appraisals are:

  • Efficient Feedback System– The regular performance assessments conducted by the 360-degree performance appraisal system serve as an efficient feedback system. Letting the employees know about how they are doing in an organization can boost their motivation and productivity significantly. Such a system helps the employees to excel at their job. 
  • Appropriate Training and Development Strategies– When an employee’s weak points and strengths are identified, an HR manager does not have to struggle much for structuring an effective training process. Performance evaluation tools suggest the most obvious training methods based on the employee’s work behavior. In the long run, such training processes assure employee development.
  • Smart Recruitment– Performance appraisal tools help to predict how a potential candidate will do if hired. This can help to validate the selection process so that only the best talents are hired. 
  • Promotions and Bonuses– An employee of an organization should never feel that there are not enough growth opportunities in the company. To shun this complexity, promotions are crucial. But not every employee in the company deserves a higher job position and that is when performance appraisal comes into play. It recommends the employees suitable to be promoted based on how good they have been performing with the tasks assigned. It also decides the employees that deserve bonuses. 
  • Suitable Job Profile– If the work behavior of an employee is more suitable for another job position, transfers can always be made. This is based on the skills showcased by an employee. 
  • Screening the Employees– If an employee is more of a liability to an organization, layoff decisions can be made based on the underperformance exhibited by the employee. 

Performance management is imperative for an organization, as it helps motivate and guide employees in improving their performance. It assists organizations to encourage the high performers and suggest appropriate development or training programs to the below-average performers. 

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