Varieties of performance review

Employee Performance Appraisal

There are different modalities of preformance reviews on the basis of how performances are judged and who is making judgments.

Varieties of performance judgment

• In relative judgments supervisors compare employees to one another.  A common form of relative comparisons is to rank employees from the best to the worst in a work group.  The main benefit of this system is that it prevents superiors from rating everyone the same, which would destroy the system’s value.   However, many experts believe that relative judgment systems have serious shortfalls.  Relative judgments can create conflict between supervisors and subordinates or dysfunctional behaviors because they make supervisors compare subordinates with each other in a forced-distribution rating.  This system also makes it impossible to compare individuals across groups.

• In an absolute judgment system, supervisors compare an employee’s performance to written standards. The performance criteria for a specific job are listed, and supervisors rate employees on each criterion.  Absolute rating systems enable comparisons among employees in different groups.  Many organizations use absolute comparisons because written standards make it clear what employees must do to earn rewards.  Absolute comparisons fall into three categories: trait, behavioral and outcome appraisals.

• Trait appraisals refer to performance measurements that emphasize the personality of an employee.  Trait measurements are ambiguous, susceptible to biases and inconsistent across supervisors.

• Behavioral appraisals refer to observable actions.  Managers assess whether an employee exhibits specific behaviors such as cooperation or punctuality when performing his or her job.  Behavioral standards are concrete and provide workers with specific examples of behaviors to continue or to avoid.

• Outcome appraisal measurements ask managers to assess the results achieved by an employee such as sales or production.  The most common is management by objectives, in which employees and superiors set goals together for the upcoming evaluation period and then measure the degree to which the employee achieved the goals.  This method provides unambiguous criteria that are not susceptible to biases.  However, it also can lead to a mentality of “results at any cost” or not reflect on-the-job problem solving.

Varieties of view point of performance appraisal

• Immediate-supervisor review is the most common form of appraisal.  Many organizations assume that the immediate supervisor knows the subordinate’s performance better than anyone else does.  However, appraisals by only the immediate supervisor may have drawbacks: The supervisor may lack interpersonal communication skills or may intimidate the subordinate because the superior controls rewards and punishments.

• Self-review is a performance appraisal system in which workers rate themselves.  Many organizations that use management-by-objective measurements have adopted the self-review as a way of having subordinates set goals in hopes that they become more committed to the goals.

• Peer review is a performance appraisal system in which workers at the same level in the organization rate one another.  Peer reviews are particularly useful when the teamwork is important.  They tend to be very valuable because they often have more opportunities to observe employee performance than supervisors do and they are perceived by employees as a credible source.  However, validity of peer reviews decreases if employees compete for rewards.

• Subordinate review is a performance appraisal system in which workers review their supervisors.  It can be good evaluation information for managers.  Appraisals by subordinates may make supervisors more aware of how they are perceived or if their instructions are unclear.  The validity of appraisals by subordinates is significantly diminished when they are not anonymous.

• Appraisal by beneficiaries is appropriate in certain contexts such as when beneficiary service is important.  Beneficiary feedback can be important for learning.
  

A growing trend is for organizations to use 360º feedback, which seeks feedback from all relevant sources such as supervisors, peers, team members, beneficiaries, suppliers and oneself

Two reasons have fueled the popularity of 360º performance appraisals. 

1. First, as organizations have become flatter and have fewer managerial levels, more employees report to one supervisor.  Therefore, the supervisor alone may not be able to assess every subordinate’s performance accurately. 

2. Second, more organizations emphasize teamwork.  When a organization encourages teamwork and embraces participative management, then it may be more appropriate to adopt 360º performance appraisals. 

The shift to 360º feedback includes another benefit.  An employee may ignore feedback from only one person, but s/he cannot as easily discount feedback from many sources.

Organizations can save money and reduce the time required to complete a 360º appraisal by using an online system for administering it.  Computerizing the system saves time for evaluators by making the process easier and quicker to complete.  A organization that used a paper-and-pen system needed three full-time employees for every 1,000 participants.  After switching to an online system, the organization needed only one employee for every 2,000 participants.  Organizations also can establish contracts with outside entities who specialize in offering online systems for 360º appraisals, saving the time and money of developing a program internally.