What is Performance Evaluation ?

Performance Evaluation is a structured process in which employees job performance is evaluated in relation to the projects on which they have worked and their contribution to the organization. It is also known as an annual review or performance review.  Performance evaluation can take place both in people management and in the examination of the financial result of a company.

An employee appraisal is based on various methods of performance evaluation in an organization. Manager judges an employee’s performance by using any one method from the performance evaluation, but when a manager uses multiple evaluation methods they are able to get a broader picture of the areas where the employee needs to work on for improvement and what advice you should make to support employee development. It is preferable to utilize multiple methods to get the most accurate results. Of course, each method brings with it hesitation regarding validity and effectiveness. For that reason, below is a guide to help you better understand different methods.

Now, let’s discuss the most effective methods of evaluation for employee performance:

Self – Evaluation Method –

Self-evaluation is a crucial activity to help make your appraisal process more efficient. This method offers a chance for employees to play an active role in their performance review process. The self-evaluation is often effective when teamed up with a performance review. The employee is asked to evaluate his own performance by using a form that requires multiple choice answers, essay type answers or a merger of the two. One of the advantages of a self- evaluation is that you can compare the self-evaluation to your own appraisal and see the areas where there is an inconsistency in an understanding of employee performance. This opens up conversations and a direct link between staff and management. 

360 – Degree Feedback Method – 

360 Degree Feedback is a system or process in which employees are given personal, anonymous feedback from the people in the workspace which includes the employee’s manager, peers, and direct reports. It provides a chance for all employees to give in their views and contribute towards the objective of the organization. Also, 360-degree feedback reviews can insert an evaluation of the employee’s character and leadership skills. An ongoing process, like 360-degree feedback, can help employees stay motivated at their workplace. This is one of the most widely used performance evaluation methods.

Management by Objective (MBO) Method  –

The management by objectives (MBO) performance evaluation method is a modern way to performance reviews. It is a process where the managers and subordinates acknowledge common goals and mark the employees responsibility individually towards achieving those goals. It is a mutual goal setting method, along with setting these goals, the key component of the MBO method is a constant performance review session that happens between managers and subordinates. This helps in assessing the growth consistently.

Behaviorally Anchored Rating Scale (BARS) Method –

Behaviourally Anchored Rating Scales (BARS) are conceived to bring the advantages of both qualitative and quantitative data to the employee performance evaluation process. BARS differentiate an individual’s performance against certain examples of behaviour that are anchored to numerical ratings. For example: A level four rating for a nurse may require her to show sympathy to patients while a level eight rating may require her to show higher level of sympathy and this is reflected in all their action and communication with patients.

Psychological Evaluation Method – 

Psychological appraisals are useful to discover the hidden potential of employees. This technique focuses on examining an employee’s future performance rather than their past performance.  Here the psychologist conducts the in-depth interviews, psychological tests, discussions with the supervisors and the reviews of other evaluations. This judgment is done to discover the psychological, emotional, motivational and other related qualities of an employee that is essential to forecast his potential for the future performance.