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There are a number of common appraisal methods to assess employee performance. However, each method has their own pros and cons. To determine which works best for your company, you have to first understand the methods of appraising performance. It is something that should motivate an employee to perform better. Here are some of the finer points in Performance Appraisals and their methods. 

Comparison Methods

These are one of the oldest methods used for Performance Appraisals. The Multiperson Comparison method and Forced Distribution methods are two common comparison appraisal techniques. The Multiperson Comparative method compares each employee with other employees present in the same team and depending on their comparative performance to the employee who has performed the best, appraisals are given. The forced distribution method is something that requires the supervisor to assess each employee based on certain pre-determined parameters, and then rank them into 3 or more categories (like excellent, good or poor). This allows a manager to communicate to an employee the areas in which they over or underperform relative to others in similar positions.

Pros: Motivates performance in competitive workplaces and among competitive employees.

Cons: Potential of in-fighting and lack of harmony in your teams can rise.

Rating Scales

The Graphic Rating scale and Behavioral Rating scale are two common rating scale appraisal techniques. Graphic Rating Scale has traits or behaviors that are important for effective performance which gets listed out and each employee is rated against these traits. It helps employers to quantify the behaviors displayed by its employees. Employees get assigned a score on criteria important to job success. The Behavioral Rating Scale obtains the perceptions or judgments of a subject’s behavior in a standardized format (i.e. focusing on actual behaviors).

Pros: Easy to use and understand. They offer a simple way to communicate areas of strengths and weaknesses.

Cons: Making assumptions that they are directly tied to an employee’s raise or bonus. This can cause score inflation. Managers can also have a negative bias toward employees.

Narrative Techniques

The Narrative Technique and Critical-independent Method involve more details analyses of job performance. The Narrative Technique of documenting and reviewing performance involves “writing a story” to describe the performance of an employee. The Critical-independent method involves keeping a running log of the positive and negative performance and behaviors of the employee. 

Pros: This has thoroughness of detail in analyzing employee behaviors. You can also focus on praising positive behavior and addressing areas for correction.

Cons: The reaction of the employee might be an issue. He/she may interpret the evaluation too positively or too negatively relative to a scoring system.

360 Feedback

This method has employees getting evaluated by colleagues, customers, subordinates, other interested parties, and supervisors. This method is responded to by each individual in a self-assessment. It is a way to provide feedback that is based on behaviors that other employees can see.

Pros: It offers employees a glimpse of how others view their performance in various relationships critical to their job. It also allows a better chance to compare different perspectives in the evaluation process.

Cons: This kind of method may cause biased evaluators, poor alignment with goals and negative employee feelings. 

A well-managed performance appraisal encourages managers and employees to take a team approach when setting goals and objectives, and discuss any work issues and concerns. Through regular appraisals, employees gain insight into areas that need improvement or strengths they can enhance. A good performance appraisal and meeting with the manager can also help a person make career plans with the company or focus on opportunities for growth.
A small caveat to traditional performance appraisal is that sometimes it is not a good fit for companies based on their work culture. So these companies have already eliminated the once-a-year performance appraisal and replaced it with quarterly employer-manager reviews, peer reviews, self-reviews and team performance reviews where work appraisals become a regular, less intimidating event.


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