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Types of Performance Appraisal Systems
Rating Scales
Personal Comparison OR Ranking Systems
Critical Incident Technique
Behavioral Checklists and Scales
Management by Objective
360-Degree Feedback or Multirater Assessment
RATING SCALES
In this system the employee is given a numerical rating. This rating can be given on a graphic rating scale with the supervisor simply making a mark on the scale that rates the employee.
Rating Scales
The rating scale method offers a high degree of structure for appraisals. Each employee trait or characteristic is rated on a bipolar scale that usually has several points ranging from "poor" to "excellent" (or some similar arrangement).
The traits assessed on these scales include employee attributes such as cooperation, communications ability, initiative, punctuality and technical (work skills) competence. The nature and scope of the traits selected for inclusion is limited only by the imagination of the scale's designer, or by the organization's need to know.
The one major provision in selecting traits is that they should be in some way relevant to the appraisee's job. The traits selected by some organizations have been unwise and have resulted in legal action on the grounds of discrimination.
Advantages
The greatest advantage of rating scales is that they are structured and standardised. This allows ratings to be easily compared and contrasted - even for entire workforces.
Each employee is subjected to the same basic appraisal process and rating criteria, with the same range of responses. This encourages equality in treatment for all appraisees and imposes standard measures of performance across all parts of the organization.
Rating scale methods are easy to use and understand. The concept of the rating scale makes obvious sense; both appraisers and appraisees have an intuitive appreciation for the simple and efficient logic of the bipolar scale. The result is widespread acceptance and popularity for this approach.
Disadvantages
Trait Relevance
Are the selected rating-scale traits clearly relevant to the jobs of all the appraisees? It is inevitable that with a standardised and fixed system of appraisal that certain traits will have a greater relevance in some jobs than in others.
For example, the trait "initiative" might not be very important in a job that is tightly defined and rigidly structured. In such cases, a low appraisal rating for initiative may not mean that an employee lacks initiative. Rather, it may reflect that fact that an employee has few opportunities to use and display that particular trait. The relevance of rating scales is therefore said to be context-sensitive. Job and workplace circumstances must be taken into account.
Systemic Disadvantage
Rating scales, and the traits they purport to measure, generally attempt to encapsulate all the relevant indicators of employee performance. There is an assumption that all the true and best indicators of performance are included, and all false and irrelevant indicators are excluded.
This is an assumption very difficult to prove in practice. It is possible that an employee's performance may depend on factors that have not been included in the selected traits. Such employees may end up with ratings that do not truly or fairly reflect their effort or value to the organization. Employees in this class are systemically disadvantaged by the rating scale method.
Perceptual Errors
This includes various well-known problems of selective perception (such as the horns and halos effect) as well as problems of perceived meaning.
Selective perception is the human tendency to make private and highly subjective assessments of what a person is "really like", and then seek evidence to support that view (while ignoring or downplaying evidence that might contradict it).
This is a common and normal psychological phenomenon. All human beings are affected by it. In other words, we see in others what we want to see in them.
An example is the supervisor who believes that an employee is inherently good (halo effect) and so ignores evidence that might suggest otherwise. Instead of correcting the slackening employee, the supervisor covers for them and may even offer excuses for their declining performance.
On the other hand, a supervisor may have formed the impression that an employee is bad (horns effect). The supervisor becomes unreasonably harsh in their assessment of the employee, and always ready to criticize and undermine them.
The horns and halo effect is rarely seen in its extreme and obvious forms. But in its more subtle manifestations, it can be a significant threat to the effectiveness and credibility of performance appraisal.
Perceived Meaning
Problems of perceived meaning occur when appraisers do not share the same opinion about the meaning of the selected traits and the language used on the rating scales.
For example, to one appraiser, an employee may demonstrate the trait of initiative by reporting work problems to a supervisor. To another appraiser, this might suggest an excessive dependence on supervisory assistance - and thus a lack of initiative.
As well, the language and terms used to construct a scale - such as "Performance exceeds expectations" or "Below average skill" - may mean different things to different appraisers.
Rating Errors
The problem here is not so much errors in perception as errors in appraiser judgement and motive. Unlike perceptual errors, these errors may be (at times) deliberate.
The most common rating error is central tendency. Busy appraisers, or those wary of confrontations and repercussions, may be tempted to dole out too many passive, middle-of-the-road ratings (e.g., "satisfactory" or "adequate"), regardless of the actual performance of a subordinate. Thus the spread of ratings tends to clump excessively around the middle of the scale.
This problem is worsened in organizations where the appraisal process does not enjoy strong management support, or where the appraisers do not feel confident with the task of appraisal
PERSONAL COMPARISON OR RANKING SYSTEM
In this system employees are rated in comparison with each other. A number is given which supposedly indicates where each employee ranks in comparison to all the other employees.
CRITICAL INCIDENT TECHNIQUE
Employee’s performance in specific situations are evaluated and a number of these incidents are used in the overall rating of the employee.
BEHAVIORAL CHECKLISTS AND SCALES
The supervisor uses a list of descriptive statements and marks the statement that most closely describes the employee. Statements are for specifically defined aspects of a job.
MANAGEMENT BY OBJECTIVE
The employee is appraised according to how well they have reached agreed to goals. Employee and supervisor must agree on measurable objectives and how they will be met.
360-DEGREE OR MULTIRATER-REVIEW-FEEDBACK
Employees are rated by peers, team members, subordinates, and sometimes customers along with supervisors. A study by William M. Mercer reports that more than 40% of companies will use this method by the end of 1997
Rgds,
John N