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Graphic rating scales: This method involves assigning some form of rating system to pertinent traits. Ratings can be numerical ranges (1-5), descriptive categories (below average, average, above average), or scales between desirable and undesirable traits (poor ↔ excellent). This method can be simple to setup and easy to follow, but is often criticized for being too subjective, leaving the evaluator to define broad traits such “Leadership ability” or “Conformance with standards” (Kulik, 2004).

Behavioral methods: A broad category encompassing several methods with similar attributes. These methods identify to what extent an employee displays certain behaviors, such as asking a customer to identify the usefulness of a sales representative’s recommendation. While extremely useful for jobs where behavior is critical to success, identifying behaviors and standards for employees can often be very time consuming for an organization (Kulik, 2004).

2+2: A relative newcomer in performance appraisal methodology, the 2+2 feedback system demonstrates how appraisals can be used primarily for improvement purposes. By offering employees two compliments and two suggestions for improvement focused around high-priority areas, creators Douglas and Dwight Allen suggest that organizations can become “more pleasant, more dynamic, and more productive” (Formula 2+2, 2004). If the goal of the performance appraisal is employee improvement, this system can provide significant benefits; however, if the goals are more akin to compensation changes and rankings, the system provides little benefit.

Appraisal methodologies depend greatly on the type of work being done; an assembly worker will require a considerably different appraisal system than a business consultant. Significant planning will be required to develop appropriate methods for each business unit in an organization in order to obtain maximum performance towards the appraisal goals.

Performing the appraisal

Performing an appraisal on employees can be nerve racking for both parties if the situation is not handled correctly, and is thus seen as one of the most difficult tasks managers face. There are many acts a manager can perform to make the process easier on both parties, and hopefully, mutually beneficial.

Many assume that performance appraisals are meant to identify weaknesses to be worked on, and exposing these weaknesses can be painful for employees. Martha Craumer suggests that organizations should be leveraging the strengths of each employee rather than focusing on their weaknesses. By “encouraging and developing what people do well naturally…the organization could become more efficient by allowing their people to do what they do best” (Craumer, 2001).

The frequency of appraisal can be a notable factor in ongoing development. Yearly performance reviews are becoming increasingly rare as companies begin to see the benefits of frequent appraisal. Susan Heathfield suggests that quarterly performance development meetings can allow for clear direction towards performance goals (Heathfield, Performance Management is NOT an Annual Appraisal). Constant tuning of performance can be much more effective than annual overhauls.

Questions & Answers

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Differences Between Laspeyres and Paasche Indices
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