Performance Evaluation is the methodical assessment of the performance of employees and to understand the abilities of a person for further development and progress. It is also known as performance rating, employee assessment, performance review, merit rating, etc.
Methods of performance evaluation: To evaluating the performance of employees organization, at first establish a performance benchmark and after training the employees, the organization evaluates whether employees are skilled enough or not. Methods of performance evaluation can be categorized into two ways:
(A) Individual performance evaluation method: When the performance of the job is to evaluate individually is known as individual performance evaluation.
Confidential report: a Confidential report is known as ACR (Annual Confidential Report). It is prepared annually. The immediate supervisor maintains a diary to note the employees’ performance. On the basis annual confidential report’s employees promotion, bonus, termination, demotion decided.
Essay method: The essay or free-form appraisal method requires the manager to write a short essay describing each employee’s performance during the rating period. The rater usually is given a few general headings under which to categorize comments.
Critical incident method: In the critical incident method, the manager keeps a written record of both highly favorable and unfavorable actions in an employees’ performance. When a critical incident involving an employee occurs, the manager writes down. The critical incident method can be used with other methods to document the reasons why an employee was rated in a certain way.
Checklist method: The checklist is composed of a list of statements or words. Raters check statements most representative of the characteristics and performance of employees.
Graphical rating scale: Graphical rating scale is a scale that lists a number of traits and a range of performance for each that is used to identify the score that best describes an employee’s level of performance for each trait.
Behavioral rating scale: Behavioral rating scale attempt to assess an employee’ behaviors instead of other characteristics. Some of the different behavioral approaches are behaviorally anchored rating scales, behavioral observation scales.
Management by Objectives (MBO): Management by objectives specifies the performance goals that individual hope to attain within an appropriate length of time. The objectives that each manager sets are derived from the overall goals.
(B) Multiple person evaluation methods:
In this case, an individual’s performances are evaluated by comparing with others performance.
Ranking method: The ranking method consists of listing all employees from highest to lowest in performance. The primary drawback of the ranking method is that the size of the differences among individuals is not well defined.
Forced distribution: Forced distribution performance appraisal method in which ratings of employee’s performance are distributed along a bell-shaped curve. It similar to grading on a curve; pre-determined percentages of rates are placed in various performance categories.