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How to conduct performance appraisal

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I. Contents of getting how to conduct performance appraisal

Managers and employees alike often dread annual performance reviews, but when they are done
well those reviews can help your business.
Employee reviews are one of the best management tools people have to improve performance,
says Sharon Armstrong, an HR consultant with 20 years of experience and author of The
Essential Performance Review Handbook.
Employees, supervisors, and companies all benefit from performance appraisals. Employees
generally want to understand their employers expectations and have a manager who talks with
them about their progress, encourages their development, and provides opportunities for them to
grow, Armstrong explains. Research shows that those conditions increase employees
productivity and job satisfaction.
Supervisors can use performance reviews to develop their management skills, identify training
needs, and build rapport with employees. And the business owner or manager can gather
objective information for making decisions about raises, promotions, training, and other
personnel actions, she says.
To be effective, however, performance appraisals shouldnt be a standalone annual event but
rather a culmination of workplace conversations, Armstrong says. Even during job interviews,
employers should talk about the standards and goals for a position. They should share their

performance review form with employees during orientation and discuss in detail what they
To make the whole process practical and painless, follow these guidelines:
1. Develop the habit of delivering feedback frequently. When you see it, say it is a good
mantra for managers to follow in discussing performance with employees, Armstrong says.
Dont wait for formal reviews to praise or critique performance. Walk around and talk with
employees about their work, or set regular times to briefly discuss progress, such as a weekly
check-in. The only annual aspect of your performance-review system might be filling out a
specific form on a work anniversary or implementing raises.
2. Document performance. Armstrong advises managers not to put anything on a performance
appraisal that they have not personally seen. Throughout the year, as you talk with employees
about performance, jot down notes for yourself. At review time, you will have a full view of the
employees work, untainted by recent events or selective memory, and you will be able to
support your rating of the employee. Nothing makes a performance appraisal more credible than
having it chock-full of examples, she says.
3. Cover the ABCs on your review form. An up-to-date job description will help you decide what
to include in the appraisal. A performance review should be accurate, behavioral, complete, and
consistent, providing a fair and objective assessment based on the employees job and goals,
Armstrong says. (Learn how to avoid four common mistakes in our previous post Is Your
Performance Review Doing Harm or Good?)
4. Hold a discussion. Armstrong recommends that managers have their performance appraisal in
draft form when meeting with employees. Dont hand the employee a completed form to read
before the meeting when you arent there to put the comments in context. The manager and
employee should discuss the appraisal together, and if the employee has completed a selfappraisal, discuss where the two differ. The manager can complete the form after taking time to
consider the employees comments.
5. Ask the employee for feedback. Remember that you have a role in the employees
performance, too. Armstrong suggests asking questions such as What three things have I done
recently to help your performance? and What are three things that you want me to do?
6. Set goals. Use the review to clarify the employees role at the company. Update his or her job
description, if necessary, and set employee goals that are meaningful, measurable, and
motivating. When the employee has goals that are aligned with the companys goals, Armstrong
says, Thats a real motivator.

7. Allow the employee to comment. Create a section on the review form for the employees
response and ask the employee to sign the appraisal. The signature documents that the employee
received the review, even if he or she didnt agree with its contents, Armstrong explains.
However, if you have held frequent conversations about performance throughout the year, the
annual review wont contain any surprises.

III. Performance appraisal methods

1. Essay Method
In this method the rater writes down the employee
description in detail within a number of broad categories
like, overall impression of performance, promoteability
of employee, existing capabilities and qualifications of
performing jobs, strengths and weaknesses and training
needs of the employee. Advantage It is extremely
useful in filing information gaps about the employees
that often occur in a better-structured checklist.
Disadvantages It its highly dependent upon the writing
skills of rater and most of them are not good writers.
They may get confused success depends on the memory
power of raters.

2. Behaviorally Anchored Rating Scales

statements of effective and ineffective behaviors
determine the points. They are said to be
behaviorally anchored. The rater is supposed to
say, which behavior describes the employee
performance. Advantages helps overcome rating
errors. Disadvantages Suffers from distortions
inherent in most rating techniques.

3. Rating Scale

Rating scales consists of several numerical scales

representing job related performance criterions such as
dependability, initiative, output, attendance, attitude etc.
Each scales ranges from excellent to poor. The total
numerical scores are computed and final conclusions are
derived. Advantages Adaptability, easy to use, low cost,
every type of job can be evaluated, large number of
employees covered, no formal training required.
Disadvantages Raters biases

4. Checklist method
Under this method, checklist of statements of traits of
employee in the form of Yes or No based questions is
prepared. Here the rater only does the reporting or
checking and HR department does the actual evaluation.
Advantages economy, ease of administration, limited
training required, standardization. Disadvantages Raters
biases, use of improper weighs by HR, does not allow
rater to give relative ratings

5.Ranking Method
The ranking system requires the rater to rank his
subordinates on overall performance. This consists in
simply putting a man in a rank order. Under this method,
the ranking of an employee in a work group is done
against that of another employee. The relative position of
each employee is tested in terms of his numerical rank. It
may also be done by ranking a person on his job
performance against another member of the competitive
Advantages of Ranking Method
Employees are ranked according to their
performance levels.
It is easier to rank the best and the worst
Limitations of Ranking Method
The whole man is compared with another
whole man in this method. In practice, it is very difficult
to compare individuals possessing various individual
This method speaks only of the position where an
employee stands in his group. It does not test anything
about how much better or how much worse an employee
is when compared to another employee.
When a large number of employees are working,
ranking of individuals become a difficult issue.
There is no systematic procedure for ranking
individuals in the organization. The ranking system does
not eliminate the possibility of snap judgements.

6. Critical Incidents Method

The approach is focused on certain critical behaviors of

employee that makes all the difference in the
performance. Supervisors as and when they occur record
such incidents. Advantages Evaluations are based on
actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases,
chances of subordinate improvement are high.
Disadvantages Negative incidents can be prioritized,
forgetting incidents, overly close supervision; feedback
may be too much and may appear to be punishment.

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