Three Methods of Performance Appraisal in HR Management

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Table of Contents

Forced ranking/distribution performance appraisal method
Management by objectives (MBO) performance appraisal method
360-Degree performance Appraisal
Conclusion
Works Cited

Performance appraisal is a process in which an employ contribution and worth to an organization is valued using accepted performance appraisal methods. There are a number of performance appraisal methods notably essay, forced distribution, graphic ranking scale, and behavioral anchored rating scale appraisal methods.

However, this report is going to give much credence to the management by objective method, 360-degree performance appraisal, and forced ranking/distribution performance appraisal. A detailed explanation of the three methods will be done bringing into perspective features that these three performance appraisal methods share in common and how they contrast to each other (Stone 1).

Forced ranking/distribution performance appraisal method

This performance appraisal method tries to order employees by comparing them to their colleagues. This helps in assessment of employees divorced from the usual specific judgments done on basis of job components.

When straight ranking is to be done it is expected of the evaluator in terms of those who have the best attributes to those who have the worst attributes and those who are effective in their daily undertakings to those who are least effective in the way they do their job.

It is imperative in this respect that a criterion is used. Alternative ranking slightly differs from straight ranking in the sense that it has to be done in a specific manner. Ranking like any other comparative evaluation system is fast becoming unpopular because it is discriminatory.

This is so because even if employees perform well, a group will always find itself at the bottom and another group highly ranked. Ranking can also not be used to fairly compare employees across different groups, it is absolutely difficult to conclusively say that an employee ranked second in unit X is as good as or better than that employee who has been ranked second in unit Y.

Nevertheless, if an organization has limited resources with which they can conduct other performance appraisal methods, the best performance appraisal they can make use of is the ranking method because it can successfully help in differentiating among employees (Stone 1).

In forced distribution, evaluators tend to rate subordinates in a given distribution. Forced distribution can be used in evaluation of myriad components of job performance as opposed to the ranking method that uses only one component.

Forced distribution method is strictly used by managers who undertake to rate his or her subordinates in a given distribution. Some subordinates will fall into 10 percent low category, others in 20 percent below average, others 40 percent average, others 20 percent above average, and finally 10 percent high category.

If there were 20 subordinates, 2 of them will be in the low category, 4 below average, 8 of them in the average, 4 in the above average category, and finally, 2 in the highest category. Forced distribution helps to eliminate errors that arise due to rating. These errors are normally attributed to leniency and central tendency. However, forced distribution can cause some grave rating inconsistencies because it tends to discriminate employees in cases where job performance is quite similar.

This has caused a problem of acceptability of the results by the raters and ratees hence its unpopularity with this category of people. Problems of acceptability have been grave in circumstances where group members all have high ability (Stone 1).

Management by objectives (MBO) performance appraisal method

This performance appraisal method has much to do with the evaluator setting up specific measurable goals with employees. The evaluator has to periodically discuss with the employee if he or she is meeting these goals that he or she set to achieve.

This performance appraisal program has six main steps that have to be adhered to. Featuring prominently among these steps is the need for setting up the organizations goals.

The organization should come up with a clear cut plan for what they intend to do in the next year and stipulate goals that have to met. Secondly, various organizational departments must come up with their departmental goals. This is the duty of the heads of the departments and their superiors.

Thirdly, the conceived department goals have to be discussed and allocated. It is at this stage that the subordinates in the department have to be brought on board. It is important that these subordinates come up with their own individual goals to make sure that every member of the department has an input into attainment of departmental goals.

As a matter of fact, expected results have to be defined by setting individual goals. Heads of departments and their subordinates have to come up with performance targets that are short term. A review of the performance has to be done and results subsequently measured.

It is the role of departmental heads to measure up actual performance of every member of staff with the projected results in their minds. Finally, there has to be a feedback mechanism where heads of departments conduct performance review periodically with their subordinates with a view to discussing and evaluating progress made towards achieving the set out goals and objectives (Stone, 11).

This method of performance appraisal enhances better communication and coordination in an organization because of frequency within which reviews are conducted hence harmonious relationships.

360-Degree performance Appraisal

In this method, the performance of an employee is evaluated by consulting different types of people (Farhaan, para. 1). These may be an organization’s customers, its suppliers, and an employee’s peers.

Direct reports can also be used. If the performance of a manager is to be appraised using this method, it is the work of the employees to give an upward feedback on how this manager manages them. This performance appraisal method requires the human resource managers to coordinate the whole process to dispel fears associated with the leakages of ones performance among his or her peers.

This can be very disappointing within an organization. This method of performance appraisal is mainly conducted to find the gap between ones own appraisal and how others may feel about it. This is critical in analyzing ones strengths and weaknesses and how this can help in improving his or her own performance. The system helps in elimination of biases among employees that is inherent with the forced distribution method.

It is imperative to note that the system has got its own shortcomings in the sense that if many employees are unhappy it is likely that they can become potential targets. It is therefore important that a right culture is inculcated into an organization before this method of performance appraisal is made use of.

This performance appraisal consumes a lot of time and its complexity may eat into an organization time and resources. Its results are always very difficult to interpret. The feedback that is continually received after the evaluation can intimidate the employees and in the process interfere with their output.

Conclusion

Despite the fact that Forced ranking/distribution performance appraisal method tends to discriminate against employees, 360 degree performance appraisal and MBO also have their weaknesses.

The feedback that is continually received in 360 degree performance appraisal interferes with an employee’s morale and can interfere with their performance. MBO enhances cohesiveness in an organization because of the frequent reviews.

Works Cited

Farhaan, Panagar. 360 Degree Performance Appraisal. 2009. Web.

Stone, Thomas. Understanding Personnel Management. New York: Dryden Press, 2002. Print.

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