Enterprises big or small need to have a structured performance evaluation system in place within their human resource department. The reason is quite simple – Performance evaluation methods are necessary for organizations to invest on their talent in order to help them improve their performance and ultimately contribute to the growth story of the enterprise. Few areas where performance review helps organizations in their operations are

  • Deciding on Employee Salary Appraisals
  • Setting new KRA’s and KPI’s for the next appraisal cycle
  • Confirmations of Positions under probation or in Performance Improvement schemes
  • Communication of feedback as well as grievances to stakeholders from employees
  • Identifying areas of improvement and the extent of improvement required
  • Reviewing of effectiveness of HR programs and activities
  • Learning, training and development of existing talent to overcome work challenges
  • Building highly competency teams across all departments

What are some performance evaluation examples?

A typical performance review example would be the case where an employee is evaluated against achievements of his KPI’s and then rated for his KRA’s. Individual parameters of the KPI would be evaluated on a scale that is agreed upon by the candidate and his or her manager. The ratings would be given also after understanding to what extent the employee has achieved their KRA specifics. There are other examples as well but this is by far the most common method to evaluate a candidate or an employee during their performance appraisal period. The evaluation may be carried out every quarter or bi-annual or annually or in some organizations, it is done even on weekly and monthly basis.

Different kinds of Performance Evaluation methods

Over the year’s enterprises have transformed the way in which they assess the skills of their workforce. They have come up with numerous types of employee evaluation methods that are sometimes specific to certain workforce or departments or can be applied in any industry in general. Irrespective of the type of appraisal system, the ideal requirement is to have a formal mode of engagement between an employee and his or her reporting manager or panel of managers. No matter which evaluation method you are using, there are cloud based performance appraisal software like SuccessDart available today that helps you implement any of your desired evaluation methodology in your organization with flexible scaling. Keeping this in mind, let us have a detailed look into the top employee performance evaluation methods that companies use today:

performance evaluation bell curve

Bell Curve system of employee review

Bell Curve oriented performance analysis of employees is the most widely followed practice amongst the HR fraternity. Developed initially for factory model employees, this system is now used in almost all sectors irrespective of the size and scale of operations. It typically works to organize employees on 3 scales i.e. High Performers, Mid Performers and Non Performers. Organizations have a pre-determined percentage for the number of people that are to be categorized under these three sections. This creates a situation of forced rankings wherein managers are left with no other choice to rate employees as poor performers even if they are not just to meet the criterion of compulsory percentage of poor performers. A vast majority of employees fall in the middle category and they are safe and only few people have access to the top spots. This creates politics within organizations where favors are sought for ratings and people deliberately using the rating system to keep a check on employee duties. Still a number of organizations refuse to let go of this traditional practice and they continue to believe in the success of this system.

Management by Objective

This is perhaps one of the simplest types of employee evaluation methods you will ever find in an organizational structure. The working is pretty much simple. The employee and his or her reporting manager meets upfront before a new quarter or year in the work calendar begins. During their conversation in the meeting, they agree upon objectives that are to be achieved by the employee in the upcoming appraisal period which may be a quarter or 6 months or a year at the maximum. Long term goals are also set at times but not necessarily.  At the end of the appraisal evaluation period, the manager and employee organizes another discussion to analyze the completion progress of each objective laid out initially. This practice is carried out to find out areas of improvement for the employee and the manager communicates his report to the concerned human resource team handling employee evaluation. As mentioned before management by objective is carried out either as Annual Performance Review or Quarterly Performance Review or even Bi-Annual Performance Appraisal Review.

Rating Scale based Performance Management System

A not so popular form of employee evaluation for performance is the rating scale based system wherein the enterprise develops a grading system similar to the ones used in schools. An in-depth grading and rating system is developed for all operational roles and employees are given a particular score as their target. Failure to achieve the exact score or more will result in the evaluation being categorized as unsuccessful and the candidate would be directed to undergo a performance improvement plan or any other major orientation program and could even be terminated for under performing. Because of this nature, rating based performance management is highly discouraged among today’s human resource fraternity. Due to increasing talent attrition and the inability to attract new talents, it is vital to keep your existing employees happy within your organization. Such negative sentiments resulting out of weak ratings would definitely instill fear in other employees as well thereby prompting them to look for better career alternatives.

Employee Self Assessment

Self Assessment by employees are often encouraged by modern day organizations to allow employees to evaluate their progress on their own based on their set KRA’s and KPI’s. However, it serves mostly as an added HR activity and is not seen as a replacement for company controlled evaluation systems. This activity may be carried out occasionally and helps employees to prepare themselves for organizational reviews that are carried out periodically. Self evaluation of achieved objectives and missed goals often help employees to find motivation to improve on their weak spots which they would have otherwise be ignorant off till it is pointed out in an official review by the employer. It is a great effort to help reduce the tedious task of putting people into performance improvement plans. When employees are given the chance to find out their weaknesses on their own, they would ensure that they make up for it before an organizational review comes up in the near future.

performance evaluation

360-degree employee evaluation

Today, worldwide a number of progressive companies are doing away with traditional bell curve ratings and moving into an agile system of evaluating their employee’s performance. One of the most common adaptations we see in that context is 360-degree employee evaluation. The key idea behind such an employee performance evaluation system is to arrive at a complete picture of the candidate’s performance with inputs from all stakeholders and peers with whom he or she has interacted during the evaluation period. The human resource team collects continuous feedback from all concerned stakeholders and prepares a detailed report for the employee’s performance insights. Areas such as leadership capability, progressive thoughts, work ethics, etc., can be considered as a basis for an employee’s overall quality thanks to such a comprehensive evaluation. Companies have in the past ignored such parameters for evaluating employees and as time progressed they found it very difficult to deal with high attrition rates. Talented employees have tons of options and if you do not care and invest in their happiness, they are bound to leave.

Project Based Evaluation

This is a case to case evaluation system undertaken by several organizations to retrospectively analyze an employee’s performance in each of their assigned projects and ensure that they take best practices forward and invest in removing bottlenecks that stalled them in the past. Such a performance review typically works fine for high value projects that require assigned resources to be at their best always. Such review systems also ensure that best efforts are always rewarded so as to motivate workforce to remain as competent as they can in all projects. The only restrain that employees face because of such a system are frequent conversations with their managers if the projects are short term. However, modifications have been made to such systems so as to reduce hassles. For example, certain organizations conduct project based review after the successful completion of a certain number of projects or projects done in a particular time frame like quarterly or half yearly. This reduces number of meetings drastically and hence employees are freed up from unnecessary pressure of having to find time from their busy schedules for review meetings.

Critical Incident based evaluation

This is a new age employee performance review technique that is now being increasingly adopted in enterprises. However, most companies include this as an add-on factor while evaluating their employees. Critical incidents or situations that a particular employee faced in the company during their work period are taken note of. The candidate’s response to the scenario, their level of maturity in handling the situation, the quality of output produced under such a stressed situation, etc., are taken into consideration. The major emphasis of such a rating is to reward employees who have exceeded their expectations when situations demanded wild requirements. For example, an employee might have single handedly solved a complex technology issue in a critical service module thereby saving a huge fortune for the company which would have otherwise be lost due to an interrupted service. For such a system to be properly implemented and ratings effectively imparted to staff, it is absolutely necessary to maintain a detailed record of activities that occurred during the incident.

Above are some of the well known performance evaluation methodologies that are followed by human resource teams worldwide. Though the approach in all these methods are unique from each other, there is a common way of doing the evaluation. Like for example a common template of questions that are to be answered by the participants when they undergo any of the above performance analysis and evaluation systems. They are namely

  • Objectives that have been met in this appraisal
  • Important Goals that have to be set for the next appraisal
  • Technology or Technical skills that have been focused on or needs addition
  • Soft Skill Progress
  • Communication

And all of these parameters are evaluated by three major questions in multiple formats namely

  • What went well?
  • What went wrong?
  • What could have been better?

Employee evaluation for ascertaining their performance levels is an irreplaceable part of organizational culture. It is a necessity to ensure steady growth of the individual and in the process guarantee evolution of the company into a progressive one. A key challenge that organizations face today is to decide on which of the above examples of performance evaluation is best suited for their business. This decision needs to be taken after a careful inspection of their operational resources and their business model. No matter the method you choose, implementing it in your organization today is quite easy. All you need to do is to onboard a cloud based appraisal management and evaluation system like SuccessDart to try out the best fit evaluation scheme with your workforce. Get in touch with us today to know how SuccessDart can transform the way your workforce is evaluated for their performance.


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