Performance Appraisal Systems in HRM: 6 Types

By Marianne Chrisos - Published on August 27, 2019
Performance Appraisal Systems in HRM: 6 Types

Performance appraisals are an important part of your performance management and employee relationship process. Knowing which type of performance evaluation to use with your employees can help make a big difference in their success and their overall future performance. It can also help make sure that businesses are more effective in meeting their goals and improving their business.

Synergita notes that most performance appraisals work through the following format in some fashion:

  • The manager sets goals
  • The manager guides the employee through goals
  • The employee works towards goals
  • The manager reviews employee outcome and performance

A performance management system and appraisal style are needed to effectively go through this process, thought the appraisal styles can differ basing on manager, department, or business.

What are the types of performance management appraisal systems most commonly used?

1. General

Some organizations keep things simple and casual. With ongoing communication between the manager and their employees throughout the year, goals and objectives are discussed regularly and formal, an annual review is to provide documentation to HR regarding merit and performance raises and bonuses, as well as for the official employee file.

2. 360-degree appraisal

360-degree appraisal system typically involved feedback from a variety of sources in addition to a direct supervisor. Additional feedback can be solicited from coworkers, clients, other department heads, and even customers. This gives employees and management a more holistic view of their performance across the organization.

3. Self-assessment

Sometimes self-assessment is part of the performance review process; it’s often just one part of the whole performance assessment and involves employees reviewing their own performance, meeting of goals, and challenges in their job.

4. Manager appraisal

Similar to the 360-degree appraisal, appraisal for manager roles usually involves soliciting feedback from their team members and employees. This helps gives managers and their leadership supervisors better understand how management is guiding employee projects, performance, productivity, and more.

5. Project review

Occasionally managers or companies will review employees based on specific projects they’ve completed or participated in. This is a helpful way to monitor employee progress as you go – instead of waiting for an annual review, you can review employees more regularly, but still have specific milestones to track progress against.

6. Sales review

Sales often hold different appraisals than general employees. They often far more frequent and held up to a solid set of sales metrics that a sales employee is responsible for reaching. Sometimes salespeople are reviewed for sales goals in addition to overall employee performance appraisals.

No matter which performance appraisal system your HR team decides to implement or recommend, most reviews should try to achieve an appraisal of the following things.

  • Goals: The main reason for an employee appraisal is to ensure that the employer and employee are on the same page about the goals that employees need to be working towards and managers best know to support them in their work and balance goals and other competing priorities. It’s also useful for employees to have a better understanding of how their individual goals fit with or support the overall company goals, as well as how they’ll specifically be assessed in whether or not they were successful at goal completion.
  • Review of skills proficiencies: Performance appraisals are an opportunity to connect with your employees, offering insight into what they did well, what your feedback is for them about what they can continue to improve, and also allow them to identify any challenges they’re having and how the business can help. Some things to consider reviewing, in addition to reviewing goals set at past reviews, include soft skills like time management, client interaction, presentation skills and more. It might also be a good time to review any technical skills that employees should focus on enhancing or if they’re interested in taking any additional training or even moving into a different role.
  • Listening to feedback: Getting feedback from your employees about their position, their goals, the team, and even your leadership is important. This helps maintain positive relationships with employees and also helps improve employee engagement and morale. It also helps you shape your leadership strategies better and ultimately allows for better communication that can help support business growth.

The most important thing about your performance appraisal system is that it works for you. The only way that performance reviews are effective is if they get used by management and they connect successfully with the employees that they’re reviewing. It’s important to make sure that your appraisal methods are in line with your company culture and your company goals. If your company is a start-up or small business, it might make more sense to forego traditional annual performance reviews and utilize another method of feedback and goal assessment.

Marianne Chrisos | Born in Salem, Massachusetts, growing up outside of Chicago, Illinois, and currently living near Dallas, Texas, Marianne is a content writer at a company near Dallas and contributing writer around the internet. She earned her master's degree in Writing and Publishing from DePaul University in Chicago and has worked in publishing, advertising, digital marketing, and content strategy.

Marianne Chrisos | Born in Salem, Massachusetts, growing up outside of Chicago, Illinois, and currently living near Dallas, Texas, Marianne is a content writer at a c...

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