Employee Performance Appraisal: Methods, Process & Examples

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  • 0:05 What Is an Employee…
  • 0:20 What Methods Are Used?
  • 2:20 What Is the Appraisal…
  • 3:18 Lesson Summary
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Lesson Transcript
Instructor: Carol Woods

Carol has taught college Finance, Accounting, Management and Business courses and has a MBA in Finance.

Do you understand the purpose of an employee performance appraisal? Do you know the different methods used to prepare an appraisal and what process is typically used? Read on for answers to all of these questions!

What Is an Employee Performance Appraisal?

An employee performance appraisal is a review and critique of an employee's performance during a specified period of time (often a year). It is normally used to determine raises and promotions and to develop performance improvement plans for those who do not score well.

What Methods Are Used?

There are a number of different methods used to evaluate employee performance. Let's go over several of the most common:

One method is ranking. In this method, a manager puts their staff in order, with the employee they feel is the highest performer first, and in order down to the lowest performer. Another method is paired comparison. In this method, each employee is compared to each other member of the group on specific factors and ranked accordingly. Then there's forced distribution. In this method, a manager must rank his employees into groups defined by HR, with a specified percentage of the total in each group. For example, he might put his top 10% of staff in the 'outstanding' group, the next 10% in the 'excellent' group, all the way down to his lowest 10% in a 'fair' group.

Another method is critical incident. In this method, managers document specific events for each employee and record them in a log. This would include incidents and situations handled both well and poorly. At appraisal time, the log would be reviewed to determine the overall success level of the employee. Yet another method is checklist. In this method, a list of specific job skills and responsibilities is given, and the manager gives the employee a grade for each item. To determine the overall score, the results may be added up, or they may be weighted, with some weighted more heavily than others, and a score determined by calculating a weighted average.

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