promotion and/or salary increments, but also it is a good opportunity for companies to evaluate

employees’ strengths and weaknesses accurately.

 

Home < https://www.pockethrms.com/> Product

In business field, a wide variety of methods have been used for performance appraisal since last
<  Why
many years. These methods make the whole appraisal process easier and faster for HR people and
managers.
https://www.pockethrms.com/>
 
Pricing < https://www.pockethrms.com/pricing/>
Due to new-age features included in these modern tools, tracking performance of an employee
Contact Us
becomes easier for companies. Modern methods are proving a genuine fit for today’s generation to
evaluate the significance of an employee’s performance and enhance the employee’s retention rate.
 
Some employees have negative perceptions about the appraisal system because a feeling of being
criticized in the process. So, make it complete opposite and provide employees constructive
feedback.
 
An employee and a reviewer must focus on their tone of voice, body language and even choice of
words. If needed, give your supervisors and managers a proper training to handle the appraisal
process tactfully.

 
There are various ways companies can conduct a performance appraisal process and make it more
result-oriented. Some organizations plan performance review meeting annually or half-yearly based
on their company policies.
 

What is Performance Appraisal?

Going by its definition, the performance appraisal process or performance appraisal method is a
review process of employee performance at the job and overall contribution to an organization’s
success in a span of a certain time period.
 
This performance appraisal method is also known as “annual review,” “employee appraisal”,
“employee performance assessment”, or “performance evaluation”. It evaluates an employee’s skills,
accomplishments and growth or lack in performance and paves way for their improvement.
 
The whole process helps companies to develop a roadmap for their business for the coming future.
 
Also Read:11 Key Objectives of Performance Appraisal in 2023 <
https://www.pockethrms.com/blog/objectives-of-performance-appraisal/>
 
 What is the Purpose of Performance Appraisal
Method
Home < https://www.pockethrms.com/>
The performance appraisal process is a win-win situation for organizations and employees.
< Product  Why
Employee evaluation is a great practice for an organization to find top performers. Also, it helps your
employees to upgrade their skills and performance as they get feedback to better their own roles.
https://www.pockethrms.com/>
 
Pricing < https://www.pockethrms.com/pricing/>
The process is very much necessary to make businesses and employees to get prepared for Contact Us
achieving the next milestone. Performance evaluation provides a platform to the employee to know
how their performance impacts business growth.
 
Companies can also get an idea about good performers and poor performers so that they know
whom to offer an appraisal for more productivity and who needs training sessions to boost
performance. Below we explained what benefits it offers to an organization and to an employee in
detail;
 

Benefits for Companies 

Identify departmental issues that affect work quality.
Motivate talent of your staff to increase productivity
Find scope of improvement in working conditions to enhance productivity.
Help to make strategic decisions regarding expansion planning, layoffs, etc.
 

Benefits for Employee

Acknowledge the accomplishments of an employee!
Identify the opportunity for career development.
Know where the performance is lacking.
 

Types of Performance Appraisal Methods

Before we move on to modern performance appraisal methods, below we listed some traditional
methods of performance appraisal;

1. Grading Method
2. Ranking methods
3. Paired comparison
4. Field review method
5. Essay method
6. Confidential report
 7. Forced distribution method
8. Critical incidents method
 

Need of Modern Appraisal Methods

< Home < https://www.pockethrms.com/> Product  Why
Due to advanced technologies, workspaces have changed drastically and hence, offices need a better
https://www.pockethrms.com/>
Pricing < https://www.pockethrms.com/pricing/> Contact Us
and a transparent appraisal method. Generally, traditional appraisal methods focus more on rating of
individual’s personality traits, whereas the latest performance appraisal method emphasize more on
an employee’s accomplishments.
 
The modern method is developed to overcome the flaws in old performance management
techniques. With changing times, traditional performance appraisal methods prove no longer
effective in yielding required results.
 
Instead of focusing more on future work, these old methods are based more on an employee’s past.
Many employers view the whole procedure as futile! So, the majority of companies also start
switching to modern methods for accurate results that companies need to excel in their fields. 
 
On the other hand, modern methods leave a positive impact on employees about the appraisal
system and now they can face the appraisal meeting with more confidence and without taking
burden of it. These new processes can easily accommodate the modern demand of employers and
employees. Today, companies use the latest method to make the evaluation process unbiased.
 

Why opt for Modern Methods of Performance

Appraisal
When you know how these modern processes can beneficial for your business, then it becomes easy
for you to decide which one to select. So, lets now understand how it supports your organization;

Clearly define the company’s goals

Improve productivity and performance of employees
Offer effective and real-time feedback to employees
Identify training and development requirements
Provide insights about ineffective activities
Align employee’s performance with the company’s vision
Enhance employee retention and employee engagement rate
 
 Types of Modern Performance Appraisal Methods
There are some of the employee’s performance appraisal methods that are framed taking into
consideration all the contemporary aspect of modern day business workflow.

<
Management by objectives mbo
Home < https://www.pockethrms.com/> Product  Why
360-degree appraisal method
https://www.pockethrms.com/>
Cost accounting method
Pricing < https://www.pockethrms.com/pricing/>
behaviorally anchored rating scale bars
Contact Us
Psychological appraisal
Human Resource appraisal methods
 

List of Top 7 Modern Performance Appraisal

Methods
With the correct method of performance evaluation, companies can improve productivity of their
workforce and also make the whole review experience rewarding and effective. HR leaders usually

implement one of the seven modern methods of performance appraisal that are listed below:
 

 
 1. 360-degree Feedback
This multidimensional technique of performance appraisal evaluates an employee based on
feedback gathered from his managers, customers and peers. A good method to eliminate biased
Home < https://www.pockethrms.com/>
reviews and to get a detailed understanding of an employee’s competence!
< Product  Why
 
This modern method of performance appraisal system is also used to ascertain training and
https://www.pockethrms.com/>
Pricing < https://www.pockethrms.com/pricing/> Contact Us
development requirements. Under 360-degree appraisal, employee related information like his or her
skills, behaviors and abilities are gathered from clients, peers and supervisors.
 

Advantages:
Employees are aware that their performance and its impact is monitored by other
stakeholders.
Motivate employees to invest in career development and self-development activities.
Promote employee engagement
 

Disadvantages: 
Lack of planning
Cultural differences
Competitiveness
Delay or misguided feedback
 

2. 720-degree Method
The method demands assessment of the stakeholders and also from the groups outside the
company. The outside group consists of investors, clients, suppliers, etc and analyzes the success of
a company as a whole. It makes the workplace synergetic and enhances best of every employee.
 

Advantages:
It helps to analyze better and give proper feedback after measuring the performance on
various elements.
Company can build co-operative and superior team and also encourages transparency in the
process.
 

Disadvantages:
Majority of reviewers thinks this is the tedious method.
Focus more on weaknesses instead of strengths.
 
 3. Psychological Appraisals
The process is useful to identify the hidden potential of an employee and also focus more on
analyzing an individual’s future performance. It analyzes employees’ performance based on various
Home < https://www.pockethrms.com/> Product
elements like intellectual traits, interpersonal skills, personality traits, cognitive abilities, leadership
<  Why
skills, emotional quotient, etc.
 
https://www.pockethrms.com/>
Advantages: Pricing < https://www.pockethrms.com/pricing/> Contact Us
Along with an employee’s performance, extract measurable data to identify employee’s
potential.
Easy to deploy and offers a platform for introverted employees to show their potential.
 

Disadvantages:
The process is slow and complex.
Need involvement of psychologist to conduct various tests.
 

4. Management of Objectives <
https://www.pockethrms.com/blog/management-by-objectives/>
In this method, staff and managers work together to identify, organize and communicate objectives
to focus on. Once managers set the clear goals, then they check the progress periodically and debate
over the feasibility of achieving those goals.
 
They validate objectives by using the SMART method and see whether the objective is clear,
achievable, time-sensitive, measurable and realistic. Under this method, employees are reviewed on
their results and if they success, then they are rewarded with salary hike and/or promotions else they
need to go through further training.
 
The main purpose of this review method is to aid an employee’s overall performance and not to
degrade the employee. The performance evaluation process is not conducted in a punitive manner,
but in a constructive manner.
 

Advantages:
Improves employees’ commitment towards the business
Increase probability for goal accomplishments
Make employees future-ready
 
 Disadvantages:
Less involvement of senior management
Un-measurable and unclear objectives
 
< Home < https://www.pockethrms.com/> Product  Why
5. Assessment Centre
https://www.pockethrms.com/>
Method
Pricing < https://www.pockethrms.com/pricing/> Contact Us
In 1930, this method was introduced and later, it has been updated to fit today’s work culture. In this
method, employees know how others see them and it affects their work performance.
 
This process evaluates the current performance of an employee and also predicts his job
performance in the future. During the evaluation, an employee is asked to participate in social-
simulation activities to ensure his success in a role.
 
Assessment method is specially used for evaluating potential of supervisors and executives in
businesses. They are reviewed by senior management and the review process is also supported by
the human resource team and psychologists.
 

Employees need to participate in various exercises, simulations, work groups and role playing that
are important for successful performance of the actual job. The reviewers discuss about the
gathered information and give their feedback at the end of the appraisal meeting in terms of
strengths and weaknesses of an employee.
 

Advantages:
Enhance employee’s thought process and boost employee efficiency
Tailored to fit different business needs and different roles
Improves an individual’s personality and skills
Minimum chance for biasedness
 

Disadvantages:
Difficult to carry out!
Cost and time intensive process
Discourage poor performers
Creates unhealthy competition at the workplace
 

6. Behaviorally Anchored Rating Scales (BARS)

Companies bring out quantitative and qualitative benefits with this modern performance appraisal
process. The method involves multiple statements that describe about employee’s common
 behaviors. These statements help to measure performance of an individual against predefined
standards which are applicable to their job profile.
 

Home < https://www.pockethrms.com/> Product 

The elements involved in this process offer better equitable appraisals as compared to other
< Why
methods. Generally, it involves five simple steps such as generating critical incidents, developing
performance dimensions, reallocating incidents, scaling incidents and developing the final BARS
https://www.pockethrms.com/>
instrument.
 
Pricing < https://www.pockethrms.com/pricing/> Contact Us
The reason why this method is better than the traditional method is because it offers benefits like
clearer standards, consistency, better feedback and more accurate gauge in evaluation. But, this
method also involves some disadvantages.
 

Advantages:
Clear standards are defined, analyze performance accurately and enhanced feedback process.
Focus more on observable and specific behaviors instead of irrelevant variance rating.
Eliminate chances of biased reviews and keep the process fair and transparent!

 

Disadvantages:
Difficult to make decisions regarding promotion and salary increments!
Time-consuming and demands more from seniors!
 

7. Human Resource Accounting Method

By using this method, companies can analyze employees’ performance through the monetary
benefits they give to the organization. The method considers factors like quality, interpersonal
relationships, overhead cost, etc.
 

Advantages:
Accurately calculates the value employees bring to the company.
 

Disadvantages:
This method is money-consuming and need good memory and strong analytical skills of the
reviewer.
 
 In a Nutshell!
Each process has its advantages and disadvantages and also you need to keep in mind that one
method that suits one organization may be non-suitable for another company. After all, no method is
Home < https://www.pockethrms.com/>
perfect and suits all organizations to measure the performance of employees.
< Product  Why
 
Selecting the right performance appraisal is also not easy as it reflects what you think of your
https://www.pockethrms.com/>
Pricing < https://www.pockethrms.com/pricing/>
employees’ potential and how much you are interested in their career development. But, once you
Contact Us
identify the right method based on your industry type and employee base, then the next challenge for
the human resource team is to implement it properly. This will avoid the critical performance gaps
and also identify pain points that affect ROI.
 
Due to availability of rapid advancement in HR software, companies sideline outdated appraisal
methods and prefer to invest cloud-based performance appraisal management system. The system
offers the quality of results which are required for a company to optimize its growth and success.
 
In recent times, the technological power of HRMS software has skyrocketed. With the help of
automated HRMS system, the human resource department can run the performance evaluation

process in just a few minutes.
 
In fact, some HR software are easy to customize and integrates well with other online HR tools such
as an attendance management system, leave management software, timesheet management, etc. so
that you can get the clear picture of employees’ overall performance with just few clicks.
 

Reasons to Select the Performance Appraisal

Management System <
https://www.pockethrms.com/performance-
appraisal-software/> of Pocket HRMS
Pocket HRMS, a new-age HR software with various built-in modules, offers a simple, customizable
and user-friendly performance management platform that fulfills all your business needs.
 
Our HRMS modules help companies to prepare their businesses for the future of work and connect
your employees with you.

Help managers and HR folks to deliver spot-on and prompt reviews

540-degree feedback platform that’s ensures unbiased rewards
Help organizations to align workforce towards company goals
Ensure to complete all tasks involved in the performance appraisal cycle
Easy to track and record performance of employees on regular basis