Modern Methods of Performance Appraisal

The Performance Appraisal process also facilitates the evaluation of employees’ skills, specialization, and shortcomings according to which their wage raise and promotion are determined.


It is seen that, even after investing a lot of time on it, many organisations claim Performance Appraisal to be a time-consuming and ineffective process. But what they fail to understand is that these concerns are linked to the conventional performance Appraisal approaches used by them, which focus primarily on assessing employees' past work rather than enhancing their future performance. Over the years, a wide range of methods of performance Appraisal has evolved, some of which are more suitable than others to meet the demands of a dynamic business environment. As times have changed, modern business companies are increasingly turning to the new and much-improved techniques methods that have revamped this process.

So let’s have a look at Modern and Effective Methods of Performance Appraisal:

What is Performance Appraisal?

Performance appraisal refers to an annual or biannual process that includes setting quantifiable goals and objectives for the assessment of an individual’s performance. It assesses employees' overall performance and efficiency in compliance with the pre-determined targets for that particular year. The Performance Appraisal process also facilitates the evaluation of employees’ skills, specialization, and shortcomings according to which their wage raise and promotion are determined.

Modern Performance Appraisal Methods

Management by Objectives (MBO)

It is a process undertaken by managers to define the objectives intended for employees to accomplish while assigning each person an area of responsibility in terms of the outcomes expected from them. These indicators are further used as a guide for accessing each employee's contribution to the organisation. In determining productivity, it is quite useful as it emphasises career-oriented and tangible objectives. Compared to the other methods of performance appraisal, this method is less time consuming and very cost-effective.

Behaviorally Anchored Rating Scale (BARS)

BARS Performance Appraisal method analyses the behavior and way of working of employees through which the overall performance of the workforce is evaluated. It has not been long since this method was developed, and among all performance appraisal methods, it is already claimed to be one of the most effective methods. Behaviorally Anchored Rating Scale is a commendable combination of traditional and modern evaluation system guaranteeing precise results, due to which it is relatively more expensive than other methods. The Human Resource department plays important role in this process. The BARS method involves both quantitative and qualitative approaches, through which it succeeds in providing clear standards, improved feedbacks, and accurate performance analysis.

Critical Incident Method

There are certain events in an organization known as critical incidents. Through these incidents, employees are evaluated by managers under the Critical Incident Method of Performance Appraisal. Critical incidents can be any event where the employee might have done something great or something not so great. Under this method of performance appraisal, the evaluator is expected to maintain a digital or a physical journal to store the relevant information on different incidents. This method turns out to be very useful for an employee’s growth and the organization’s development.

360 Degree Feedback

The 360 Degree Feedback method is the performance appraisal tool that collects employee feedback from those people who interact with him, including his superiors, subordinates, and customers, in the organisation. It might be a bit time-consuming, but it is worth a try to look at the benefits it has. In general, the feedback takes the form of a questionnaire designed to serve this purpose. This technique motivates employees to make the most of their ability to receive good feedback.

Assessment Centre Method

Assessment Centre Method of performance appraisal assesses employees’ performance in social-related situations. In this method, employees are being asked to take part in situational exercises aimed towards highlighting their specialization in the organization. It gives insights into the employee’s characteristics that are capable of influencing their success like business ethics, tolerance power, problem-solving skills, adaptability, team spirit, etc.

Psychological Appraisals

Psychological Appraisal Method of Performance Appraisal is very useful in the determination of an employee’s hidden potential as it focuses on improving his future performance rather than dwelling on his past work. Under this method, a variety of tests are conducted by qualified psychologists that include in-depth interviews, tests, and private discussions. It aims at identifying employees’ emotional, intellectual, and other related traits that can affect their future performance in the organization.


All the problems of traditional performance appraisal methods have been resolved by these modern and effective methods of performance evaluation. With the arrival of technology and the latest software, the Performance Appraisal process is no more complicated and time-consuming. Therefore, switch to the current Performance Appraisal System techniques and increase the productivity of your 

(The article is authored by Kumar Mayank, Co-founder & CEO, Zimyo)

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