Performance appraisal is a systematic process of evaluating and assessing the job

performance of employees against predetermined performance standards, goals, and

objectives. The purpose of performance appraisal is to provide feedback to employees, identify
strengths and weaknesses, and help them improve their performance. Performance appraisal is
a key component of performance management, which involves setting performance goals,
providing feedback, and coaching employees to achieve those goals.

Here are some definitions of performance appraisal by various authors:

According to Edwin B. Flippo, performance appraisal is "the systematic, periodic, and an

impartial rating of an employee's excellence in the matters pertaining to his present job and his
potential for a better job."

According to Michael Armstrong, performance appraisal is "the process of evaluating an

employee's performance in relation to agreed objectives and standards."

According to Dale Yoder, performance appraisal is "the process of evaluating the performance
and qualifications of an employee in relation to the job requirements and organizational
objectives."

According to Gary Dessler, performance appraisal is "the process of evaluating how well
employees perform their jobs compared to a set of standards and communicating that
information to them."

In summary, performance appraisal is a systematic process of evaluating and assessing the job
performance of employees against predetermined performance standards, goals, and
objectives. The purpose is to provide feedback to employees, identify strengths and
weaknesses, and help them improve their performance. Performance appraisal is an important
component of performance management and is essential for ensuring that employees are
meeting the goals and objectives of the organization.
Performance appraisal provides several benefits to both the employees and the
organization, including:

• Feedback: Performance appraisal provides employees with feedback on their job

performance, which can help them understand their strengths and weaknesses, and
identify areas for improvement.
• Goal Setting: Performance appraisal helps employees and managers set goals for
performance improvement and development.
• Motivation: Performance appraisal can be used to motivate employees by recognizing
their achievements and providing them with opportunities for growth and development.
• Performance Improvement: Performance appraisal can help identify areas where
employees need additional training or support to improve their job performance.
• Succession Planning: Performance appraisal can be used as a tool for identifying
potential candidates for promotion or succession planning.
• Compensation: Performance appraisal is often used as a basis for determining
employee compensation, including salary increases, bonuses, and other rewards.
• Legal Protection: Performance appraisal can provide legal protection for organizations
by documenting employee performance, which can be useful in defending against
discrimination or wrongful termination claims.

Overall, performance appraisal is an important tool for ensuring that employees are meeting
the goals and objectives of the organization, and that they are receiving the feedback and
support they need to improve their job performance. By providing employees with regular
feedback, setting goals for improvement, and recognizing their achievements, organizations
can help motivate and engage their workforce, improve employee satisfaction and retention,
and drive business success.
There are various types of performance appraisal methods used by organizations. Some
of the most common types include:

• Graphic Rating Scale: This is a simple and widely used performance appraisal method
in which an employee's performance is rated on a scale that ranges from excellent to
poor.
• Behaviorally Anchored Rating Scale (BARS): This method combines the graphic
rating scale with a behavioral description of each level of performance, which helps to
make the ratings more objective and specific.
• Management by Objectives (MBO): This is a goal-oriented approach to performance
appraisal in which employees and managers work together to set specific, measurable,
achievable, relevant, and time-bound (SMART) goals for performance improvement.
• 360-Degree Feedback: This method involves obtaining feedback on an employee's
performance from a variety of sources, including managers, peers, subordinates, and
customers.
• Critical Incident Technique: This method involves recording critical incidents of an
employee's behavior that are particularly effective or ineffective in achieving
performance goals.
• Narrative Performance Appraisal: This method involves a written report that
summarizes an employee's job performance, strengths, and weaknesses, and identifies
areas for improvement.
• Ranking Method: This method involves ranking employees based on their
performance, with the best performer ranked first and the worst performer ranked last.
• Forced Distribution: This method involves grouping employees into predetermined
categories based on their performance, with a fixed percentage of employees in each
category.

Each of these performance appraisal methods has its own strengths and weaknesses, and the
choice of method depends on various factors such as the job requirements, the organization's
culture, and the level of support and resources available for performance appraisal.
Modern techniques of performance appraisal include:

Continuous Performance Management (CPM): This is a real-time feedback system that

provides ongoing performance evaluations and feedback throughout the year. It involves
regular check-ins and coaching sessions with employees to help them improve their
performance.

Agile Performance Management: This approach is based on the principles of agile software
development, which emphasizes continuous improvement, collaboration, and flexibility. It
involves setting short-term goals and providing ongoing feedback and coaching to employees.

Gamification: This technique involves using game mechanics and game design elements to
make performance appraisal more engaging and motivating. It can include features such as
leaderboards, badges, and rewards.

Artificial Intelligence (AI): AI-powered performance appraisal tools use machine learning
algorithms to analyze employee performance data and provide insights and recommendations
for improvement.

Peer-to-Peer (P2P) Performance Appraisal: This approach involves having employees

evaluate each other's performance, based on a set of predefined criteria. It can promote
collaboration, teamwork, and accountability.

Check-ins: This is a simple and informal approach to performance appraisal, which involves
having regular conversations between employees and their managers to discuss their progress,
goals, and challenges.

Behavioral Economics-Based Performance Appraisal: This approach uses principles from

behavioral economics to design performance appraisal systems that are more effective at
motivating employees and improving performance.

Each of these modern techniques has its own benefits and drawbacks, and the choice of
technique depends on various factors such as the organization's culture, goals, and resources.
Ultimately, the goal of any performance appraisal technique is to provide employees with the
feedback and support they need to improve their job performance and contribute to the success
of the organization.
180-degree, 360-degree, and 720-degree appraisals are variations of the traditional
performance appraisal methods that involve feedback from multiple sources.

180-degree appraisal: In this method, the employee is evaluated by their manager and one
other person, such as a co-worker, subordinate, or customer.

360-degree appraisal: This method involves feedback from a broader range of sources,
including the employee's manager, peers, subordinates, customers, and even family members.
The idea is to provide a more comprehensive and well-rounded assessment of the employee's
performance.

720-degree appraisal: This is an extension of the 360-degree appraisal, which includes

feedback from external stakeholders, such as suppliers, vendors, and partners.

The primary advantage of these multi-source appraisal methods is that they provide a more
complete and accurate picture of an employee's strengths and weaknesses. They can also
promote greater transparency, collaboration, and accountability within the organization.

However, these methods also have some potential drawbacks, such as the complexity of the
feedback process, the potential for bias or inaccurate feedback, and the difficulty of managing
and interpreting large volumes of data. It is important to carefully design and implement these
methods to ensure their effectiveness and reliability.

The process typically involves the following steps:

• Identify participants: The employee who is being appraised and their manager select
the individuals who will provide feedback. This may include peers, subordinates,
customers, and other stakeholders who have regular interactions with the employee.
• Develop a questionnaire: A questionnaire is developed that asks specific questions
about the employee's performance and behavior. The questions may be open-ended or
structured, and should be designed to gather constructive feedback that can help the
employee improve their performance.
• Collect feedback: The participants are asked to complete the questionnaire, either
anonymously or with their names attached. The feedback is collected and compiled into
a report.
• Analyze feedback: The feedback report is reviewed by the employee, their manager,
and any other relevant parties. The feedback is analyzed to identify patterns and areas
of strength and weakness.
• Develop an action plan: Based on the feedback, the employee and their manager
develop an action plan to address any performance gaps or areas for improvement. This
may include setting specific goals, providing additional training or support, or making
changes to work processes or procedures.
• Follow-up: Regular check-ins and progress updates are scheduled to ensure that the
action plan is being implemented and to provide ongoing support and feedback to the
employee.