Performance Appraisal Methods: Pros, Cons, and Best Practices
This paper examines three common performance appraisal methods — the graphic rating scale, forced distribution, and the essay approach — outlining how each works and the contexts in which it is applied. It then compares the advantages and disadvantages of each method, noting issues such as rating errors, forced discrimination, and subjectivity. The paper also addresses the legal implications of appraisal design, emphasizing the importance of consistency, objectivity, and non-discrimination. Finally, it identifies Management by Objectives (MBO), 360-degree appraisals, and narrative methods as among the most effective approaches for evaluating employee performance.
- Introduction to Performance Appraisal Approaches: Overview of common performance appraisal methods
- The Graphic Rating Scale: How graphic rating scales work and their structure
- Forced Distribution and Essay Approaches: Description of forced distribution and essay appraisal methods
- Advantages and Disadvantages of Each Method: Pros and cons of graphic, forced, and essay methods
- Legal Implications of Appraisal Approaches: Legal requirements and anti-discrimination considerations
- Best Performance Appraisal Methods: MBO, 360-degree, and narrative methods recommended
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What makes this paper effective
- Clearly structures each appraisal method with a description followed by a balanced pros-and-cons analysis, making comparisons easy to follow.
- Uses concrete numerical examples (e.g., the forced distribution percentages for 40 employees) to ground abstract concepts in practical application.
- Addresses real-world concerns — legal compliance and best-practice recommendations — giving the paper applied relevance beyond pure description.
Key academic technique demonstrated
The paper demonstrates comparative analysis by systematically evaluating multiple methods against the same criteria (description, advantages, disadvantages, and legal standing), then synthesizing the comparison into a reasoned recommendation. This structure is a standard technique in business and human resources writing for evidence-based decision-making.
Structure breakdown
The paper opens with descriptions of three appraisal methods, then pivots to a parallel pros-and-cons section for each. A dedicated section addresses legal considerations, and the paper closes with a recommendation section identifying MBO, 360-degree, and narrative methods as superior approaches. The progression moves logically from description to evaluation to prescription.
Introduction to Performance Appraisal Approaches
Performance appraisal is a critical function of human resource management, providing organizations with structured methods for evaluating employee performance. Three of the most commonly used approaches are the graphic rating scale, forced distribution, and the essay method. Each carries distinct characteristics, strengths, and limitations that affect how fairly and accurately employee performance is assessed.
The Graphic Rating Scale
The graphic rating scale is one of the most common methods used in performance appraisal evaluation. It requires evaluators to indicate the level at which an employee manifests a given trait, performance result, or behavior related to the delivery of work-related tasks. The ratings are tailored to capture performance in specific work-related areas, such as level of job knowledge, quality of work, and degree of responsibility. The scale offers a continuum stretching from descriptors such as "low" to "high," "poor" to "good," or "least effective" to "most effective." Although scales may extend further, they typically include a maximum of seven points. The graphic variety may often not define each point explicitly.
The following characteristics should positively influence the acceptability of a graphic rating scale:
First, performance ratings must be clearly defined. Second, the scale should reflect observable behavior and be backed by concrete evidence in order to ensure objectivity. Third, it should avoid ambiguous and subjective terms such as "honesty," "loyalty," and "integrity." If such terms must be used, observable behaviors should be cited to support them. Fourth, the points on the scale should be objective and directly related to the aspect of performance being measured. For instance, when describing an individual's verbal fluency, it is preferable to use descriptors such as "fluent," "hesitant," or "unimpeded" rather than "very good," "average," "poor," or "below average."
Forced Distribution and Essay Approaches
Forced Distribution
This method requires the evaluator to rate subordinates by applying a fixed distribution scale. It is used to capture a range of job performance components. The scale typically demands that a section manager rate staff as follows: 10% in the lowest performance group, 20% below average, 40% average, 20% above average, and 10% in the highest performance group. Thus, for a company with 40 employees, the distribution would yield 4, 8, 16, 8, and 4 employees in each tier, respectively. Companies provide various templates for carrying out appraisals based on such a scale, with the top, middle, and bottom distribution being one of the most common formats.
Essay Approach
This method entails writing a flowing, essay-like report in which the evaluator describes an employee's behavior in relation to his or her work. These kinds of appraisals are often applied for a range of common purposes — they may be used to justify a pay raise, support a termination decision, or help the organization make decisions relating to institutional growth and development (exploreHR, 2016).
Advantages and Disadvantages of Each Method
The Graphic Rating Scale
Advantages: The graphic rating scale helps standardize content and facilitates objective comparison among staff. It is easy to create at low cost and is straightforward to use. It is also widely accepted by evaluators.
Disadvantages: The primary problem with this scale is its vulnerability to rating errors, which can render appraisals inaccurate. Common errors include the halo effect, severity bias, leniency bias, and central tendency. The halo effect refers to a scenario in which one rating that is intended to be independent interacts with and influences another rating in the evaluator's mind, causing an employee to receive similar scores across all performance dimensions. Central tendency refers to a lack of differentiation in ratings, resulting in most staff being evaluated as average performers. Leniency is the tendency to rate most employees highly across all performance components, while severity is the opposite — rating most employees harshly.
Forced Distribution
This method helps reduce errors such as severity and leniency. However, it is not without problems. It tends to force discrimination among staff even when meaningful differences are not apparent. For instance, even if employees in a given department are all high performers who deliver satisfactory results, the scale still requires the evaluator to differentiate among them artificially. As a result, the method is widely resisted by both evaluators and employees.
Essay Method
Essay appraisals are open-ended and are criticized for their lack of standardization. The method is accused of encouraging subjectivity, as evaluators may provide inaccurate information about employees due to personal biases. Because evaluators are not directed to provide feedback on specified aspects of work processes and delivery, there is a likelihood of focusing exclusively on either favorable or unfavorable elements of an employee's performance. Consequently, feedback may be biased or misleading and may misrepresent an employee's true capabilities (Kokemuller, 2016).
References
exploreHR. (2016, February 7). Performance appraisal methods. Retrieved from http://www.explorehr.org/articles/Performance_Appraisal/Performance_Appraisal_Methods.html
Kokemuller, N. (2016, February 7). The pros & cons of performance appraisal methods. Retrieved February 7, 2016, from Chron: http://smallbusiness.chron.com/pros-cons-performance-appraisal-methods-39497.html
Mayhew, R. (2016). Best appraisal method for office managers. Retrieved from Chron: http://smallbusiness.chron.com/appraisal-method-office-managers-60685.html
Mayhew, R. (2016, February 7). Legal aspects of performance appraisals. Retrieved from Chron: http://work.chron.com/legal-aspects-performance-appraisals-20795.html
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