Finding a performance appraisal method which suits your company is often a tricky task. This article takes a look at three different techniques and how they can benefit a variety of different companies.

The first approach involves managing staff by objectives. Managers and employees should sit down at the start of the year and clearly sets out a list of goals for the upcoming year. This collaborative approach gives the employee more ownership of their work. The goals themselves should be set deadlines by which they need to be achieved. Managers often set stretch goals in order to see productivity improvements within the team. Managers of sales people often prefer this approach as you can clearly set out different sales targets or goals for the upcoming once.

Next, consider using ratings scales if you have a larger organization. A rating system involves employers creating their own grading system for various characteristics of employees (e.g. productivity, workmanship, sales, communication skills, etc.). Off-the-shelf grading systems are often used as a basis for customizing your own technical rating system. The reason this works better larger organizations is that operational procedures have become more standardized and therefore each person’s role is more clearly defined, and therefore more easily rate. The performance appraisal method also works well when comparing employees to see which one gets promotions.

Finally, many organizations now use 360° feedback as their primary performance appraisal method. This necessitates HR personnel (or sometimes managers) interviewing colleagues, direct reports and supervisors of each employee to gain a broad profile of the person’s behavior, performance and characteristics. This method is more egalitarian in the sense that you get a broader view of the individual and can overlook poor appraisals from a single individual. The downside however is that all of these appraisals and interviews can take a long time to perform so this performance appraisal method does involve a lot of overhead.