Performance Appraisal Methods

Discover the most effective performance appraisal methods, why you need to choose the right one, and how to implement it in your organization.

What Are Performance Appraisal Methods?

Performance appraisals or reviews are crucial in finding potential areas of improvement and implementing new measures to enhance employee performance. Organizations must have reliable performance appraisal methods to ensure that they evaluate their employees fairly using the same criteria. That way, the feedback they give their employees based on the appraisal is reliable and based on the same data and criteria used to evaluate other workers.


A high-quality performance appraisal is critical in continuous improvement. These evaluations allow HR managers to gauge how well their employees are performing. Then, if they find areas of improvement, they can implement new policies or create training programs to fill the gap. Performance appraisal methods are important because they provide HR managers with an objective approach to gauging employee performance.

The right performance appraisal method ensures that you evaluate employees fairly and can capture all potential issues with specific processes, tasks, or roles. Without a set appraisal method, the team may produce unreliable data which won’t help the company optimize processes and workflows.

Common Performance Appraisal Methods

There are various performance appraisal methods that companies use to gauge employee performance. It’s important to choose the appraisal method that effectively gathers performance data from your employees based on their roles and unique qualities of the industry wherein you operate. To give you a better idea of how to conduct your performance appraisal, here are some of the most common performance appraisal methods used by different companies. 

Graphic Rating Scale

Graphic rating scales provide a way for managers to visualize performance. In this method,  managers use a predefined set of performance factors and a scale to rate an employee’s performance on each factor. This is a simple, yet structured way to evaluate employees, although the lack of detail may make it unsuitable for deep appraisals.

360-Degree Feedback

The 360-degree feedback method offers a comprehensive view of employee performance. When using this method, managers typically try to gather information about an employee from various sources such as peers, subordinates, managers, and sometimes, even customers. That way, the employee gets to review their performance through the eyes of multiple people int he organization.

Critical Incident Method

This method is best used to gather examples that you will explain to employee when presenting performance feedback. The method involves using critical incidents, which are either moments of exceptional or subpar performance as key examples of things to follow or avoid when giving employees their reviews.

Management By Objectives

The management by objectives or MBO approach is a simple but effective approach to performance appraisals. The method involves setting clear and attainable goals for the team and assessing how close the team is to finishing the goals and whether or not they are on progress. These assessments should be done on a regular basis and all team members should be updated on the results.

Behavioral Observation Scale (BOS)

This is a systematic approach for assessing employee’s behavior. This allows organizations to find qualities or behavioral traits that may be useful or a hindrance when performing certain tasks. This method is very useful when behavior plays a major role in employee competency.

Tips for Effective Performance Appraisals

Here are some things to remember when conducting performance appraisals to ensure your evaluations are fair and can help you push your organization forward.

Set Clear Goals & Criteria

To start, it’s important that the team understands the goals of the assessment and the criteria that they will use to evaluate different employees. This helps avoid subjectivity and bias when performing appraisals.

Provide Regular Feedback

Performance appraisal should not be an annual event. Regular feedback sessions throughout the year can lead to continuous improvement. So, make sure that the team conducts appraisals and evaluations regularly to avoid establishing practices or behaviors that hinder progress.

Prioritize Fairness

Even when you set clear goals and criteria, bias and subjectivity can ruin the trustworthiness of your appraisals. This is why assessors and reviewers must understand the importance of objectivity and fairness when evaluating other employees. This ensures that your appraisals are reliable and actually help push your organization to perform better.

Train Assessors Effectively

Lastly, you have to make sure that your assessors are trained. The performance appraisal methods mentioned above take a while to master, especially with larger organizations. So, it’s crucial that you spend time building proper training programs for your assessors and teaching them the methods properly. That way, you can rely on them to produce trustworthy results whenever conducting a performance appraisal.

Leon Altomonte
Article by

Leon Altomonte

SafetyCulture Content Contributor
Leon Altomonte is a content contributor for SafetyCulture. With his language degree and years of experience in content writing, he delivers well-researched, informative articles about safety, quality, and operational excellence. In addition to his professional pursuits, Leon maintains a creative outlet as a performing musician.