Types of Performance Management

 

In the continuation of my blog What is Performance Management? here I would like to talk about different types of performance management and how to choose to the best method for different types of organisations.

There are 6 types of Performance Management System. They are as follows :

General Appraisal 

The general appraisal method is constant communication between the manager and the employee throughout the year. At the end of the year, they determine whether the set objectives have been met, provide feedback, and set new objectives.

Pros:-

  • Continuous feedback
  • Continuous evaluation of performance
  • Fewer chances of misunderstanding or expectation mismatch
  • Increased rate of engagement and retention 

Cons:-

  • Time taking in case of a large team 
  • The sheer amount of data can be overwhelming  

 

360 Degree Appraisal

It allows other employees to provide feedback on their experience with a particular employee. This feedback from colleagues can be verified by the manager and taken into account in the evaluation process.

Pros:-

Increased self-awareness

Balanced view

Leverages strengths

Uncovers blind spots

Development of skills

Cons:-

Side-lines positive feedback

Garners dishonest reviews

Increases distrust in the leader

Time-consuming process

Provides biased opinions

 

Technological Performance Appraisal:

It assesses an employee’s technical skills. It calculates the employee’s throughput and determines his or her technical soundness. It is useful for measuring or evaluating specifically the technical ability of an employee and focuses on specific skill sets.

Pros:-

Focuses on the specific skillset of the technical department

Cons:-

Restrictive to a specific skillset

Cannot be applied uniformly across the organization

 

Manager Performance Appraisal:

With this type, managers go through the assessment process. It is the role of the manager that is very important to take care of both the team and the client. The manager has to satisfy the customer without disturbing the morale of the (team) employees. Most of the time the manager’s evaluation process includes feedback from the team members involved and sometimes also from the client.

Pros:-

Direct feedback from team members

Continuous feedback on a day-to-day basis

Cons:-

Feedback might be dishonest

Fear of spoiling a relationship 

 

Project Evaluation Review

This is one of the best ways to determine the quality of an employee’s work. Instead of waiting until the end of the year to evaluate an employee, you can evaluate the employees at the end of each project.

Pros:-

Instills a regular feedback mechanism in the organization 

Easy identification of any deviation in work

Cons:-

Since there is no single Manager, feedback from one project manager does not always flow to the next project manager.

 

Employee Self-Assessment 

The employee assesses himself or herself and is ultimately compared to the results of the manager’s assessment. Discussions follow and, if there are differences, the manager discusses them with the employee.

Pros:-

Employees feel empowered 

Employees feel valued during review discussion

Cons:-

The employee might overemphasize their contributions

The employee might downplay their success

 

Sales Performance Appraisal

A seller is judged by the goals he has set in relation to his results. Salespeople are closely linked to the financial goals of any organization. The manager and the salesperson must find ways to achieve the goals before they set realistic targets.

Pros:-

Less subjective 

Easy to analyze

Cons:-

All aspects of performance are not assessed 

 

How to choose the best Performance Management System?

Choosing the right Performance System majorly depends upon the nature of the organization. For e.g. For an organization driven by sales, sales performance appraisal can work as a performance management system but the same cannot work for an IT firm.

IT firms generally use employee self-assessment methods or 360-degree appraisal methods. 

Similarly, larger IT organizations generally prefer a 360-degree appraisal system whereas for the smaller organizations it might not work as they might not have so many stakeholders for a single employee as needed for a 360-degree evaluation system.

Also, for a manufacturing company that has blue-collar employees, the performance will depend upon productivity. So, for them, a project evaluation review can do but for an organization that is driven by sales targets, then we should go with the Sales Performance Appraisal system.

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Author / Educator – Isha Gaur, Lead – Talent Engagement Partner

Isha is HR Professional with 6+ years of experience currently working with 3Pillar Global and has prior experience in organisations like Thomson Reuters and hCentive Technologies. She started her corporate journey with the Recruitment function of HR, then moved to HR Operations, and then finally working as an HR Business Partner role for the past 4 years. She has a good hold on HR processes like Performance Management, Employee Engagement, etc.

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