What is an advantage of using a comparative method for performance management?

A performance appraisal is an evaluation done on an employee’s job performance over a specific period of time. It is the equivalent of a report card on an employee and how their manager assessed their performance over the prior year.

Anyone who has worked in more than one department or at more than one organization can attest to the fact that not all performance appraisal processes are the same.

The varying systems and processes are all over the map. Unfortunately, some are done so poorly that they are not only designed to fail, but also to create a negative experience for both the manager as well as the employee.

Companies and managers use a number of common appraisal methods to assess employee performance. Each technique has pros and cons. To determine which technique works best for your business, you need to understand the purposes of appraising performance. A performance appraisal should motivate an employee to better performance by helping him understand why he needs to move away from poor performance or toward critical objectives.

Rating Scales

The graphic rating scale and behavioral rating scale are two common rating scale appraisal techniques. With the graphic scale, employees are simply assigned a score on criteria important to job success. The behavioral scale focuses on actual behaviors. Pros of ratings scales include ease of use and understanding. Many managers and employees are familiar with them. They offer a simple way to communicate areas of strengths and weaknesses. A common negative of rating scales is the assumption that they are directly tied to an employee's raise or bonus. This can cause score inflation. Managers can also have negative bias toward employees.

Narrative Techniques

The narrative technique and critical-independent method involve more details analyses of job performance. You write an essay assessment of performance with the narrative and keep a running log describing positive and negative performance and behaviors with the critical-independent method. A pro of these techniques is the thoroughness of detail in analyzing employee behaviors. Additionally, you can focus on praising positive behavior and addressing areas for correction. A concern is the reaction of the employee, though. He might interpret the evaluation too positively or too negatively relative to a scoring system.

Comparison Methods

The multiperson comparison method and forced distribution methods are two common comparison appraisal techniques. These approaches compare the subject employee's performance to peers. This allows you to communicate to employee areas in which he over- or under-performs relative to others in similar positions. This can motivate performance in competitive workplaces and among competitive employees. The risks of these methods include the potential of in-fighting and the lack of harmony you might see in your employee ranks.

360 Feedback

A popular contemporary appraisal technique is the 360 degree feedback. In this method, employees are evaluated by colleagues, customers, subordinates, other interested parties an supervisors. The major advantage of this technique is that it offers the employee a glimpse of how others view his performance in various relationships critical to his job. It also allows a better chance to compare different perspectives in the evaluation process. Biased evaluators, poor alignment with goals and negative employee feelings are among cons of this approach.

There are many varying opinions on the subject of performance appraisals and why they are done. Some organizations do performance appraisals because they feel obligated to do them – because everyone else does.

Some organizations do performance appraisals to make sure they have a piece of paper in the employee’s file – in case they ever need to do corrective action.

But successful organizations understand the importance of incorporating performance appraisals into their performance management process and strategy.

Advantages of performance appraisals:

·        They provide a document of employee performance over a specific period of time.

·        They provide a structure where a manager can meet and discuss performance with an employee.

·        They allow a manager the opportunity to provide the employee with feedback about their performance and discuss how well the employee goals were accomplished.

·        They provide a structured process for an employee to clarify expectations and discuss issues with their manager.

·        They provide a structure for thinking through and planning the upcoming year and developing employee goals.

·        They can motivate employees if supported by a good merit increase and compensation system.

Disadvantages of performance appraisals:

·        If not done right, they can create a negative experience.

·        Performance appraisals are very time consuming and can be overwhelming to managers with many employees.

·        They are based on human assessment and are subject to rater errors and biases.

·        Can be a waste of time if not done appropriately.

·        They can create a very stressful environment for everyone involved.

Finally, performance appraisals are only as good as the performance management system it operates within. Organizations that only do performance appraisals for the sake of doing them are wasting their time.

But organizations that incorporate performance appraisals into a comprehensive performance management system and use them to implement business goals have an advantage for accomplishing their goals and ultimately their strategic plan.

Estimated reading time: 6 minutes

Managers often struggle with directing the work of others. Managing people is a skill that serves to motivate employees to do a good job.

Whether you want to call it employee management or performance management, the intended outcome is the same – ensuring that corporate objectives are met.

I recently attended a conference on quality. During my shuttle bus commute from the airport to the hotel, I met another person who was attending the same conference.

When he learned that I was also attending the conference, we began talking about all sorts of things, but performance management (PM) and, more specifically, performance appraisals (PA) came up.

He had very strong feelings about why he thought performance appraisals were a waste of time and ultimately added no value to the employee or organization.

Most anyone who has managed people or has been managed by someone has experienced the sometimes stressful, time-consuming process of performance management.

In theory, I agree that organizations that do not have strong performance management systems can have a negative effect both on employees as well as their managers.

However, a well-designed performance management process can be rewarding for both the employee as well as the manager.

So what are the advantages and the disadvantages of performance management?

Disadvantages of Performance Management

1. Time Consuming

It is recommended that managers spend about an hour per employee writing performance appraisals.

I’ve known managers who had to write performance appraisals on 100 plus employees which would take weeks to complete.

And, depending on the number of people being evaluated, the process can take hours to write the department’s performance appraisals – but also hours meeting with staff to review the written material.

A very time-consuming, and tedious task.

2. Discouragement

The performance appraisal process needs to be one of encouragement, positive reinforcement, and a celebration of a year’s worth of accomplishments.

If the performance appraisal process is not a pleasant experience, it has the potential to discourage staff.

It is critical that managers document not only issues that need to be corrected, but also the positive things an employee does throughout the course of a year, and both good and bad should be discussed during a PA.

For instance, encourage employees by sharing observations of successful project completion, positive teamwork, or professional developmental milestones.

3. Inconsistent Message

We all struggle to remember things when we get busy.

It is those times when we remember the bad and forget to acknowledge the great things employees do every day that sends an inconsistent message to employees

Make a habit of documenting employee observations (both positive and negative) when it is fresh.

Keep these notes as a source of information as you share feedback with employees.

This document of observations will provide you with the necessary feedback to review with the employee at performance appraisal time – to both correct behaviors and celebrate success.

Keep notes and accurate records of employee behavior, to send a consistent message to the employee.

4. Biases

It is difficult to keep biases out of the performance appraisal process.

It requires a very structured, objective process, as well as a mature manager to remain unbiased.  Be aware of this and take the time to learn about common rater (bias) errors.

Performance appraisal rater errors are common for managers who assess performance.

Learn to understand these natural biases, so you can ensure your employees receive fair evaluations.

Advantages of Performance Management

A performance management process forces managers to discuss performance issues with employees.

Managers are busy with day-to-day responsibilities.

This can result in neglecting to have those necessary interactions with staff that provide the opportunity to coach and offer work-related feedback.

It is this consistent coaching that encourages staff, affects changed behaviors, and promotes employee development.

2. Targeted Staff Development

All employees are on a development journey.

And, it is the organization’s responsibility to prepare them for increased responsibility.

If done well, an effective performance management system can help to understand employee career ambitions, identify employee developmental opportunities, and be an important part of a succession planning process.

3. Encouragement to Staff

There should be no surprises if issues are addressed in real-time and not held until the annual review.

Performance appraisals are a time to celebrate all the wonderful things an employee does over the course of a year and should encourage staff.

The trick to positive appraisals is to focus on what the employee is doing well while gently course-correcting undesired behaviors.

4. Rewards Staff for a Job Well Done

The reality is people go to work because they need the pay, and employees want to know what behaviors will result in more money.

When pay increases and/or bonuses are tied to the performance appraisal process, staff can see a direct correlation between performance and financial rewards.

This cause and effect is what motivates and encourages employees to perform at higher levels.

5. Under-performers Identified and Eliminated

As hard as we try to screen, train, and manage employees, it is inevitable that some employees just won’t make it.

An effective performance appraisal process can help identify, and document under-performers, allowing for a smooth transition if the relationship needs to be terminated.

6. Documented History of Employee Performance

All organizations must keep performance records on all employees. 

The goal is to maintain a historical record of an employee’s performance and development journey so a new manager can get a sense of progress over time.

This is a document that should be kept in the employee’s personnel file.

7. Allows for Employee Growth

Motivated employees value structure, development, and a plan for growth. 

An effective performance management system can help an employee reach their full potential, which can be a positive experience for both the employee and manager.

A good manager takes pride in watching an employee grow and develop professionally.

Organizations should take a global look at their performance management system and have very objective goals that are tied to strategic initiatives and the performance management process. 

Successful organizations have learned the secret to this. And while not always perfect, striving to constantly improve the process can be one of the best ways to help organizations achieve their Mission.

If you would like to learn more about managing the performance of your employees, you can check out our book on Church Staff Evaluations!