The evaluation is done at all levels of the organization starting from the top to bottom. One of the most common uses of the performance evaluations of employees is when the employer has to take a decision regarding promotions, layoffs and increment in salaries of employees. The information obtained from the performance evaluation of employees determines the training and development needs of both individuals and organization respectively (Millett & Wiesner, 2000). The performance evaluation approach can be rational or political. The rational approach determines the performance of every employee working in an organization while the political approach determines the performance of employee based on agenda and goals of manager (Nel et.al, 2012).

Methods of Performance Evaluation

The popular methods of performance evaluation are as follows:

1. Immediate Manager

2. Peer Evaluation

3. Reverse Appraisal

4. Self Appraisal

5. Customer Appraisal

6. 360° feedback

1. Immediate Manager

The most common and easiest method for evaluating the performance of employee is immediate manager's evaluation (Nel et.al, 2012). The manager is in the best position to observe and monitor the performance of his/her subordinates. The manager can easily rate performance of employee and match the performance with desired results.

2. Peer Evaluation

Peer review is the performance evaluation process in which co-workers of an employee give formal feedback on his performance during a particular period of time (Nel et.al, 2012). Peer evaluation method has replaced the traditional style of performance evaluation procedures in organizations that are team based.

Peer evaluation provides a more comprehensive feedback about employees' performance as compared to the manager's evaluation. However, the feedback of peers might vary and there might be a conflict between employees about the performance of a certain employee. Peers evaluate good and bad characteristics of each other and the quality of work done. Peer evaluation is empowering the employees to assess each other's skills. This method also helps them to enhance their skills to professionally evaluate each other. Employees feel the sense of responsibility which is a benefit for an organization. For example: employees are required to work as a team on a particular project given by their manager. Employees distribute tasks among each other. All the members of a team are required to complete their task on a given period of time. The project is completed and all members of the team receive appreciation for completing their tasks. At the end, the team members can put into practice a peer appraisal method to evaluate each other's performance during the project.

3. Reverse Appraisal

Reverse appraisal is the method in which subordinates provide their feedback about their manager's performance. The skills and capabilities of a manager are evaluated through this method (Nel et.al, 2012). An employee knows well about a manager's capabilities such as planning, organizing his/her staff and how a manager deals with the staff. This method works more effectively in big organizations where employees are present in a large number. The result obtained from this method in large organizations is reliable. Reverse appraisal is the best tool to monitor manager's behavior with subordinates. We can take the example of subordinates working under first line manager. Subordinates can give their feedback about the performance of their first line manager which is reviewed by the middle manager. Similarly, the performance of middle manager can be evaluated by first line managers and their feedback is reviewed by the top manager.

4. Self Appraisal

One of the biggest concerns for every organization is to evaluate its performance, identify weakness and taking certain steps to improve the performance. Self appraisal is one of the methods to evaluate the organization's performance. Self appraisal is the method in which the employees give feedback about the organization's performance by completing a performance evaluation during a particular period of time (Nel et.al, 2012). The employees get a chance to evaluate their organization's performance and participate in the decision making process about how to improve an organization's performance. For example, an organization which is facing a continuous decline in its sale can implement this method. An organization can design a performance evaluation form and direct all its employees to fill the form. Evaluation interviews can also be conducted. The employees can give their suggestions to improve the sales and reports which are prepared to identify the problems. Finally, recommendations are made to improve the sales of the organization.

5. Customer Appraisal

Customer appraisal is an evaluation completed by the customer. Customer appraisal is the method of performance evaluation in which customers give their feedback about the job performance (Nel et.al,...

The customer might be an employee's internal customer or an organization's external customer. The customers might give their feedback on the basis of quality of product or service offered by a company. The feedback by customers can help the organizations to set benchmarks for their services or products. For example, an airline company can publish a questionnaire on its website to evaluate the performance of their air hostess during the flight. The customers visiting the company's website for flight booking can fill the questionnaire and give feedback about the quality of service provided to them. The analysis of questionnaire is done by the company and report can be made to evaluate the performance.
6. 360° feedback

The modern era has introduced 360° feedback system that has revolutionarized the method of performance management. A 360° feedback system has brought a positive change in the organizations (Brett & Atwater, 2001). A 360° feedback system evaluates the performance on the basis of a questionnaire which is filled by employees and customers of an organization to evaluate the performance of individuals working in an organization (Nel et.al, 2012).

Pros and Cons of Performance Evaluation Methods

There are certain advantages and disadvantages of the performance evaluation methods described above. Immediate manager can be the best evaluator but might have a soft corner in his/her heart for a particular employee or he/she might be too lenient to properly evaluate the performance of the employee (Nel et.al, 2012). The peer evaluation is beneficial because employees work together and they know each other. Employees can assess the skills of each other and they can play an important role in the development and progress of their co-workers. They can give an ideal feedback about their co-workers and hence they can contribute in the promotion of their fellows. Their strengths and weakness can be identified by their managers.

The peers' feedback might be more comprehensive than the manager's feedback. As a result of evaluating each other's performances, competition occurs among employees to outperform each other which can increase the performance of the organization as a whole. Employees can communicate their evaluation to further enhance their capabilities and focus on the areas they need to improve. This method ensures the quality of work done by employees because they know that their co-workers are assessing their performances. However, the peers' feedback might not be an ideal feedback process because of certain factors such as friendship among employees which will result in biasness.

The reverse appraisal methods can be effective because it will give feedback about the manager's capabilities, strengths and weaknesses. Manager's performance can be evaluated by using this technique and certain measures can be taken to improve manager's performance because if a manager is not performing well, then this can demoralize his whole staff hence affecting the company's performance. This method is ideal for large organizations as it will ensure anonymity of employees. Trust factor is the requirement of this method. However, this method might not work effectively in small organizations and results might not be reliable because of the limited number of employees and personal agenda of employees against the manager can be a possibility.

Self appraisal can work towards the benefit of an organization as it will allow the employees to participate in a decision making process of the organization and allows them to evaluate performance of an organization. Suggestions from employees to improve organization's performance are one of the outcomes of self appraisal method. On the other hand, there is also a possibility of leniency of employees towards their organization. The attitude of employees plays an important role in self appraisal method. The employees should not show biasness during evaluation process.

Customer appraisal is the method of evaluating performance in which customers give their feedback about the job performance. The customer might be an employee's internal customer or an organization's external customer. Organizations can consider customer evaluation to improve their performance though the feedback given by the customer might be unique and different. However, the objections raised by the customers might not be taken into account by most of the organizations. 360 feedbacks might also work well in large organizations to evaluate someone's performance but might not be an ideal measure because the point-of-views of evaluators might differ from each other (Brett & Atwater, 2001).

References

Antoni, C. (2005). Management by objectives -- an effective tool for teamwork? The International Journal of Human Resource Management, 16(2), 174-184.

Brett, J.F., & Atwater, L.E. (2001). 360 Feedback: Accuracy, Reactions, and Perceptions of Usefulness. Journal of Applied Psychology, 86(5), 930-942.

Kovac, J.C. (2006). The Performance Management Process.…