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Types of employee performance appraisal systems

There are many types of employee performance appraisal systems. The best are designed to help employers to recognize and reward workers fairly and help workers understand what they contribute to their organization.

Employee performance appraisal systems provide a framework for improvement and development. Good performance appraisal systems are motivating for employees, because they help them work towards their own career goals as well as hitting employer targets. Less evolved appraisal systems are designed to achieve HR compliance and can be constraining rather than motivating.

Appraisal systems are typically based on a set of individual objectives for each employee, which they agree with their manager. At regular intervals, often annually, their manager will assess how well they’ve performed against them. Employees come to their appraisals with evidence to back up their achievements. They may receive a numeric or verbal rating – for instance on a scale of 1/outstanding to 5/unacceptable.

Another popular system is 360-degree feedback, where co-workers, managers, customers, suppliers and subordinates all give feedback about the employee. These reviews from the employee’s “internal customers” are used to measure performance.

Performance appraisals may also be behavior-based or trait-focused, designed to encourage employees to work in a way that supports the company values and culture. Today, companies are moving away from rigid annual processes towards a more flexible approach, designed to reinforce the critical behaviors that drive high performance in the organization.

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