So, March is here, and most companies are in the different phases of conducting appraisal processes. Of late, there has been a growing sentiment that traditional performance appraisals are losing relevancy. Therefore, many companies have shifted towards a 360° feedback process.
Both performance evaluation techniques have pros and cons and can be effective tools for improving employee performance if used correctly. However, before diving deep into appraisals, let’s understand why the performance appraisal is required in the first place.
- It makes employees conscious and aware of their current performance.
- It helps companies modify employee behaviour and cultivate healthy working habits.
- It provides essential data that helps the organization with compensation and assignments.
- It identifies requirements for training and development based on skill gaps.
The focus of the appraisal remains on the outcomes of employee behaviour. There are two approaches to conducting appraisals.
1. TRADITIONAL PERFORMANCE APPRAISAL:
A traditional performance appraisal process generally occurs between the manager/supervisor and the employee in a one-on-one meeting. The manager’s report is later reviewed by the company’s HR manager or CXOs, based on the employee hierarchy.
A standard performance appraisal process helps decide whether employees should get raises or promotions. If yes, then how much?
Traditional performance appraisal quantifies employee performance in different metrics. In this process, the manager and the employee are aware of the goals defined for the particular appraisal period. The evaluation is done based on the set goals. Scrutinizing measurable data, the traditional performance appraisal focuses on the employee’s hits and misses.
Pros:
• It is a standard way of identifying high-performing candidates and encouraging them with rewards and recognition.
• Traditional appraisal methods like bell-curve shun discrepancies and bring uniformity to the appraisal process.
• It evaluates employee performance using a numerical scale and helps make decisions regarding increments and promotions.
• It is a time-tested method of assessing employee performance.
Cons:
• The traditional method is very time-consuming as the manager has to spend days gathering employee performance data. It typically also involves a considerable amount of paperwork.
• The traditional method is rigid as it disallows skills, traits or work beyond evolution criteria, depriving some employees of well-deserved benefits.
• Most importantly, if the manager or supervisor is biased, it may become futile. As a result, the traditional appraisal method can also create a hostile atmosphere in the workplace.
• In a team project, it may become difficult for the manager to accurately point out an individual’s contributions and failings.
2. 360° FEEDBACK PROCESS:
Contrary to the traditional appraisal method, in the 360° feedback process, employees receive anonymous and confidential feedback from not just one but multiple stakeholders. In this approach, feedback is also obtained from external stakeholders such as customers, vendors, etc. Apart from them, the views of co-workers, supervisors, teammates and various reports are also taken into consideration.
360° Feedback Process is like collecting a broad range of inputs from many people rather than a deep level of insight from just one person.
Pros:
• 360° feedback process makes employees more aware of their relationships with teammates and stakeholders, rather than just focussing on maintaining good terms with the manager.
• This appraisal helps assess employees’ human skills like leadership, communication, and teamwork beyond their job responsibilities.
• It encourages employees’ holistic growth by highlighting their strengths and weaknesses.
• It helps employees realize how they are perceived by others, giving them opportunities to improve upon weak areas.
• Since it is anonymous, it allows co-workers to raise flags comfortably.
Cons:
• Negative feedback can create resentment in the team, giving birth to more conflicts.
• One cannot expect everyone to be honest while giving feedback about their colleague or teammate. Hence, this method is not always accurate.
• It is difficult to track anonymous feedback. Therefore, it becomes challenging for the manager to address and resolve issues.
• Since 360° feedback requires data from many people, the exercise can be enervating and time-consuming for the manager.
Both appraisal methods have their pros and cons. Therefore, one should choose approaches carefully considering the organization’s growth vision, team size and nature of work.
