The meaning of the word “appraisal” is “to fix a price or value for something”.

This is used in finance

in terms such as project appraisal or financial appraisal where a value is attached to a project. Similarly
performance appraisal is a process in which one values the employee contribution and worth to the
organisation.

Employees across the entire organisation are appraised of their performance. This could be done
annually, twice a year, periodically depending the need of the organisation. Performance appraisal is a
systematic and orderly evaluation of performance of employees at work by their superiors or others
who are familiar with the techniques of performance appraisal. A performance appraisal is a formal
review of employee performance. At a performance appraisal, objectives or targets are agreed between
manager and employee. At each subsequent appraisal, current and past performance is compared and
targets are reviewed.

Performance appraisals are essential for the effective management and evaluation of staff. Appraisals
help develop individuals, improve organizational performance, and feed into business planning. Formal
performance appraisals are generally conducted annually for all staff in the organization. Each staff
member is appraised by their line manager. Performance appraisals are also essential for career and
succession planning. Performance appraisals are important for staff motivation, attitude and behaviour
development, communicating organizational aims, and fostering positive relationships between
management and staff. Performance appraisals provide a formal, recorded, regular review of an
individual’s performance, and a plan for future development. In short, performance and job appraisals
are vital for managing the performance of people and organizations.

360 DEGREEE PERFORMANCE APPRAISAL

In 360-degree performance reviews, many different types of people are consulted about an employee’s
performance. This includes customers, suppliers, peers and direct reports. In the case of a manager,
employees are often asked to give “upward feedback” on how well they are being managed. If 360-
degree performance reviews are performed, a Human Resources manager should coordinate the
process, so that subordinate reviewers (i.e., employees) are assured that their performance reviews are
kept anonymous.

The aim is to find the gap between one’s own appraisal and the perceptions of others. This will in turn
enable a professional to analyse his strengths and shortcomings and accordingly improve his
performance. While it is true that the system serves as an excellent process since it reduces biases, it is
not always successful. It is necessary to create the right culture in the company before introducing the
system. If many people are unhappy or their morale is low, the situation can turn disastrous as some
staffers will become obvious targets.

ADVANTAGES OF 360 DEGREE APPRAISAL

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Provides a more comprehensive view of employee performance.
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Increases credibility of performance appraisal.
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 Feedback from peers enhances employee self-development.
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Increases accountability of employees to their customers.
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The combination of opinions can approximate to an ‘accurate’ view
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Comments expressed by several colleagues tend to carry weight
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Some skills are best judged by peers and staff, not by manager alone
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Feedback may be motivating for people who undervalue themselves
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The wider involvement help to engender a more honest organizational culture

DISADVANTAGES OF 360 DEGREE APPRAISAL

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Time consuming and more administratively complex.
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Extensive giving and receiving feedback can be intimidating to some employees.
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Requires training and significant change effort to work effectively.
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Results can be difficult to interpret
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Feedback can be damaging unless handled carefully and sensitively
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Can generate an environment of suspicion if not managed openly and honestly

The 360-degree appraisal significantly differs from the traditional supervisor-subordinate performance
evaluation. Rather than having a single person play judge, a 360-degree appraisal acts more like a jury.
The people who actually deal with the employee each day create a pool of information and perspectives
on which the supervisor may act. This group of individuals is made up of both internal and external
customers.

Using 360-degree appraisals provides a broader view of the employee’s performance. The most
obvious benefit of the 360-degree appraisal is its ability to corral a range of customer feedback.
Because each customer offers a new, unique view, it produces a more complete picture of an
employee’s performance. Unlike with supervisors, employees can’t hide as easily in 360-degree
appraisals because peers know their behaviors best and insist on giving more valid ratings. In addition
to providing broader perspectives, the 360-degree appraisal facilitates greater employee self-
development. It enables an employee to compare his or her own perceptions with the perception of
others on the employee’s skills, styles, and performance.

PEER-TO-PEER EMPLOYEE PERFORMANCE EVALUATIONS

Peer-to-peer employee performance evaluations require employees at the same level to review each
other. The thinking behind peer-to-peer employee performance evaluations is that nobody knows a
worker’s ability better than his or her co-workers. While this can be an effective review format for
some groups of workers (for example, a team of doctors working on a research project together, where
specific content knowledge is required), it can also cause controversy because of the way it affects
future group dynamics. When evaluating the use of these types of employee performance evaluations,
consider the maturity level of the employees involved and the long-term effects that could result from
the source of negative reviews getting back to the team members.

SELF-ASSESSMENT PERFORMANCE REVIEWS

Self-Assessment performance reviews are effective when combined with any of the other three types of
performance reviews. With this type of review, employees are asked to rate themselves, often using the
same form that a manager will use to review them. Self-assessment performance reviews help make the
employees an active part of the process and provide a vehicle for them to reflect on their own
performance prior to the formal review.
Studies have shown that employees are usually harder on themselves in self-assessment performance
reviews, than their managers and generally give themselves lower ratings. Having employees do self
assessment performance reviews prior to a manager’s review can set a positive tone for the meeting, as
the manager will often have better things to say than the employee has said about him or herself.

DOWN TO TOP EMPLOYEE PERFORMANCE EVALUATIONS

Down-Top employee performance evaluations tend to be one of the most common and most effective
method, because they involve the assessment of an employee by its subordinate. Down to top employee
performance evaluations are most useful when given by an employee’s immediate subordinate –
someone who works with that employee everyday and knows his or her strengths and weaknesses. The
Down-Top employee performance evaluation becomes less effective when given by a Human
Resources manager who has only second-hand knowledge of an employee’s performance.

TOP – DOWN EMPLOYEE PERFORMANCE EVALUATIONS

Top-down employee performance evaluations tend to be the most common and most effective, because
they involve the assessment of an employee by a direct manager. Top-down employee performance
evaluations are most useful when given by an employee’s immediate supervisor – someone who works
with that employee everyday and knows his or her strengths and weaknesses. The top-down employee
performance evaluation becomes less effective when given by a Human Resources manager who has
only second-hand knowledge of an employee’s performance.

One offshoot of top-down employee performance evaluations are “matrix” employee performance
evaluations, where multiple managers rate the same employee. This is a good choice when the
employee works for multiple managers, or engages in various fixed-time length projects