Performance appraisal is a process that falls under the task of Human Resource Management. Performance Appraisal does not mean that the organization will fire employee whose evaluated results are not up to the mark. It means evaluating the performance of the employee on the job. Performance appraisal is meant to tell the employees as to how they can improve their performance on the job.  Performance appraisal can be done semi-annually or yearly but usually the appraisal happens annually. Performance appraisal is not directly linked to business strategies or objectives. Appraisal encourages healthy competition among employees. Performance Appraisal is either Solemn (formal) or informal. In Informal appraisal, the employees don’t know that they are being evaluated. The officials hired for doing appraisal observes the employee while he is working without letting them know that they are being observed. Advantage of this form of Appraisal is:

  • Official gets to know how the employee actually does his work.
  • How much time employee takes to complete his work?
  • Whether the employee is hopping towards his duty or not.

Solemn Appraisal is when employee already knows that his/her appraisal is taking place. There are certain disadvantages of formal appraisal. Some disadvantages are:

  • Every employee wants adulation and of course they will do try to perform brilliantly during the time of appraisal.
  • Actual reaction of the employee at workplace can’t be noticed.
  • May lead to wrong appraisal decision by appraising the wrong person

Although formal appraisal is a blessing for employees and the easiest way to get appraised as for future promotions and demotions are considered by every organization. A person performing his role brilliantly will obviously receive promotion in his/her role.

There are usually 3 methods for evaluation of employees:

  • Peer Appraisal
  • Self-Appraisal
  • 360 degree Appraisal

Peer appraisal is when the peer of employee evaluates him/her and tells whether he performs his duties well or not. It is a biased approach because it may happen that a peer feels jealous and may not give a true picture or the real picture of the employee performance. Self-appraisal is self-explanatory as well. Employee has to analyze and tell the overview of his/her performance.  Similar to the previous method this method too is a biased method because even a scatter-brained person will rate his/her performance as excellent. These two methods can’t tell the pragmatic view on employee performance. The third method in the list is 360 degree feedback. This method was first used in between the period of 1940-50. In this appraisal the employee is evaluated by peers, manager of the employee and a direct report of the employee. In it an employee receives a classified and ceremonial feedback from the person that is in the same workplace (usually in the same department). 360 degree appraisal includes both self-appraisal and peer appraisal. The process of 360 degree appraisal includes the following steps:

  • Respondent evaluates the performance of the employee.
  • Submission of the evaluation by respondent based on his view of the employee.
  • Employee submits his/her self-assessment i.e., what is his/her performance on the job according to him/her.
  • A last and final report is created by compiling the previous two assessments.
  • A counselor is appointed who reviews the final report and gives his opinions.
  • Final decision is taken.

This method is called 360 because it takes an overall and a broad view of the employee performance and takes a view point of the people in the workplace and the employee himself. This method can be used from top to lower level of the organization. Any employee that is working for the organization can be evaluated with the help of 360 degree feedback method. The respondent mentioned in the process that evaluates the performance of employee can be any person that is related to the organization. Respondents can be suppliers, peers, subordinates, customers, top level management, etc. 360 degree appraisal doesn’t promote the old school thought where only HR department used to be accountable for the appraisal process. 360 degree is named such because it includes the viewpoints of every section of persons that is related to the organization.

As for any other method the 360 method has its own advantages and disadvantages. Some disadvantages of the 360 degree feedback are:

  • Final report can be still biased because it’s a compilation of the self-assessment and peer assessment which can distract the process from reality.
  • It may take too much time because every person related to organization is considered for the assessment.
  • Personal relations may be spoiled at the cost of the unbiased evaluation.
  • Employees may get pressure of performance so they may make mistakes more often.
  • Employee may feel sulk if the assessments results are poor.
  • A naïve employee may be compared to an experienced employee and he/she might be considered less efficient.

Some of the advantages of the 360 feedback method are:

  • It takes an overall perspective of the people important for organization.
  • If more people are involved in this process it will lead to a more pragmatic and unbiased viewpoints.
  • It helps in increasing morale of the employees.
  • It helps the employee to know about his/her forte and weakness.
  • Opinion of one person is independent from others. For example the view point of supplier is independent from the view point of peers or subordinate.
  • By including diverse groups of people it increases the faith of the employees on the appraisal system.
  • A particular employee from each department may become the epitome for a particular role to set the benchmark for other employees in the organization.

Even after effective and equivalently bold disadvantages the 360 degree appraisal is one considered to be one of the best methods for employee appraisal. Most of the organization follows this method because it includes the self-evaluation and peers assessment method as well.