Performance appraisal: The best way to conduct it in 2022

It's 2022 and the way an enterprise evaluates its employees has become more objective, data-driven, and insightful. The purpose of a performance appraisal is to understand how well an employee has been able to align themselves to achieving organisational goals and meet their targets.

Here are some modern ways to conduct a performance appraisal in 2022 -

Management by Objectives

An approach to measuring performance appraisals, MBOs focus on the objectives achieved by an employee on an individual level. This process involves using Specific, Measurable, Achievable, Realistic, and Time-sensitive (commonly known as SMART) objectives.

OKRs

Objectives and Key Results or OKRs are used to quantify performance. Companies like Google popularly use this method to evaluate the overall team's performance rather than an individual's performance. This method allows employees to focus on collective goals rather than individual goals.

360-degree Feedback 

Most companies use the 360-degree feedback approach to gauge an employee's performance, based on which they decide on the appraisal. To get this approach right, employers gather information and insights from the employee's supervisor, peers, subordinates, customers, vendors, etc. along with self-evaluations of the employee. This helps employers understand the employee's performance from a wider and more wholesome perspective.

Continuous Feedback

Instead of having an annual feedback session, most companies have now begun to give continuous feedback to their employees. This approach helps an employer deliver feedback on a more real-time basis to the employee, so the employee can use the criticism constructively and apply it to their work to make room for improvement.

Stacked Ranking

A stacked ranking approach works well for companies with larger and more competitive environments. Here, the employer stacks the employees according to their performance. Appraisals are given to the top-performing employees, and the poorly performing employees may be asked to leave.