Performance appraisal in a broad sense is the continued method of evaluating individuals on their behaviour and performance at work with the intent of helping improve them, thus increasing their job satisfaction and adversely effecting the business.

General Performance Appraisal Formats

• Prose/essay - A written document stating strengths, weakness and potential. Faults with this include time consumption as well as no control over areas appraised.
• Critical incident - Recording of events by appraiser. An incident is critical when it illustrates what the employers has done or failed to do - resulting in abnormal success or failure. This type of recording is more fact than opinion.
• Forced Choice - Choice of one of many options to describe main characteristics of individual (i.e. a multi-choice answer). Common problem is the reduction of many traits to just one answer.
• Forced Distribution - Forced to assign a certain proportion of all workers to each particular group. Similar to above. This method is based on the assumption that the distribution of employees performance is always able to be allocated in predetermined directions.
• Ranking Method - Used to rank each individual against others (i.e. you are rated 10, he is rated 8 etc.). Useful when you have several reports from multiple assessors, but does not allow for individuals to pinpoint their strengths or weaknesses for improvement. This system works very much on global judgments of performance over all.
• Graphics Performance Scales - These permit the appraiser to rate and individual along a multi-point scale for each characteristic being assessed. These scales can be supplemented by specific comments so that the appraiser can avoid the difficulties inherent in the standard layout of the appraisal form.
• Self Appraisal - This system is usually developed with other such systems of appraisal. This system lacks from the authoritarian appraisal methods.
• Goal Appraisal Methods - Often named "management by objective" such schemes place the appraisal and the appraisee in a situation where mutual agreement on objectives is required, and the focus is on achievement.

Traditional Problems with Appraisals

• Halo effect - One trait of the individual effects the others bias. Graphic forms are susceptible to this problem.
• Central tendency - Supervisors tend to play it safe and rate everyone generally so that they do not get questioned about their judgment.
• Leniency/strictness - Some supervisors constantly under or over rate their staff.

For appraisals to work correctly, top management must support the scheme. The paper work involved must not be over bearing, cause it may just not be looked at or simply put aside ( detracting from importance of appraisal). All reasons for the appraisals must be followed up till the end, otherwise they will be ignored. All staff must be trained in the area of appraisal so that each knows what is expected of them - if this is not so, the traditional dysfunction will inevitably occur and a lack of commitment and acceptance will take place. The appraisals should never become ritualistic. Their purpose must be reviewed, and each person should understand and believe in why they are being performed. If this is not the situation, it will become a hindrance, and only prove to cause more problems than it solves.