Common Performance Appraisal Methods

Hospitality organizations can use several approaches and methods for performance appraisal, and HR managers have an obvious role in their selection. Three
philosophically different approaches involve absolute standards, relative standards, and targeted outcomes, detailed as follows.

Absolute Standards

When an absolute standard appraisal method is used, employee performance is compared to an established standard independent of any other employee.
Examples of absolute standard evaluation methods include:

  • Critical incident . Critical incidents are those specific behaviors essential ( critical) to doing a job successfully. With this approach, behavioral traits that employees exhibit on the job (the critical incidents) are documented in writing. For example, an observation about Nia, a bartender, might be: “ Nia showed poise, maturity, and patience with an agitated guest after she could no longer serve him alcoholic beverages. She calmed him down, and he ordered coffee. ” Note that the incident report focuses on Nia ’ s behaviors and their results, rather than on Nia ’ s personal traits. One advantage of this method is that, during a formal appraisal session, the discussion can address specific positive and negative critical incidents to help support an objective evaluation of the employee ’ s performance. A disadvantage is that frequent documentation can be time consuming.
  • Checklist appraisal . As shown in Figure 1 , yes or no responses are used to address behavioral factors applicable to the successful completion of tasks identified in a job description. While the checklist can be modified to apply to specific positions, this can become a disadvantage if individualized checklists must be prepared for multiple job categories and positions.
Figure 1: Partial Laundry Worker Checklist Evaluation
1. Laundry supervisor’s instructions consistently followed ______ ______
2. Quantity of work performed consistently acceptable ______ ______
3. Quality of work performed consistently acceptable ______ ______
4. Work area consistently kept clean ______ ______
5. Dryer maintenance (lint filters cleaned) consistently performed ______ ______
6. Responds willingly to special linen and terry cleaning requests ______ ______
FIGURE 9.3: Partial Laundry Worker Checklist Evaluation
  • Continuum appraisal . This approach uses a scale to measure employee performance relative to specific factors. The point on the scale that best represents the employee ’ s performance is selected. Continuum appraisal questions that address two factors: work quantity and dependability. Note that each performance factor is carefully defined to maximize consistency among those conducting the appraisals.
  • Forced – choice appraisal. This appraisal method is a special checklist in which the evaluator must choose between two (or more) alternative statements that describe two (or more) opposing choices. Alternative statements may be favorable or unfavorable, and the appraiser selects the statement that is most descriptive of the employee being evaluated. An example of this approach follows:

Which of the following tasks is best performed by the employee?:

 Those involving detailed guest – service interaction

 Those involving detailed non- guest- service duties

Because there is no right answer associated with questions of this type, these appraisal systems can only be properly scored by professionals who are very familiar with the device ’ s specific design and intent.

Relative Standards

When HR managers use a relative standard of performance appraisal, they compare one employee ’ s actions to those of another employee. The two most common approaches to this appraisal alternative are group order ranking and individual ranking. Group order ranking . Group order ranking requires the evaluator to place the employee into a specific classification, such as the top 10 percent or lower 50 percent. This approach is often used when evaluating employees for possible promotion.

Assume that Julia is the dining room supervisor at a restaurant and that she supervises 20 servers. She must rank (compare to each other) all 20 employees. For example, if the system asks Julia to identify her top 10 percent of employees, she must identify only her top two employees (10 percent of 20 employees = 2 employees).

One advantage of this appraisal system is that raters cannot inflate evaluations, so everyone is rated above average, nor can they rate nearly all employees as average (outcomes that are not unusual with the continuum appraisal systems described earlier).

A disadvantage, especially with small groups of employees, is that some individual or individuals must always be rated in the below – average group, regardless of their actual talent level. A second disadvantage is that a supervisor with clearly inferior workers will still generate groups of best and worst staff members (although the best employees may simply be the best of the worst!). Conversely, a supervisor with a group of outstanding employees must still rank some of them in a below – average group.

Individual order . This ranking method requires supervisors to rank employees in order, from highest to lowest. Only one employee can be rated as best, and ties are typically unacceptable.This system tends to work best with smaller groups of workers. However, because this system also represents an ordinal level of measurement, the rank achieved does not indicate the magnitude (size) of differences between the ranks. For example, if 10 employees are ranked, there is no real rationale for believing that the difference between the first – and second – ranked employees is equal to the difference between the ninth – and tenth – ranked workers. The system is simple, but it is a subjective, not objective, system.

Targeted Outcomes

A third approach to employee evaluation involves the identification of targeted (achieved) outcomes . Employees are evaluated based on how well they accomplished
a specific set of objectives deemed critical to successful job completion. For example, restaurant managers might be evaluated primarily on whether they did (or did not) achieve preestablished food and/or labor cost percentages and net operating income targets.

Among increasingly popular targeted outcome appraisal systems are those utilizing rating scales designed to award employees for the exhibiting specific behaviors. Behaviorally Anchored Rating Scales ( BARS ) and Behavioral Observation Scales ( BOS ) both seek to rate employees along a continuum; however, the points on the continuum represent examples of actual behaviors on a specific job, rather than general descriptions or traits.

Management (hopefully in conjunction and consultation with employees) should set and communicate the employee ’ s targets or goals, whether they are of a financial, attitudinal, or behavioral nature.An inherent advantage of this approach is that those employees who know their goals and who participate in establishing them will more likely work diligently to achieve them. Note : Goal setting and goal achievement measurements and rewards are not new concepts. Management by objectives (MBO) , the concept of using identifiable objectives to measure performance and to assign employee rewards, is decades old.

Essentially, a targeted outcome appraisal system requires four components:

  • Identification of potential performance targets
  • Employee input in final target selection
  • A defined time period for target completion or achievement
    Performance feedback (appraisal)
  • Properly managed, targeted outcome appraisal systems can be successfully implemented at all levels of a hospitality operation.


Several other methods can be used for performance appraisal or, more typically, can be used in conjunction with other approaches. While performance appraisal is
primarily a managerial task, employees can play a valuable role in their own performance evaluations. While many employees believe their input would be helpful, few managers seriously consider self – evaluation information. This is often a mistake because valuable information can be lost. Consider a current or previous job you have held, and then think about the self – appraisal questions in Figure 2 . How much would a manager learn about your work performance if you could address such questions?

Guests can provide additional information helpful for performance appraisal. Consider, for example, comments that guests might make on guest comment cards or in surveys in response to questions designed to solicit this input. In addition, some hospitality organizations utilize peer evaluation information to generate the perspectives of those at the same organizational level and upward assessments that involve feedback from one ’ s subordinates. These methods can be combined with a traditional appraisal approach involving the perspectives of one ’ s own supervisor with a 360- degree appraisal method.

Some industry observers forecast the role of employee teams to increase in importance in the future. As this occurs, teams may be involved in determining work responsibilities and schedules, performance standards, and even play an increased role in compensation and team peer evaluations. Team members might use factors such as initiative, creativity, teamwork, communication skills, and collegiality to evaluate their peers.

HR managers may purchase performance appraisal tools from companies that specialize in their development, or they may create their own assessment devices internally. A primary consideration in their use remains the same: to adopt a system that is fair to the employees, that benefits the organization, and that meets applicable legal requirements. Any tool used for performance appraisal must be reliable and valid. In this context, reliability and validity have very specific meanings.

Reliability refers to the degree to which a measurement tool delivers consistent and dependable measurements. A performance appraisal instrument is reliable
if it consistently measures the employee trait being evaluated. Assume you are preparing a recipe for a dessert, and exactly one tablespoon of flour is needed. A
reliable measuring device (a one – tablespoon measure), if properly used, will consistently (reliably) measure exactly one tablespoon of flour. Contrast that situation with the use of a one – cup measuring device, in which you must guess the amount to put into the cup to yield one tablespoon. A reliable measurement device is available in the first example, but not in the second case.

Reliable appraisal tools must also possess validity. Validity is the ability of a measuring tool to evaluate (measure) what it is actually supposed to evaluate. Even with use of a reliable measuring device, the cook could accurately and dependably measure the wrong thing. Consider the previous example: assume a one – tablespoon measure was used to measure salt instead of flour. While the measuring device was reliable, it would consistently measure the wrong ingredient if salt, not flour, were added to the recipe. In this case, the recipe results would not be good, despite the reliability (but not validity) of the measuring device.

To better understand the validity concept in performance appraisal, assume that a supervisor is evaluating a front desk agent relative to the employee ’ s speed when guests are being checked out of the hotel. On a personal level, this employee appears not to care for the supervisor very much, and thus rarely engages the supervisor in general conversation (e.g., “ How are you today?” , “ How was your weekend? ” , and other general comments of that nature).

If the supervisor can ignore this less than friendly (to the supervisor) trait, and focus solely on evaluating the speed of the employee when checking out guests, that measurement will be valid. If, however, the supervisor (because of the employee ’ s lack of sociable conversation) subconsciously deflates the speed of check – out score, then the supervisor is most likely assessing friendliness to him or her, rather than speed, and thus the speed of check – out score would not be valid.

Reliability and validity can be complex concepts. Some companies use sophisticated procedures to calculate the reliability and validity scores of the performance appraisal devices they use, but others do not. Those using the results of unreliable and/or invalid assessment devices to make decisions about employee promotion, discipline, and/or termination risk significant legal liability.

Human resources managers should know about additional challenges related to the legitimate measurement of employee performance. Some evaluation actions, if taken, can threaten and even invalidate the results. Figure 3 presents seven significant threats to legitimate appraisal and specific examples of their occurrence.

FIGURE 2: Sample Employee Self-Evaluation Questions

1.What skills and knowledge do you possess that our work team would find difficult to
2.What have you done, on your own, in the past six months to maintain your job
3.What have you done in the past six months to fine-tune your work skills?
4.Identify specific instances when, in the past six months, you have gone beyond what persons in your position are expected to do to directly benefit our company and our goals?
5.In one sentence, how would you describe the main reason you contribute to our team’s long-term success?
6.Describe some instances when you have gone beyond what you are expected to do to help team members accomplish their goals.
7.What specific traits make you better than average at what you are assigned to do?

FIGURE 3: Threats to Fair Performance Appraisals
1. Basing evaluation scores on the employee’s most recent behavior rather than evaluating the entire performance period For example, rating a usually outstanding employee negatively based on a recent
2. Allowing irrelevant or non-job-related factors to influence the evaluation
For example, evaluating physical appearance or disabilities, race, social standing,
participation in employee assistance programs, or use of excused time-off instead of actual performance.
3. Failing to include unfavorable comments on the evaluation, even when justified
For example, not wishing to offend an employee by not discussing undesirable traits,
such as poor personal grooming or consistent display of a negative attitude.
4. Rating all subordinates at about the same point on a ranking scale, usually in the middle For example, the tendency of supervisors, because they want to be liked by all
employees, to avoid strong negative (or even positive) statements about their employees.
5. Judging all employees too leniently or too harshly For example, the tendency of some supervisors, wanting to enhance their own credibility, to unfairly criticize (or praise) the performance of those they are evaluating.
6. Permitting personal feelings to bias the evaluation process For example, the tendency of some supervisors to rate employees they like very highly,
while rating employees they dislike much lower.
7. Allowing one very good (or very bad) trait to affect all of the other ratings of the employee (the halo effect and the pitchfork effect). For example, rating an employee with one exceptional (or unfavorable) trait as equally exceptional (or unfavorable) in all other measured criteria.