What are the performance appraisal methods?

I. Managerial Methods:\x0d\ 1. Balanced Scorecard\x0d\ The January/February 1992 issue of Harvard Business Review published "The Balanced Scorecard - A New Approach to Performance Measurement and Driving", co-authored by Robert Kaplan and David Norton. This was the first article on the balanced scorecard. The article suggests that a company's performance should not be evaluated solely on financial metrics, but rather on four dimensions: financial, customer, internal business processes, and learning and development. \x0d\ The Balanced Scorecard was originally developed as a comprehensive strategic performance management and evaluation tool, and over the course of 10 years, the Balanced Scorecard has evolved tremendously in terms of theory, and has been recognized by more and more companies in the field of practice. It is regarded as one of the 75 outstanding business management ideas by Harvard Business Magazine, and is a tool to measure the comprehensive business capability of an enterprise. It measures companies in four important aspects:\x0d\ Financial perspective: the direct purpose and result of business operation is to create value for shareholders. Although the requirements for profit may vary in the long or short term due to different corporate strategies, there is no doubt that profit is always the ultimate goal pursued by an enterprise in the long term. \x0d\ Customer perspective: how to provide customers with the products and services they need, so as to satisfy their needs and improve the competitiveness of the enterprise. The customer perspective is precisely from the quality, performance, service and other aspects, test the performance of enterprises. \x0d\\ Internal process perspective: whether the enterprise has established a suitable organization, process, management mechanism, what are the strengths and weaknesses in these areas, the internal perspective from above, to develop assessment criteria. \x0d\ Learning and innovation perspective: the growth of the enterprise is closely related to the improvement of the quality of the ability of the staff, the enterprise can only continue to learn and innovate in order to achieve long-term development. \x0d\ Balanced Scorecard The biggest feature of the Balanced Scorecard is its balance, which changes the previous flaw of relying only on financial indicators to measure the performance of an enterprise. \x0d\ This method of assessing employees requires an enterprise to have a very clear and specific target system and the ability to decompose the four aspects, at the same time, it is also necessary to establish a comprehensive and large database to provide a source of data for the indicators, in the case of a particular enterprise, not all of the job indicators can be refined or decomposed into these four indicator system, so the implementation of this method requires that the enterprise to carry out the design of the business process on the In accordance with the idea of balanced scorecard to establish, which in the actual application of certain conditions and requirements. \x0d\ 2. Key Performance Indicators KPIs\x0d\ Key Performance Indicators (KPIs) are key indicators for measuring the effectiveness of the implementation of corporate strategy, and their purpose is to establish a mechanism for translating corporate strategy into internal processes and activities, so as to continually enhance the core competitiveness of the enterprise and enable it to achieve high efficiency on a sustainable basis. Through KPIs, we can implement the strategic objectives and business priorities of the enterprise, convey the value orientation of the enterprise, and effectively motivate employees to work hard for the realization of the enterprise's strategy*** with the same efforts. \x0d\ The formulation of KPI should be centered on the "corporate strategy", through the decomposition of the strategy, the formulation of reasonable objectives, and the effective control of the process of its realization, in order to drive the performance of the starting point of the formulation of KPI is the corporate strategy. The starting point of KPI development is the corporate strategy. Each department in the enterprise understands the strategic direction of the enterprise, and then develops work plans and prioritizes its work according to the strategy. The results of the performance appraisal show the extent to which the employee's performance and the company's performance have been realized, i.e. whether the company's strategy has been successfully implemented. Therefore, after the performance appraisal has been done on the employee, the compensation lever should be used to reinforce the employee's performance behavior. \x0d\ 3. Objective Management Appraisal System\x0d\ Objective management method is a widely used performance appraisal method in companies. The specific method is that at the beginning of the appraisal period the appraisee and the supervisor formulate the work objectives to be achieved during the appraisal period according to the organization's objectives. The appraiser reviews the appraisal with the appraisee against the objectives at the end of the appraisal period and scores the appraisal according to the degree of completion of the objectives. \x0d\ The advantage of the goal management method is that it can effectively guide and monitor the work behavior of employees through the formulation of goals, and at the same time strengthen the employees' sense of self-management so as to improve their work performance. The achievement of goals as scoring criteria, assessment objectivity is stronger. Disadvantage: The process of setting goals is complicated, time-consuming and costly. Objectives and scoring criteria vary from employee to employee, so the final assessment scores are not comparable among employees of the same level, and it is difficult to use them as the basis for salary increases and bonuses. When the objectives set are not clear and measurable, the management by objectives method often faces failure. At the same time the objective management method in the implementation process, often tend to focus only on short-term benefits, while ignoring the realization of long-term benefits, so in reality there are certain limitations and problems in using only the objective management method to evaluate performance management. \x0d\ 4. 360 Degree Appraisal System\x0d\ This appraisal method evaluates the appraisee through his superiors, peers, subordinates and service clients, so that the appraisee is aware of the opinions of all parties, and is clear about his own strengths and weaknesses, in order to achieve the purpose of improving his own ability. 360 Degree Appraisal Method is divided into 4 groups of supervisors, peers, subordinates, and service clients who have a connection with the employee being evaluated, plus the employee himself. The employee himself. An outside consultant can also be used to analyze the results of the evaluation and finally write a report to the employee being evaluated. The content of the appraisal is mainly related to the company's values, and the appraisal analysis form is designed in detail so that all participants in the appraisal have their own evaluations of each item, which are finally analyzed by a specialized consulting firm to arrive at the appraisee's evaluation results. If the appraisee finds that the evaluation of a group is low on any point, he can find several people in the group to communicate with him and ask "I want to be helped", so that they can exchange views openly. 360-degree appraisal is shown in the following diagram: \x0d\ Superior Appraisal\x0d\ Peer Appraisal Employee Self-appraisal Client Appraisal\x0d\ Subordinate Appraisal x0d\ Lower Level Appraisal\x0d\ Fig. 360 Degree Appraisal\x0d\ (1) Upper Level Appraisal\x0d\ Upper Level Appraisal is mainly conducted by the employee's direct supervisor on the employee because the employee's direct supervisor is the one who understands the employee's job duties, work performance, and work ability, and he/she can assess the employee's work ability and performance through a variety of opportunities. \x0d\ (2) Peer Appraisal\x0d\ (2) Peer Appraisal \x0d\ Peers are often very familiar with the employee's work situation and the source of information is very real. For when the nature of the work requires the cooperation of more than one department, the use of peer appraisal can obtain more objective and accurate information. However, when there is a competition between peers due to the nature of the work, the fairness and validity of the appraisal between peers will be reduced. \x0d\ (3) Subordinate Appraisal\x0d\ This type of appraisal is more applicable to managers, i.e., the appraisee's direct subordinates or indirect subordinates appraise him/her. The appraisal is mainly about the manager's responsibility, management style, guidance, training, motivation and communication to subordinates. \x0d\ (4) Customer Appraisal \x0d\ If the nature of the employee's work requires dealing with a larger number of external customers, the appraisal information obtained from the customer will often be more conducive to a more comprehensive evaluation of the employee, therefore, customer appraisal is usually more commonly used in the service, sales, and other departments that need to deal directly with external customers. Appraisals are usually conducted in the form of questionnaires and customer interviews. \x0d\ (5) Employee's own appraisal \x0d\ Employee's own appraisal is also known as self-assessment, which is used to evaluate their own performance, work performance, etc. However, when the appraisal is conducted, the employee's own understanding of the content of the appraisal and the criteria for the appraisal may not be the same as that of the supervisor's understanding, and the conclusions may be superior to those of the supervisor's appraisal results, which is mainly due to the bias in the attribution of the employee himself and a higher self-evaluation. \x0d\ 360-degree appraisal system has the characteristics of full participation in management, symmetrical information collection, and the ability to decentralize the daily management efforts of managers, but it has a complex assessment process, a wide range of statistical processes, and is prone to consequences such as strained interpersonal relationships or low credibility when the quality of personnel is not high. \x0d\ II. Statistical Related Methods:\x0d\ 1. Hierarchical Analysis \x0d\ The Analytic Hierarchy Process (AHP) is a decision-making method that breaks down the relevant elements of a decision-making problem into a hierarchy of objectives, quasi-measurements, and scenarios, on the basis of which qualitative and quantitative analyses are conducted. This method is characterized by constructing a hierarchical model after an in-depth analysis of the nature of the complex decision-making problem, the influencing factors and their intrinsic relationships, and then mathematizing the decision-making process by using less quantitative information, thus improving a simple decision-making method for solving complex decision-making problems with multiple objectives, multiple criteria and unstructured characteristics. \x0d\ The general steps of AHP problem solving are:\x0d\ (1), construct a hierarchical model \x0d\ Construct a recursive hierarchy, that is, classify and analyze the problem under study, and construct a recursive hierarchical model in which the various factors are interconnected. \x0d\ (2), Establishment of Judgment Matrix \x0d\ Judgment Matrix refers to: the comparison of the relative importance of the relevant elements of the present level connected to the previous level with respect to the previous level in the progressive hierarchy model established above. \x0d\ (3), calculate the weight vector \x0d\ Calculate the importance of the relative elements under a single criterion, that is, hierarchical single ordering, according to the judgment matrix to calculate for the upper level of an element, the relative importance of the order of the weight of the elements connected with, can also be reduced to the calculation of the characteristic roots and eigenvectors of the judgment matrix. There are three main methods: sum method, root method and eigenroot method. \x0d\ (4), conduct consistency test \x0d\ 2. Principal Component Analysis \x0d\ The Principal Component Analysis method is a multivariate statistical analysis method that transforms the original multiple indicators (variables) into a small number of mutually independent composite indicators through orthogonal transformations. This allows the original indicators to be recombined into a new set of composite indicators that are unrelated to each other, i.e., the information does not overlap with each other, to reflect a higher proportion of the amount of information carried by the original indicators. Therefore, principal component analysis is a multivariate analysis method that utilizes the idea of dimensionality reduction to transform multiple indicators into a few composite indicators. These resulting composite indicators are linear combinations of the original variables, and the composite indicators not only retain the main information of the original variables and are not correlated with each other, but also have certain superior properties than the original variables, which enables us to grasp the main contradictions when studying complex problems and realize scientific analysis and evaluation of the problems. Therefore, principal component analysis is widely used in social and economic statistical research.