Performance Appraisals Examples

A performance appraisal is a periodic review of an employee’s job performance and by extension, their contribution to the organization.

Understanding performance appraisals

Performance appraisals are part of a suite of procedures that collectively form part of a performance management system. Instead of annual reviews that focus on the past and not on the future, these systems review and monitor performance consistently and systematically over the course of the whole year. 

Performance appraisals are conducted by either the employee, manager, or human resources representative. But the appraisal itself tends to be a one-on-one meeting where the following topics are discussed:

  • The reinforcement of acceptable standards of performance, behavior, and outcomes in line with business needs.
  • Reward for outstanding performance in the form of a promotion, pay rise, or simply some positive feedback. Similarly, areas where performance is sub-par should be addressed and a plan devised to improve it.
  • The scheduling of future meetings to follow up on performance or ensure the development program is progressing as intended.

Organizations can make the performance appraisal as formal or casual as they desire. But generally speaking, it is a good idea to conduct the meeting in a quiet environment where both parties can be understood without distraction.

Performance appraisal methods

The performance appraisal method chosen will depend on the role of the employee who is being appraised, the desired level of formality, and the extent to which work output or behavior is observable in isolation.

Irrespective of the method, however, it’s important to avoid a wholly top-down approach where a leader evaluates the performance of a subordinate with little or no input from the subject themselves. It is also vital to internalize employee performance results and avoid a situation where appraisals are characterised by nothing more than company buzzwords or jargon.

With that in mind, here are three methods that make performance appraisal rewarding and valuable for both the employee and the organization.

Management by objectives (MBO)

Management By Objectives
Management by objectives was popularised by notable management consultant Peter Drucker in his 1954 book The Practice of Management. Management by objectives (MBO) is a model used to improve organizational performance by defining objectives agreed upon by both management and employees.

Management by objectives involves managers and employees working together to identify, plan, organize, and communicate key focus objectives over a set period. Progress is reviewed either quarterly, half-yearly, or annually.

The overriding aim of MBO is to match organizational goals with an employee’s goals that are set using the SMART method. After each review period and depending on the results, the employee is either rewarded with a salary increase, transferred to another department, or required to undertake additional training.

MBO places more emphasis on tangible goals that can be measured, with relatively little room in the process for intangible aspects such as motivation, experience, and buy-in. This makes it better suited to evaluating the output of senior staff such as directors and executives.

360-degree feedback

360-degree feedback is a comprehensive performance feedback strategy for employees. Traditionally, performance feedback was solely given by the employee’s direct superior. In 360 degree feedback, however, anonymous feedback is given by a range of individuals that the employee has a working relationship with. These include managers, colleagues, and in some cases, customers.

360-degree feedback was introduced into the business world at the Esso Research and Engineering Group (now Exxon) in the 1950s.

As the name suggests, 360-degree feedback is a comprehensive performance appraisal method. It is a multidimensional approach requiring feedback to be sought from an employee’s manager, direct report, customers, and colleagues. The employee is even encouraged to provide feedback on their own performance!

Although 360-degree feedback started in multinational corporations, its popularity has trickled down to smaller companies. In very general terms, there are five key components to this performance appraisal method:

  1. Self-appraisal – as we noted, the employee can analyze their past performance to determine any strengths or weaknesses. To avoid personal biases skewing results, however, there must be structure and formality to this process.
  2. Managerial review – a traditional and necessary part of any appraisal.
  3. Peer review – as many organizations shift away from hierarchical leadership, an employee’s colleagues are increasingly important sources of feedback. They can clarify whether the individual works well in a team, uses initiative when required, or embodies organizational values.
  4. Subordinate appraising manager (SAM) – also known as upward appraisal, the SAM process involves managers being appraised by their employees. This is a controversial practice for some, but for senior managers in particular, it is a vital source of performance feedback.
  5. Customer/client reviews – this may comprise internal customers such as product users or external customers such as suppliers. This component will not be relevant for every company that uses 360-degree feedback.

Behaviourally anchored rating scale (BARS)

The BARS is a system that rates employees according to their performance in specific behavioral patterns. Each pattern is anchored to a numerical rating which serves as a benchmark for acceptable performance. This benchmark, of course, differs according to the employee’s role and level of prior experience.

To determine the benchmark, the behavioral patterns that constitute typical workplace behavior must first be clarified. From this list, the organization must work to edit them into a consistent, standardized format and remove redundancies.

Most organizations use a five, seven, or nine-point scale to measure behavior criteria. For a software engineer who is evaluated against a five-point scale for knowledge of Python, the following levels are representative examples:

  • Level 2Possesses reasonable working knowledge of Python and is able to complete projects under supervision.
  • Level 4Can complete projects in Python and related disciplines without supervision.

Performance appraisal example

Let’s now take a brief look at an example of a marketing employee and their superior who are both required to submit an assessment of the employee’s performance. For the sake of the example, the marketer’s name is John Smith.

The performance rating scale to be used in this example is as follows:

  • 1 (Unacceptable) – fails to meet standards.
  • 2 (Needs improvement) – routinely fails to meet standards.
  • 3 (Satisfactory) – meets standards some of the time.
  • 4 (Outstanding) – exceeds standards regularly.
  • 5 (Excellent) – exceeds standards consistently and reliably.

Now, we’ll conduct a mock performance appraisal across a key objective to increase qualified marketing leads. Note that more exhaustive appraisals will also include a section on professional development and general employee performance factors.


To increase the number of qualified marketing leads by 10% over the previous year. 

Action items 

  1. Create buyer persona profiles with the team by March 1. 
  2. Create and execute 5 to 10 top-of-the-funnel (TOFU) marketing campaigns to generate brand awareness and acquire qualified prospects by December 31.
  3. Monitor marketing-qualified leads (MQLs) weekly and report on results quarterly to adjust each campaign where required.


  1. Five buyer personal profiles were completed in the last week of February.
  2. Ten marketing campaigns were launched via online advertising, trade shows, and a monthly podcast and webinar.
  3. MQLs were tracked and reported weekly, increasing by 12% over previous EOY results.

Employee rating: 4

The key objective was not only met but exceeded and all action items were completed ahead of time. Even with one team member away because of illness for most of the fourth quarter, we worked well collectively and put in the hours to make it work.

Manager rating: 5

John created an action plan that was not only effective but adaptable to our business needs. He also managed to manage his team’s workflow with a minimum of fuss after losing an important member in the fourth quarter. John’s efforts have not gone unnoticed and we look forward to building on this success next year.

Key takeaways:

  • A performance appraisal is a periodic review of an employee’s job performance and by extension, their contribution to the organization. Where traditional annual reviews focus on the past and not on the future, performance appraisals are systematically and consistently conducted over the course of the year.
  • The performance appraisal method chosen will depend on the role of the employee who is being appraised, the desired level of formality, and the extent to which work output or behavior is observable in isolation. 
  • Three performance appraisal methods include management by objectives (MBO), 360-degree feedback, and the behaviorally anchored rating scale (BARS). Most will include a section on professional development, key organizational objectives, and general performance factors.

Recap of Performance Appraisal Methods:

  1. Management by Objectives (MBO):
    • Set objectives agreed upon by management and employees.
    • Review progress quarterly, half-yearly, or annually.
    • Rewards based on goal achievement.
    • Suited for evaluating senior staff.
  2. 360-Degree Feedback:
    • Comprehensive feedback from multiple sources.
    • Includes managers, colleagues, customers, and self-appraisal.
    • Assesses team dynamics, initiative, and values.
  3. Behaviorally Anchored Rating Scale (BARS):
    • Rates employees based on specific behavioral patterns.
    • Uses a numerical scale to benchmark performance.
    • Suited for evaluating behavior-focused roles.

Connected Business Frameworks and Concepts

Agile Leadership

Agile leadership is the embodiment of agile manifesto principles by a manager or management team. Agile leadership impacts two important levels of a business. The structural level defines the roles, responsibilities, and key performance indicators. The behavioral level describes the actions leaders exhibit to others based on agile principles. 

Adaptive Leadership

Adaptive leadership is a model used by leaders to help individuals adapt to complex or rapidly changing environments. Adaptive leadership is defined by three core components (precious or expendable, experimentation and smart risks, disciplined assessment). Growth occurs when an organization discards ineffective ways of operating. Then, active leaders implement new initiatives and monitor their impact.

Delegative Leadership

Developed by business consultants Kenneth Blanchard and Paul Hersey in the 1960s, delegative leadership is a leadership style where authority figures empower subordinates to exercise autonomy. For this reason, it is also called laissez-faire leadership. In some cases, this type of leadership can lead to increases in work quality and decision-making. In a few other cases, this type of leadership needs to be balanced out to prevent a lack of direction and cohesiveness of the team.

Distributed Leadership

Distributed leadership is based on the premise that leadership responsibilities and accountability are shared by those with the relevant skills or expertise so that the shared responsibility and accountability of multiple individuals within a workplace, bulds up as a fluid and emergent property (not controlled or held by one individual). Distributed leadership is based on eight hallmarks, or principles: shared responsibility, shared power, synergy, leadership capacity, organizational learning, equitable and ethical climate, democratic and investigative culture, and macro-community engagement.


Micromanagement is about tightly controlling or observing employees’ work. Although in some cases, this management style might be understood, especially for small-scale projects, generally speaking, micromanagement has a negative connotation mainly because it shows a lack of trust and freedom in the workplace, which leads to adverse outcomes.

Maslow’s Hierarchy of Needs

Maslow’s Hierarchy of Needs was developed by American psychologist Abraham Maslow. His hierarchy, often depicted in the shape of a pyramid, helped explain his research on basic human needs and desires. In marketing, the hierarchy (and its basis in psychology) can be used to market to specific groups of people based on their similarly specific needs, desires, and resultant actions.

Eisenhower Matrix

The Eisenhower Matrix is a tool that helps businesses prioritize tasks based on their urgency and importance, named after Dwight D. Eisenhower, President of the United States from 1953 to 1961, the matrix helps businesses and individuals differentiate between the urgent and important to prevent urgent things (seemingly useful in the short-term) cannibalize important things (critical for long-term success).

Moonshot Thinking

Moonshot thinking is an approach to innovation, and it can be applied to business or any other discipline where you target at least 10X goals. That shifts the mindset, and it empowers a team of people to look for unconventional solutions, thus starting from first principles, by leveraging on fast-paced experimentation.

Lightning Decision Jam

The theory was developed by psychologist Edwin Locke who also has a background in motivation and leadership research. Locke’s goal-setting theory of motivation provides a framework for setting effective and motivating goals. Locke was able to demonstrate that goal setting was linked to performance.

Herzberg’s Two-Factor Theory

Herzberg’s two-factor theory argues that certain workplace factors cause job satisfaction while others cause job dissatisfaction. The theory was developed by American psychologist and business management analyst Frederick Herzberg. Until his death in 2000, Herzberg was widely regarded as a pioneering thinker in motivational theory.

Lessons Learned

The term lessons learned refers to the various experiences project team members have while participating in a project. Lessons are shared in a review session which usually occurs once the project has been completed, with any improvements or best practices incorporated into subsequent projects. 

Growth Engineering

Growth engineering is a systematic, technical approach to the improvement of conversion and the user experience. Combined with business engineering it helps business people build valuable companies from scratch.

Retrospective Analysis

Retrospective analyses are held after a project to determine what worked well and what did not. They are also conducted at the end of an iteration in Agile project management. Agile practitioners call these meetings retrospectives or retros. They are an effective way to check the pulse of a project team, reflect on the work performed to date, and reach a consensus on how to tackle the next sprint cycle.


Andy Grove, helped Intel become among the most valuable companies by 1997. In his years at Intel, he conceived a management and goal-setting system, called OKR, standing for “objectives and key results.” Venture capitalist and early investor in Google, John Doerr, systematized in the book “Measure What Matters.”

Cog’s Ladder

Cog’s ladder is a model of group development. The ladder was created in 1972 by Procter & Gamble employee George Charrier to help management at the company understand how teams worked to make them more efficient. Cog’s ladder is a model of group formation and behavior that is used to help businesses understand how a team can work to achieve its goals.

GRPI Model

The GRPI model was created by American organizational theorist Richard Beckhard in 1972. Although the model is almost 50 years old, its simplicity and effectiveness mean it is still in use today. The GRPI model is a tool used by leaders to diagnose the cause of team dysfunction and increase productivity, quality, and efficiency through four key dimensions that cause conflict: goals, roles, processes, and interactions. 

High-Performance Coaching

High-performance coaches work with individuals in personal and professional contexts to enable them to reach their full potential. While these sorts of coaches are commonly associated with sports, it should be noted that the act of coaching is a specific type of behavior that is also useful in business and leadership. 

OSKAR Coaching

The OSKAR coaching model was developed in the early 2000s by organizational theorists and authors Paul Z. Jackson and Mark McKergow.  The OSKAR coaching model is a solution-driven method used for managerial coaching in the workplace. In their book titled The Solutions Focus: Making Coaching and Change Simple, the pair layout a framework to help coaches implement training sessions that are focused on solutions and not on problems.

Training of Trainers

The training of trainers model seeks to engage master instructors in coaching new, less experienced instructors with a particular topic or skill. The training of trainers (ToT) model is a framework used by master instructors to train new instructors, enabling them to subsequently train other people in their organization.

GROW Model

Though no single individual can claim to have created the GROW model, writers Graham Alexander and Alan Fine together with racing car champion John Whitmore played a significant part in developing the framework during the 80s and 90s. The GROW model is a simple way to set goals and solve problems during coaching sessions through four stages: goal, reality, options, and will (way forward).

Ulrich Model

The Ulrich model helps large or complex organizations with many business units organize their human resource function. The Ulrich model was named for management coach David Ulrich after the release of his 1996 book Human Resource Champions: The Next Agenda for Adding Value and Delivering Results.

Read Next: SWOT AnalysisPersonal SWOT AnalysisTOWS MatrixPESTEL AnalysisPorter’s Five ForcesTOWS MatrixSOAR Analysis.

Read Next: BiasesBounded RationalityMandela EffectDunning-Kruger EffectLindy EffectCrowding Out EffectBandwagon Effect.

Organizational Structure Case Studies

Airbnb Organizational Structure

Airbnb follows a holacracy model, or a sort of flat organizational structure, where teams are organized for projects, to move quickly and iterate fast, thus keeping a lean and flexible approach. Airbnb also moved to a hybrid model where employees can work from anywhere and meet on a quarterly basis to plan ahead, and connect to each other.

eBay Organizational Structure

eBay was until recently a multi-divisional (M-form) organization with semi-autonomous units grouped according to the services they provided. Today, eBay has a single division called Marketplace, which includes eBay and its international iterations.

IBM Organizational Structure

IBM has an organizational structure characterized by product-based divisions, enabling its strategy to develop innovative and competitive products in multiple markets. IBM is also characterized by function-based segments that support product development and innovation for each product-based division, which include Global Markets, Integrated Supply Chain, Research, Development, and Intellectual Property.

Sony Organizational Structure

Sony has a matrix organizational structure primarily based on function-based groups and product/business divisions. The structure also incorporates geographical divisions. In 2021, Sony announced the overhauling of its organizational structure, changing its name from Sony Corporation to Sony Group Corporation to better identify itself as the headquarters of the Sony group of companies skewing the company toward product divisions.

Facebook Organizational Structure

Facebook is characterized by a multi-faceted matrix organizational structure. The company utilizes a flat organizational structure in combination with corporate function-based teams and product-based or geographic divisions. The flat organization structure is organized around the leadership of Mark Zuckerberg, and the key executives around him. On the other hand, the function-based teams based on the main corporate functions (like HR, product management, investor relations, and so on).

Google Organizational Structure

Google (Alphabet) has a cross-functional (team-based) organizational structure known as a matrix structure with some degree of flatness. Over the years, as the company scaled and it became a tech giant, its organizational structure is morphing more into a centralized organization.

Tesla Organizational Structure

Tesla is characterized by a functional organizational structure with aspects of a hierarchical structure. Tesla does employ functional centers that cover all business activities, including finance, sales, marketing, technology, engineering, design, and the offices of the CEO and chairperson. Tesla’s headquarters in Austin, Texas, decide the strategic direction of the company, with international operations given little autonomy.

McDonald’s Organizational Structure

McDonald’s has a divisional organizational structure where each division – based on geographical location – is assigned operational responsibilities and strategic objectives. The main geographical divisions are the US, internationally operated markets, and international developmental licensed markets. And on the other hand, the hierarchical leadership structure is organized around regional and functional divisions.

Walmart Organizational Structure

Walmart has a hybrid hierarchical-functional organizational structure, otherwise referred to as a matrix structure that combines multiple approaches. On the one hand, Walmart follows a hierarchical structure, where the current CEO Doug McMillon is the only employee without a direct superior, and directives are sent from top-level management. On the other hand, the function-based structure of Walmart is used to categorize employees according to their particular skills and experience.

Microsoft Organizational Structure

Microsoft has a product-type divisional organizational structure based on functions and engineering groups. As the company scaled over time it also became more hierarchical, however still keeping its hybrid approach between functions, engineering groups, and management.

Read Next: Organizational Structure

Read Also: Business Model

Read Next: MBO, 360 Degree Feedback, High-Performance Management, OKR, Balanced Scorecard.

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