Modern Methods of Performance Management

Modern methods are the most widely used performance measurement techniques. The following are some of the important modern methods of performance management.


Human resource accounting

This method aims to assess the effectiveness of Human Resource Management (HRM) activities and tries to value manpower as assets and not as expenses. In terms of productivity, this method measures the cost incurred on employees in the form of recruitment, training, development, compensation, and contributions.


Assessment centre

This method of performance measurement was first applied in the German Army during 1930s. This method is mostly used by various business and industrial houses.

In the assessment centre approach, employees are required to undergo a series of tests and exercises, which are similar to the situations that they might encounter while doing the project work. Each centre consists of 6-12 participants from various departments. These participants spend two or three working days together, away from their job.


Behaviourally Anchored Rating Scales (BARS)

This method of performance measurement has dimensions such as, job knowledge, and interpersonal skills. The BARS are usually in the form of a seven or nine point vertical scale. Point one on the scale represents unfavorable job performance and the highest point represents favorable job performance.


Management by Objectives (MBO)

This method follows a unique approach that requires employees to establish objective for themselves. This concept was first initiated by Peter Drucker in 1954. It is a participative process and involves setting of own objectives by subordinates in consultation with their superiors. Several organisations, such as Ernst and Young and Price Water House Coopers use MBO approach for performance measurement.


360-Degree appraisal

This method gained popularity during 1990s. In this process, an employee is appraised on the basis of feedback from various parties such as customers, clients, superiors, subordinates, team members, suppliers and self.

The provision of self-appraisal gives the employee a chance to self-assess strengths, weaknesses and achievements. Superiors’ appraisal helps subordinates in learning leadership, communication and empathetic skills from the superior.


Balanced ScoreCard (BSC)

Today, organizations deal in complex competitive environment where an accurate understanding of their goals and methods for attaining those goals are very much required. BSC works as tool for managers to navigate to future competitive success.

The concept of BSC was given by Robert S. Kaplan and David P. Norton, authors of The Balanced Scorecard: Translating Strategy into Action (1996) as a performance measurement framework.

BSC added strategic non-financial performance measures to traditional financial metrics, which gave managers a more ‘balanced’ view of organizational performance.

Sarav Author

Leave a Reply

Your email address will not be published. Required fields are marked *