Single vs Multi-Source Performance Appraisals

Everyone has had one of those performance appraisals that neither the manager nor the employee wanted to have. The company thinks that performance appraisals are a good idea for many reasons but doesn’t disseminate them to the rest of the organization. The company  doesn’t train the managers on how to conduct appraisals either. Wouldn’t it be nice if appraisals were something employees and managers didn’t dread? There are several types of performance appraisals out there. Each has its strengths and weaknesses.

The question is: Which type of performance appraisal should your organization use?

There are two distinct approaches to performance appraisals: single source and multi-source. Both approaches have strengths and weaknesses. Single source appraisal systems are less time consuming than multi-source. The appraisal only has to have the input of one person i.e., the manager.

The single source approach can be especially useful with a manager who has a lot of observation time with his/her subordinates and in more bureaucratic organizations. It also has the benefit of the manager knowing the job. The manager already supervises the subordinate and therefore should have information on the subordinate’s performance. The manager also generally helps to determine goals with the subordinate. It has a natural flow from top to bottom of the hierarchy. It is accepted that supervisors rate subordinates. All of these benefits of single source make it a popular approach to performance appraisal.

The downside of single source deals with the lack of variety in input. Because the manager is the only input for the appraisal, it can lead to skewed and incorrect information. The manager may not know every aspect of the job and may attribute more power to inconsequential tasks than larger more important tasks. This misattribution can lead to skewed ratings and other types of bias. Sometimes the manager is not even in the same location. This lack of contact and observation can make it difficult for the manager to accurately rate the subordinate’s performance.

Multi-source appraisal systems were originally developed due to the constant dissatisfaction with performance appraisals. They have many benefits but are not the best option for all organizations. Multi-source appraisals help counteract the problem single source appraisals have with limited single perception input. More input creates a more well rounded picture for the employee.

Managers may not always have a clear understanding of all aspects of a job. With multiple sources of information, a better understanding of the job is created. Peers and customers of the employee will be more likely to rate the employee accurately when the appraisal strives for anonymity. Since these appraisals will not directly affect the employee’s pay, peers can be more accurate with no fear of consequence.

The downside of multi-source appraisals is the utility in all organizations. In very bureaucratic organizations employees and managers would not be comfortable with using multi-source appraisals. This appraisal does not  follow the natural flow of highly bureaucratic organizations. Some employees may not feel comfortable with evaluating their peers and supervisors.

The important take away is that the type of performance appraisal chosen depends on the organization in question. Each type is better suited to a different organization. The best choice for your organization may not be the same for another organization. In essence, choose the appraisal that suits your organization and don’t choose one just because it is quoted to be “the best.”