Performance Appraisals Versus Multi-Rater Surveys
Since pre-historic times, humans have participated in performance appraisals. Whether it was throwing a spear at a saber-toothed tiger to attain the status of chief of the tribe or becoming dinner for the tiger because of poor aim, humans have experienced the effects of both positive and negative performance. According to Dulewicz (1989), there is “a basic human tendency to make judgments about those [with whom] one is working, as well as about oneself.” While the consequences of performance appraisals are rarely life or death in the workplace, they can be severe. Unfortunately, the same is true for multi-rater surveys. So, which should your organizations use?
Organizations today are rethinking how they measure performance, develop talent, and support growth. Two commonly used tools – traditional performance appraisals and multi-rater surveys – often get compared and sometimes get confused. While both play an important role, they serve very different purposes. Understanding when and how to use each can make the difference between feedback that feels like a formality and feedback that drives development.
What Are Performance Appraisals?
Performance appraisals are formal evaluations, typically conducted annually or semi-annually, where a manager assesses an employee’s performance against predefined goals, competencies, or job expectations.
Key characteristics:
- Manager-led and hierarchical
- Focused on results, objectives, and role responsibilities
- Often tied to compensation, promotions, or bonuses
- Summative and evaluative in nature
Strengths:
- Clear accountability for performance outcomes
- Aligns individual goals with organizational strategy
- Provides documentation for compensation and talent decisions
Limitations:
- It relies on a single perspective
- Can be influenced by recency bias or subjective judgment
- Often backward-looking rather than growth-focused
- May feel stressful or transactional to employees
- When there is a problem, managers use the appraisal to bring it up – often for the first time
Performance appraisals answer the question: “How well did this person perform in their role?”
What Are Multi-Rater Surveys?
Multi-rater surveys gather feedback from multiple sources – such as the employee’s peers, direct reports, manager, and/or sometimes customers – to provide a well-rounded view of the employee’s behaviors and skills. If the results are widely valued and systematically analyzed within the organization, training and development programs can be formulated around the desired outcomes, leading to positive, measurable organizational change.
Key characteristics:
- Feedback comes from several stakeholders
- Focused on behaviors, leadership, and interpersonal effectiveness
- Typically used for development rather than evaluation
- Anonymous to encourage honesty
Strengths:
- Offers a more balanced and objective perspective
- Highlights blind spots and hidden strengths
- Encourages self-awareness and personal growth
- Strengthens leadership development efforts
Limitations:
- Not ideal for compensation, promotion, or performance ratings
- Requires trust and psychological safety
- Feedback must be interpreted and coached/mentored effectively
- Can be overwhelming without proper support
Multi-rater surveys answer the question: “How is this person experienced by others?”
Why the Best Organizations Use Both
Rather than choosing one over the other, high-performing organizations use performance appraisals and multi-rater surveys together. Performance appraisals provide clarity on what was achieved whereas multi-rater surveys reveal how results were achieved. Together, they balance accountability with development. For example:
- A leader may meet all performance targets but struggle with collaboration – a multi-rater survey will highlight this gap.
- An employee may be undervalued in appraisals but highly respected by peers – a multi-rater survey will bring that strength to light.
When aligned thoughtfully, these tools create a feedback ecosystem that supports both business results and human growth. Further, organizations should complement both methods with frequent, real-time discussions to avoid the pitfalls of annual-only reviews. By balancing these methods, organizations can leverage the developmental power of multi-rater surveys without sacrificing the accountability of traditional performance reviews.
How We Can Help
Our CheckPoint multi-rater survey highlights an individual’s performance across eight management competencies (Communication, Leadership, Adaptability, Task Management, Relationships, Production, Development of Others, and Personal Development) while our Emotional Intelligence multi-rater surveys highlight an individual’s performance across six skills (Self-awareness, Awareness of Others, Authenticity, Emotional Reasoning, Self-management, and Influence).
In addition to our two multi-rater surveys, we have a suite of assessments which include our PXT Select assessment, our Everything DiSC assessments, our Customer Service assessment, and our Integrity assessment. We also provide culture consulting and a host of other training programs to support employee development. Check us out at www.GreatLakesProfiles.com. We’re here to help, reach out to us via email at Jim@GreatLakesProfiles.com or call me at (248) 388-0697.