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Appraisal Methods and Techniques for ACCA BT

Updated 11 October 2026 · Fact-checked

Appraisal methods are the ways an organisation assesses an employee's performance. Common ones are self-appraisal, 360-degree feedback, management by objectives (MBO), rating scales and critical incident records. To answer exam questions, identify who gives the assessment, what is measured, and the main strength and weakness of the method.

Understand Appraisal Methods and Techniques

Performance appraisal is a formal review of how well an employee is doing. The method you choose decides who gives the view, what is measured and how reliable the result is. In BT you must recognise each method from a short description and state its pros and cons.

Self-appraisal means the employee assesses their own performance, often by completing a form before the appraisal interview. It makes people reflect and take ownership. The risk is bias: some people rate themselves too highly, others too modestly.

360-degree feedback collects views from many people around the employee: manager, peers, subordinates, and sometimes customers or suppliers. It gives a broad picture and can reveal issues a manager does not see. It is time-consuming, and feedback may be biased or hurt relationships if it is not anonymous and handled well.

Management by objectives (MBO) means the manager and employee agree goals for a period, then review results against them. It links individual work to organisational goals and motivates through participation. Its weakness is that it focuses on results that are easy to measure and may ignore behaviour, teamwork and quality. Targets may also be set too easy or become out of date.

Rating scales score the employee on listed traits or skills, for example 1 to 5 for punctuality or communication. They are quick and allow comparison. They are subjective and prone to errors such as the halo effect, central tendency and leniency.

Critical incident method means the manager records specific examples of good and poor behaviour during the period. It is based on facts, not impressions. It needs regular note-taking and may focus on extreme events rather than everyday performance.

Key formulas to remember

Self-appraisal
Source = the employee themselves
Strength: reflection and ownership. Weakness: bias in self-rating.
360-degree feedback
Sources = manager + peers + subordinates (+ customers/suppliers)
Strength: broad view. Weakness: time-consuming and open to bias or conflict.
Management by objectives (MBO)
Agree objectives → monitor → review results against objectives
Strength: links to organisational goals and motivates. Weakness: ignores hard-to-measure behaviour.
Rating scale
Score each listed trait on a scale (e.g. 1 to 5)
Quick and comparable, but subjective. Watch for halo effect and central tendency.
Critical incident method
Record specific examples of effective and ineffective behaviour
Factual and specific, but needs ongoing records and may overstate extreme events.

How to solve Appraisal Methods and Techniques questions

Use this method for any question asking you to identify, compare or evaluate an appraisal method.

  1. 1Read the scenario and find who is giving the assessment: the employee, the manager, or a wider group.
  2. 2Find what is being assessed: agreed results, personal traits, or specific behaviour.
  3. 3Match to the method: own view = self-appraisal; many sources = 360-degree; agreed goals = MBO; scored traits = rating scale; recorded events = critical incident.
  4. 4Check for clue words such as 'peers and subordinates', 'agreed targets', 'score out of five' or 'noted examples'.
  5. 5If asked for advantages or disadvantages, give one clear point for each, linked to the scenario.
  6. 6Eliminate options that describe a different method before choosing your answer.

Quickest way: Source and measure shortcut

When to use it: Use for multiple choice questions that describe a method and ask you to name it or state its main weakness.

  1. Ask: who assesses? Self, manager or many people.
  2. Ask: what is assessed? Goals, traits or incidents.
  3. Pick the method that matches both answers.
  4. For weaknesses, recall one keyword: bias (self), time (360), narrow focus (MBO), subjectivity (rating), record keeping (critical incident).

Common mistakes in Appraisal Methods and Techniques

  • Confusing self-appraisal with 360-degree feedback

    Both involve more views than the manager's alone.

    Fix: Self-appraisal is only the employee's own view. 360-degree uses several other people as well.

  • Saying MBO measures behaviour and attitude

    Students link it to motivation and assume it covers everything.

    Fix: MBO measures results against agreed goals. Its weakness is that behaviour and teamwork may be ignored.

  • Treating rating scales as objective

    Numbers look precise.

    Fix: The scores come from a manager's judgement, so they are subjective and can suffer from halo effect and central tendency.

  • Thinking 360-degree feedback is always anonymous and accurate

    Textbook descriptions focus on benefits.

    Fix: Anonymity is a design choice. Raters can be biased or unfair, so results must be handled carefully.

  • Mixing up critical incident with rating scale

    Both record performance information.

    Fix: Critical incident records specific events in words. A rating scale gives scores against set traits.

Worked examples

Example 1

A manager keeps a log during the year noting specific occasions when a team member handled a customer complaint well and when a deadline was missed. At the appraisal she uses these notes as evidence. Which appraisal method is this?

Show the solution
  1. Who assesses? The manager.
  2. What is assessed? Specific events of good and poor behaviour.
  3. Notes are recorded throughout the year as examples.
  4. This matches the critical incident method, not a rating scale, because no scores are used and not MBO, because no goals were agreed.

Answer: Critical incident method.

Example 2

A company asks each manager's colleagues, team members and key customers to comment on the manager's performance, in addition to the manager's own line manager. Identify the method and give one advantage and one disadvantage.

Show the solution
  1. Several sources give views: peers, subordinates, customers and the line manager.
  2. This is 360-degree feedback.
  3. Advantage: it gives a broad, balanced picture and can reveal problems the line manager does not see.
  4. Disadvantage: it takes time to collect and analyse, and the feedback may be biased or damage relationships if handled badly.

Answer: 360-degree feedback. Advantage: broad view of performance. Disadvantage: time-consuming and open to bias.

Exam tips

  • Match the method from the description first. Most objective test questions are won or lost on this step.
  • Learn one strength and one weakness for each of the five methods.
  • In multiple response questions, read the number of answers required and tick exactly that many.
  • Watch for scenario words: 'agreed targets' signals MBO and 'scored' signals a rating scale.
  • In longer multi-task questions, link your point to the scenario rather than just naming the method.

Practice questions from Review and appraisal of individual performance

Appraisal Methods and Techniques in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Appraisal Methods and Techniques: frequently asked questions

What is the difference between self-appraisal and 360-degree feedback?

Self-appraisal is the employee's own assessment of their performance. 360-degree feedback gathers views from several people, such as managers, peers, subordinates and customers. Self-appraisal can be one input into a 360-degree process.

What are the advantages and disadvantages of management by objectives?

MBO links individual goals to organisational goals and motivates through agreement and participation. Its disadvantages are that it focuses on measurable results, can ignore behaviour and teamwork, and goals may become outdated or too easy.

What is the halo effect in appraisal?

The halo effect occurs when a manager lets one strong trait influence the rating of all other traits. It makes rating scale results unreliable. Using clear criteria and evidence helps reduce it.

Which appraisal methods are examined in ACCA BT?

BT questions commonly describe methods such as self-appraisal, 360-degree feedback, MBO, rating scales and critical incidents. You are usually asked to identify the method or state its strengths and weaknesses.