Supervisors include superiors of the employee, other superiors having knowledge about the work of the employee and departmental heads or managers. The general practice is that immediate superiors appraise the performance, which in turn is reviewed by the departmental head / manager. This is because supervisors are responsible for managing their subordinates and they have the opportunity to observe, direct and control the subordinates continuously. Moreover they are accountable for the successful performance of their subordinates. Sometimes, other supervisors who have close contact with an employee’s work also appraise with a view to provide additional information.
On the negative side, immediate supervisors may emphasize certain aspects of employee performance to the neglect of others. Also, managers have been known to manipulate evaluations to justify their decisions on pay increase and promotions. However, the immediate supervisor will continue to evaluate employee performance till a better alternative is available. Organizations no doubt, will seek alternatives because of the weaknesses mentioned above and a desire to broaden the perspective of the appraisals.
Peer appraisals may be reliable if the work group is stable over a reasonably long period of time and performs tasks that require interactions. However, little research has been conducted to determine how peers establish standards for evaluating others or the overall effect of peer appraisal on the group’s attitude. Whatever research was done on this topic was mostly done on military personnel at the management or pre-management level (officers or officer candidates) rather than on employees in business organizations. More often than not in business organizations if employees were to be evaluated by their peers, the whole exercise could degenerate into a popularity contest, paving the way for the impairment of work relationships.
The concept of having superiors rated by subordinates is being used in most organizations today, especially in developed countries. For instance, in most US universities students evaluate a professor’s performance in the classroom. Such a novel method can be useful in other organizational settings, provided the relationships between superiors and subordinates are cordial. Subordinates ratings in such cases can be quite useful in identifying competent superiors. The rating of leaders by combat soldiers is an example. However the fear of reprisal often compels a subordinates to be dishonest in his rating . Though useful in universities and research institutions, this approach may not gain acceptance in traditional organizations where subordinates practically do not enjoy much discretion.
If individuals understand the objectives they are expected to achieve and the standards by which they are to be evaluated they are to a great extent, in the best position to appraise their own performance. Also, since employees development means self-development employees who appraise their own performance may become highly motivated.
Users of services:
Employees performance in service Organizations relating to behaviours promptness, speed in doing the job and accuracy can be better judged by the customers or users of services. For example, a teacher’s performance is better judged by students and the performance of a conductor of a bus is better judged by passengers.

Sometimes consultants may be engaged for appraisals when employees or employers do not trust the supervisory appraisal and management does not trust the self-appraisals or peer appraisals or subordinate appraisal. In the situation, consultants are trained and they observe the employee at work for sufficiently long periods for the purpose of appraisal.
In view of the limitations associated with each and every method discussed above. Several organizations follow a multiple rating system wherein several superiors separately fill out rating forms on the same subordinate. The results are then tabulated.
Source: HRM