This document provides an overview of performance appraisal methods used to evaluate employees. It discusses several common methods including 360 degree feedback, rating scales, critical incidents, essay method, work standards, ranking, forced distribution, result-based systems, and behaviorally anchored rating scales. Each method is defined in one to two sentences. The document aims to inform the reader about different performance appraisal techniques used by organizations.

1. COMPILED BY:
PRAGATI JAIN
SHRIRAM COLLEGE OF COMMERCE

2. INTRODUCTION
Managing human resources in today’s dynamic environment is becoming
more and more complex as well as important. Recognition of people as a
valuable resource in the organization has led to increasing trends in employee
maintenance, job security, etc
My research project deals with “Performance Appraisal as carried out at
reliance”.

3. RATIONALE
Performance Appraisal is the important aspect in the organization to evaluate the
employees’ performance. It helps in understanding the work culture,
involvement, and satisfaction. It helps the organization in deciding employees
promotion, transfer, incentives, pay increase.

4. INTRODUCTION TO
HRM
The process of hiring and developing employees so that they become more
valuable to the organisation.
It includes conducting job
analysis, planning personnel needs, recruiting the right people for the job,
orienting and training, managing wages
and salaries, providing benefits and incentives, evaluating performance,
resolving disputes, and communicating with all employees at all
levels. Examples of core qualities of HR management are
extensive knowledge of the industry, leadership,
and effective negotiation skills. Formerly called personnel management.

5. “People are our most valuable asset” is a cliché, which no member of any
senior management team would disagree with. Yet, the reality for many
organizations are that their people remain under valued, under trained and
under utilized.
The market place for talented, skilled people is competitive and expensive.
Taking on new staff can be disruptive to existing employees. Also, it takes
time to develop ‘cultural awareness’, product / process / organization
knowledge and experience for new staff members.

7. Performance Appraisal is defined as the process of assessing
the performance and progress of an employee or a group of
employees on a given job and his / their potential for future
development. Performance appraisals are a part of career
development and consist of regular reviews of employee
performance within organizations.

10. 360 DEGREE FEEDBACK EVALUATION
A common approach to assessing performance is to use a numerical or scalar
rating system whereby managers are asked to score an individual against a
number of objectives/attributes. Employees are also allowed the opportunity
to assess the person(manager) at the same time. This is known as 360◦
appraisal. The biggest risk with 360 degree feedback is confidentiality. The
information is very sensitive and in the wrong hands, could impact careers.
FACT: Used by 90 percent fortune 500 companies.
Also used by hp and IBM.

11. RATING SCALES
A widely used appraisal method that rates employees according to defined
factors. The scale includes several categories, normally five to seven in number,
defined by adjectives such as outstanding, meets expectations or needs
improvement. One reason for the popularity of the ratings scale method is its
simplicity, which permit quick evaluation of many employees. The factors
chosen for evaluation are typically of two types job related and personal
characteristics. The rater(evaluator) completes the form by indicating the
degree of each factor that is most descriptive of the employee and his or her
performance. Evaluators total and then average the points in each part . Then
they multiply this average by a factor representing the weight given each
section. The final score for the employees is the total of each section’s points.

12. CRITICAL INCIDENTS
A performance appraisal technique that requires a written record of highly
favourable and highly unfavourable work behaviour. When such an action – a
critical incident affects the department significantly, either positively or
negatively, the manager writes it down. With this method, the appraisal is more
likely to cover the entire evaluation period and not focus on the last few weeks
or months.

13. ESSAY METHOD
A performance appraisal method in which the rater writes a brief narrative
describing an employee’s performance. Ratings of this type depend heavily on the
evaluators ability. Supervisors with excellent writing skills, if so inclined, can make
a marginal worker sound like a top performer. However, some managers believe
that the essay method is not only the most simple but also an acceptable
approach to employee evaluation.

14. WORK STANDARDS
A performance appraisal method that compares each employee’s performance
to a predetermined standard or expected level of output. Several methods are
available to determine work standards, including time study and work sampling.
An obvious advantage of using standards as appraisal criteria is objective, they
should understand clearly how the standards were set. Management must also
explain the rationale for any changes to the standards.

15. RANKING
A performance appraisal method in which the rater simply places employees
from a group in rank order of overall performance. A difficulty occurs when
individuals have performed at a comparable rate(as perceived by the
evaluator). Paired comparison is a variation of the ranking method in which
performance of each employee is compared with every other employee in the
group. Overall performance, is often the basis for the comparison. The
employee who receives the greatest number of favourable comparisons
receives the highest ranking.

16. FORCED DISTRIBUTION
A performance appraisal method which requires the rater to assign individuals a
group to a limited number of categories similar to a normal frequency distribution.
Because of slowing economy and an increased focus on pay for performance,
many firms have insulted some rankings or gotten tougher with their existing
systems. Proponents of forced distribution believe they facilitate budgeting and
guard against weak managers who are too timid to get rid of the poor performers.
They think that forced rankings require managers to be honest with workers about
how they are doing.

17. RESULT BASED SYSTEM
A performance appraisal method in which the manager and the subordinate
jointly agree on objectives of the next appraisal period. Since organisations exist
to achieve goals, a result-based system has obvious value. A distinct advantage of
this approach is that it provides a measure of achievements against
predetermined objectives.

18. BEHAVIOURALLY ANCHORED RATING
SCALES
A performance appraisal method that combines elements of the traditional
rating scale and critical incident method. BARS differs from rating scales
because, instead of using adjective at each scale point, it uses behavioural
anchors related to the criterion being measured. The approach facilitates
discussions of the rating because it addresses specific behaviours; thus
overcoming weakness in other evaluation methods.