2. INTRODUCTION
Performance appraisal is a systematic process that evaluates an individual
employee’s performance in terms of his productivity with respect to the pre-
determined set of objectives.
It is an annual activity which gives the employee an opportunity to reflect on
duties that were dispatched by him, since it involves receiving feedback regarding
their performance.
It also evaluates the individual’s attitude, personality, behaviour and stability in
his job profile. There are various applications of appraisals like compensation,
performance improvement, promotion, termination, test validation, and much more.
2
Sultan Ul-Uloom College Of Pharmacy, Banjara Hills, Hyd.
3. Various performance appraisal methods are followed by organisation to ensure
fair appraisals to their employees.
The criteria for performance appraisal methods are based on various aspects
like productivity, quality of work, duration of service and training. Productivity
is measured mostly in the case of manufacturing i.e. The number of units
manufactured or delivered by the employee.
3
Sultan Ul-Uloom College Of Pharmacy, Banjara Hills, Hyd.
4. OBJECTIVES OF PERFORMANCE APPRAISALS
• Use of performance appraisals
Promotions.
Confirmations.
Training and development.
Compensation reviews.
Competency building.
Improve communication.
Evaluation of HR programs.
Feedback.
4
Sultan Ul-Uloom College Of Pharmacy, Banjara Hills, Hyd.
5. TECHNIQUES/METHODS OF PERFORMANCE APPRAISALS
Broadly all methods of appraisal can be divided into two different categories.
Past Oriented Methods.
Future Oriented Methods.
PAST ORIENTED METHODS:
1. RATING SCALES: Rating scales consists of several numerical scales
representing job related performance criterions such as dependability, initiative,
output, attendance, attitude etc. Each scales ranges from excellent to poor. The
total numerical scores are computed and final conclusions are derived.
2. CHECKLIST : Under this method, checklist of statements of traits of employee
in the form of yes or no based questions is prepared. Here the rater only does the
reporting or checking and HR department does the actual evaluation.
5
Sultan Ul-Uloom College Of Pharmacy, Banjara Hills, Hyd.
6. 3. FORCED CHOICE METHOD: The series of statements arranged in the
blocks of two or more are given and the rater indicates which statement is true or
false. The rater is forced to make a choice. HR department does actual assessment.
4. FORCED DISTRIBUTION METHOD: Here employees are clustered around
a high point on a rating scale. Rater is compelled to distribute the employees on all
points on the scale. It is assumed that the performance is conformed to normal
distribution.
5. CRITICAL INCIDENTS METHOD: The approach is focused on certain
critical behaviours of employee that makes all the difference in the performance .
6. BEHAVIOURALLY ANCHORED RATING SCALES: Statements of
effective and ineffective behaviours determine the points. They are set to be
behaviourally anchored. The rater is supposed to say, which behaviour describes the
employee performance.
6
Sultan Ul-Uloom College Of Pharmacy, Banjara Hills, Hyd.
7. 7. FIELD REVIEW METHOD: This is an appraisal done by someone outside
employees own department usually from corporate or HR department.
8. PERFORMANCE TESTS & OBSERVATIONS: This is based on the test of
knowledge or skills. The tests must be reliable and validated to be useful.
9. CONFIDENTIAL RECORDS: Mostly used by government departments,
however its application in industry is not ruled out.
Here the report is given in the form of Annual Confidentiality Report (ACR)
and may record ratings with respect to following items; attendance, self
expression, team work, leadership, initiative, technical ability, originality and
resourcefulness etc.
10. ESSAY METHOD: In this method the rater writes down the employee
description in detail within a number of broad categories like, overall impression
of performance jobs, strengths and weaknesses and training need of the employee.
7
Sultan Ul-Uloom College Of Pharmacy, Banjara Hills, Hyd.
8. 11. COST ACCOUNTING METHOD: Here performance is evaluated from the
monetary returns yields to his or her organisation derives is ascertained. Hence it
is more dependent upon cost and benefit analysis.
12. COMPARATIVE EVALUATION METHOD:
RANKING METHODS: Superior ranks his worker based on merit, from best
to worst. However how best and why best are not elaborated in this method. It is
easy to administer and explanation.
PAIRED COMPARISON METHODS: In this method each employee is rated
with another employee in the form of pairs. The number of comparisons may be
calculated.
8
Sultan Ul-Uloom College Of Pharmacy, Banjara Hills, Hyd.
9. FUTURE ORIENTED METHODS
1. MANAGEMENT BY OBJECTIVES: It means management by objectives and
the performance is rated against the achievement of objectives stated by the
management.
2. PSYCHOLOGICAL APPRAISALS: These appraisals are more directed to
assess employees potential for future performance rather than the past one.
3. 360-DEGREE FEEDBACK: It is a technique which is systematic collection of
performance data on an individual group, team members, customers, peers and
self. In fact anyone who has useful information on how an employee does a job
may be one of the appraisers.
9
Sultan Ul-Uloom College Of Pharmacy, Banjara Hills, Hyd.
10. COMMON PROBLEMS ASSOCIATED WITH CONDUCTING
THE APPRAISAL
1. Halo/horn effect – Employee’s extreme competence in one area “shines”
over all others. Conversely, employee does poorly in one area and this
overshadows all areas.
2. Biasness – Own prejudices {race, national origin, gender, appearance, etc.}
influence the appraisal.
3. Comparison Rating – Contrasting one employee with another.
4. Central Tendency – Rate everyone as average.
5. Recency Effect – Focusing on recent performance instead of entire year.
6. Personal Prejudice – If the rater dislikes one group or employees, he may rate
them at the lower end.
7. Favoritism – Evaluating friends or those who don’t make waves, etc. More
favorably than others
10
Sultan Ul-Uloom College Of Pharmacy, Banjara Hills, Hyd.
