The critical incident method is an objective performance appraisal method based on observable employee behaviors rather than subjective ratings. Managers document specific positive and negative critical incidents as they occur throughout the review period. These critical incidents, which focus on essential job duties, are then used to evaluate employee strengths and areas for improvement. By documenting incidents over time, the method avoids bias from recent events and provides documentation to support disciplinary actions if needed. It also gives managers opportunities to coach employees and identify process improvements through analysis of routinely problematic incidents.

1. Critical incident method of performance appraisal
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I. Contents of getting critical incident method of performance appraisal
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Performance appraisals are used to evaluate employees' work and productivity, recognize their
accomplishments, identify training opportunities and help the worker develop new skills and set
performance goals for the coming year. Appraisals take many forms, depending on the nature of
the business and its organizational culture. The critical incident appraisal method is based on
objective, observable employee performance, rather than subjective ratings or rankings used in
other appraisal methods.
Critical Incident Definition
Critical incident is a misleading term. It suggests something bad happening, such as a serious
workplace accident. But in performance appraisals, critical incidents can be both good and bad.
What makes them critical is that they are significant in some way, to the employee, manager,
work group or the customer. It can be a difficult project or assignment that was successfully
completed; a situation that challenges a worker's understanding and attitudes; or an incident that
involved conflict, anger, or criticism.
Appraisal Method
The manager describes, in writing, an employee's behavior in critical incidents that occur
throughout the evaluation period. He documents what happened, who was involved and what the
employee did or failed to do. Managers document incidents as they occur, and they may be
positive and negative events. The documented critical incidents are used in preparing the

2. performance evaluation to identify employee strengths and opportunities for improvement.
Because the nature and severity of critical incidents may vary, managers often assign a score to
each incident. For example, offending an important client would be a negative critical incident
with potentially serious consequences that would outweigh many positive critical incidents.
Advantages
The critical incident method has the advantage of being task-focused. It focuses on the essential
duties of an employee's job and how well she performs those duties. It is based on direct
observation by the manager and not second-hand accounts. In this approach, managers gather
information over time. They keep a log of positive and negative incidents, recorded at the time
they occurred. So, the annual performance appraisal is not overly influenced by an employee's
most recent accomplishments or problems.
It is an effective relationship building tool because the manager must spend more time in the
work area observing and interacting with employees, rather than in her office. This gives her the
opportunity to get to know each worker, to provide coaching and guidance; and to get feedback
on what is working well and what is not. In addition, the critical incident log provides the
required performance or behavior documentation necessary for a manager to take disciplinary
action with an employee.
Process Improvement Tool
Health care, power plants, aviation and other high risk industries use critical incidents as the
starting point for improving processes and reducing risks. Critical incident documentation can
identify areas where workers routinely have problems; where the work flow backs up; or where
safety or security issues occur. The manager can interview those involved to collect information
to supplement his own observations of the incident to help clarify the problem and identify
solutions.
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III. Performance appraisal methods

3. 1.Ranking Method
The ranking system requires the rater to rank his
subordinates on overall performance. This consists in
simply putting a man in a rank order. Under this method,
the ranking of an employee in a work group is done
against that of another employee. The relative position of
each employee is tested in terms of his numerical rank. It
may also be done by ranking a person on his job
performance against another member of the competitive
group.
Advantages of Ranking Method
i. Employees are ranked according to their performance
levels.
ii. It is easier to rank the best and the worst employee.
Limitations of Ranking Method
i. The “whole man” is compared with another “whole man”
in this method. In practice, it is very difficult to compare
individuals possessing various individual traits.
ii. This method speaks only of the position where an
employee stands in his group. It does not test anything
about how much better or how much worse an employee
is when compared to another employee.
iii. When a large number of employees are working, ranking
of individuals become a difficult issue.
iv. There is no systematic procedure for ranking individuals
in the organization. The ranking system does not eliminate
the possibility of snap judgements.
2. Rating Scale
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. Advantages – Adaptability, easy to use, low cost,
every type of job can be evaluated, large number of
employees covered, no formal training required.
Disadvantages – Rater’s biases

4. 3. Checklist method
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.
Advantages – economy, ease of administration, limited
training required, standardization. Disadvantages – Raters
biases, use of improper weighs by HR, does not allow
rater to give relative ratings
4. Critical Incidents Method
The approach is focused on certain critical behaviors of
employee that makes all the difference in the
performance. Supervisors as and when they occur record
such incidents. Advantages – Evaluations are based on
actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases,
chances of subordinate improvement are high.
Disadvantages – Negative incidents can be prioritized,
forgetting incidents, overly close supervision; feedback
may be too much and may appear to be punishment.
5. Essay Method

5. In this method the rater writes down the employee
description in detail within a number of broad categories
like, overall impression of performance, promoteability
of employee, existing capabilities and qualifications of
performing jobs, strengths and weaknesses and training
needs of the employee. Advantage – It is extremely
useful in filing information gaps about the employees
that often occur in a better-structured checklist.
Disadvantages – It its highly dependent upon the writing
skills of rater and most of them are not good writers.
They may get confused success depends on the memory
power of raters.
6. Behaviorally Anchored Rating Scales
statements of effective and ineffective behaviors
determine the points. They are said to be
behaviorally anchored. The rater is supposed to
say, which behavior describes the employee
performance. Advantages – helps overcome rating
errors. Disadvantages – Suffers from distortions
inherent in most rating techniques.
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