The document discusses key result areas performance appraisal, emphasizing the shift from traditional annual evaluations to a more dynamic performance management system. It outlines various performance appraisal methods including ranking, rating scales, and critical incidents, detailing their advantages and disadvantages. Additionally, it highlights the importance of ongoing feedback and employee involvement in setting objectives to enhance performance outcomes.

1. Key result areas performance appraisal
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I. Contents of getting key result areas performance appraisal
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Performance appraisal was once the unquestioned way of conducting an annual employee
evaluation, the familiar ritual in which employees and managers met to review the employee’s
performance during the year. If the employees were lucky, they walked away with raises, often
tied to a ranking on some sort of rigid, numerical scale. Nobody really liked the process, but in
the old command-and-control style of organizational leadership, this seemed like a perfectly
appropriate model for measuring performance. But today — with widespread emphasis on
teamwork, shared leadership, and an ongoing struggle to find and retain qualified employees —
it’s a model that is falling increasingly out of favor.
Yet if companies don’t do annual performance reviews, what will take their place? More and
more, organizations are turning to systems of performance management. Instead of measuring
employees’ performance and pointing out where they fall short, organizations are discovering
they can achieve more results by finding ways to fine-tune and improve their systems. Some of
the major changes between the old appraisal system and the new performance management
system are highlighted in the chart below:
The easiest way to begin using a performance management system is to have all members of
your organization answer the following questions:

2. 1. What are my major work priorities?
This will help employees identify the “Key Result Areas” of their job. This is not a listing
of everything they do, but typically 4 to 6 major contributions their supervisor/employer
expects from them during the next 6 to 12 months.
2. How will I know I have accomplished those priorities?
For what outcomes or products will each employee be accountable in each “Key Result
Area?” This is typically the end result — something the employees will create or achieve
through the work they do.
3. What will I have to do to get there?
What major activities or tasks must the employees do — and by what dates — to achieve
the outcome or create the product?
4. How will the work I do fit in with my organization’s strategic plan?
All employees need to understand how they fit into the “Big Picture.”
5. If I need help along the way, how can I get it?
What assistance, if any, will your employees need to perform the activities or tasks they
have listed? Are there any professional development areas they should focus on to help
them accomplish their job?
After all employees have answered these questions, they should then meet with their supervisor
to determine how often they should meet to discuss, monitor and recognize progress on
activities, tasks, or outcomes.
For the past few years, New York-based Merrill Lynch & Co., Inc. and other companies have
been making the transition from a traditional performance-appraisal system to one based on the
principles of performance management. At the beginning of the year, employees and managers
set their objectives. Mid-year and year-end reviews follow.
During the mid-year review, the manager and employee sit down to assess the objectives set at
the beginning of the year. They look at the employee’s progress with an eye toward making any
changes necessary to ensure the ultimate success of the plan. They also update whatever kind of
personal development plan the employee may have in place.
The year-end review integrates feedback from peers, assesses the employee’s progress against
business objectives, and identifies the areas in which the employee needs to improve.
Throughout the year, managers are encouraged to provide ongoing feedback to their employees
about their performance.
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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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