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1. Method of performance appraisal
In this file, you can ref useful information about method of performance appraisal such as
method of performance appraisal methods, method of performance appraisal tips, method of
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assistant for method of performance appraisal, please leave your comment at the end of file.
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I. Contents of getting method of performance appraisal
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Apart from earlier techniques of appraisals mentioned here, we now have modern methods too.
Some of these are:-
1. Assessment centre method: This method was used for the first time in 1930 by the German
army and then in 1960’s by the British army. This method tests a candidate in different social
situations using a number of assessor and procedures. The performance of an employee an also
his potential for a new job is evaluated in this method by assessing his performance on job
related simulations. Characteristics that the concerned managers feel are important for the
success of a particular job are included in these simulations. Techniques like business games role
playing and in basket exercises are used in this method. The employees are evaluated
individually as well as collectively on job related characteristics. Personal interview and
projective tests help in assessing the motivation, career orientation and dependence on others of
an employee. To measure the intellectual capacity written tests are used. The evaluators in this
method consist of experienced manager working at different levels who prepare a summary
report for the management as well as for the employees. This technique usually measures the
planning ability interpersonal skills and organizational skills of an employee.
2. Human Resource Accounting Method: Human resources are a valuable asset for any
organization and it can be valued in monetary terms. This method evaluates the performance of
an employee in terms of costs and contributions. HR costs include expenses incurred on HR
planning recruitment selection induction and training. The difference between this costs and the

2. contribution by an employee reflects the performance of that employee. This method is still
developing hence is not very popular at present.
3. Behaviorally anchored rating scale (BARS): This method combines the graphic rating scale
and the critical incident method. It determines in advance the critical areas of the performance
and the most effective behavior to achieve the results. Then the actual job behavior of an
employee is evaluated against the predetermined behavior.
The following steps are used for constructing BARS.
1. Supervisor and other persons well acquainted with a job are asked to described specific critical
incidence of effective performance behavior
2. Then these persons categorized the incidents into sets of performance dimensions and each set
is then defined.
3. These people then reallocate the original critical incidents. They are given the cluster
definition and critical incidents and are asked to re-design each incident to the dimensions that
describes it the best. A critical incidents is retain only a some percentage that is usually between
50 – 80 percent of this group assigns the incidents to the same cluster as was done by the earlier
group.
4. The second group then rates each incident on a 7 – 9 point scale where the rating is done on
the basis of how well the behavior described in the incidents represented the performance on the
appropriate dimensions.
5. A sub set of incidents is used as behavior anchors for the performance dimensions.
4 Appraisal through management by objectives (MBO): This concept was introduced by Peter
Drucker in 1954 who named it management by objectives and self control. It is an effective way
it is also known as goal setting approach to appraisal .In this process the supervisor and
subordinate members jointly identify the common goals of the organization and set the areas of
the responsibility of each individual in terms of results expected from that person. These
measures are use for operating the unit as well as for appraising the performance of the
employees.
5 The 360 degree appraisal: The 360 degree method of performance appraisal is used to make the
appraisal process more transparent, objective and participative. It introduced the concepts of self
appraisal subordinates appraisal, peer appraisal and appraisal by customers. It is called a 360
degree method because it involves the evaluation of an employee by persons above him, below
him and alongside him. Structured questionnaires are used to collect information from the
seniors, subordinates and peers. The employee to be evaluated thus acquires a central position
and everyone around him participates in the appraisal process in the 360 degree method. The
following four are the main components of 360 degree appraisal :

3. Self appraisal: It allows an employee complete freedom in accessing his or her strengths
objectively and identifying the areas of development. The employees get a chance to share the
development areas with their seniors based on their self appraisal and jointly worked out a plan
in tune with the organizational realities like the availability of resources and time. It also gives a
chance to the employee to express his career plans which is in the interest of the organization as
it knows beforehand the aspirations of its employee.
Appraisal by superiors: An appraisal by superiors involves providing constructive, feedback
about the performance of any employee as well as his development areas during the review
period. It helps in setting goals for the employees that help in achieve the organizational goals
and improve the performance of the employee. The career aspirations of an employee are also
put in proper prospective.
Appraisal by subordinates: This is a unique feature of the 360 degree method of appraisal. As the
subordinates play an important role in the performance of the employee. The feedback by the
subordinates gives firsthand account of how they look at their superior in terms of working style.
The capability of a superior in motivating, delegating the work, building a team and
communicating with them effectively form the basis of appraisal by the subordinates.
Peer appraisal: It also plays an important role in 360 degree appraisal as the role of peers is quite
important in life of an employee. Selecting the right peers is very important and peers from the
departments that are directly related with the department of the employee should also be
included. It mainly focuses on feedback about the style of functioning of the employee under
review and can also include his ability to work as team leader besides his co-operation and
collaboration.
Potential appraisal: It is different from performance appraisal as it refers to the abilities of the
employees that are not being used at the time of appraisal. It searches for the latent abilities of
the employee in discharging higher responsibilities in future. The potential of the employees is
judged on the basis of his present performance, personality traits, past experience and age and
qualification. It also looks at the unused skills and knowledge of an employee. It aims at
informing the employee their future prospectus and helps the organization in drawing your
suitable successions plan. It also requires updating the training efforts regularly and advised the
employees on things which they can do to improve their career prospectus.
==================
III. Performance appraisal methods

4. 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

5. 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

6. 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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