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1. Performance appraisal and reward system
In this file, you can ref useful information about performance appraisal and reward system such
as performance appraisal and reward system methods, performance appraisal and reward system
tips, performance appraisal and reward system forms, performance appraisal and reward system
phrases … If you need more assistant for performance appraisal and reward system, please leave
your comment at the end of file.
Other useful material for you:
• performanceappraisal123.com/1125-free-performance-review-phrases
• performanceappraisal123.com/free-28-performance-appraisal-forms
• performanceappraisal123.com/free-ebook-11-methods-for-performance-appraisal
I. Contents of getting performance appraisal and reward system
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Employee recognition programs can boost the morale of employees and positively change the
health of a organization. By instituting performance appraisal and reward systems, an employer
lets its workers know that their hard work pays off and is appreciated.
Function
Performance appraisals and rewards are designed to show recognition to employees. Those who
exemplify outstanding abilities in the workplace are celebrated through an appraisal and reward
system. Managers may offer employee praise in a one-on-one setting, such as a performance
evaluation, or in a group setting among peers. Archer North, a company that designs and
develops employee performance appraisal and corporate evaluation systems, says that social
recognition is powerful and is an effective forum for showing value in employees.
Types
Besides verbal appreciation, employers can show their gratitude by furnishing employees with
tokens of appreciation, or rewards. These may be in the form of award trophies, framed
certificates, special parking spaces, gift cards, pens or a free day off.
Benefits
According to Archer North, when employers praise their employees’ performance it is almost
always a beneficial and positive experience for both the manager and the employee. Appraisal

2. enhances motivation, keeps employees goal-oriented and morale high. With high morale and a
feeling of worth, employees will want to exceed in the workplace.
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III. Performance appraisal methods
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

3. 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
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.

4. 5. 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, 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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