This document discusses various methods for performing performance appraisals. It defines performance appraisal as evaluating the personality, performance, and potential of employees. Some key methods discussed include rating scales, checklists, forced choice, critical incidents, essays, and cost accounting. Rating scales involve rating employees on predefined criteria while checklists involve describing employee performance. Forced choice involves selecting the most and least descriptive phrases for employees. Critical incidents involve recording effective and ineffective employee behaviors. Essays require rating supervisors to describe employee strengths and weaknesses. Cost accounting evaluates employees' costs and contributions in monetary terms. The document also discusses advantages and limitations of different appraisal methods.

1. PERFORMANCE
APPRAISAL
METHODS
SUBMITTED BY
MOHD AAMIR (PM/2014/406)
NIPER HYDERABAD

2. How it is defined?
Performance appraisal refers to all those procedures that are used to evaluate
the
Personality
Performance
Potential of a group

3. Objectives of Performance appraisal
Performance appraisal can be done by keeping the following objectives in mind
To maintain records in order to determine compensation packages, wage
structure, salaries raise etc.
To identify the strength and weaknesses of employees to place right men to
right job.
To assess the potential present in a person for further development
It serves basis for influencing working habits of employees.

4. Advantages of Performance appraisal
Performance appraisal is the investment for the company which can be justified by following :
Promotion
Compensation
Employees development
Selection validation
Communication
Motivation

5. TYPES OF APPRAISAL METHODS
Appraisal methods can be broadly classified into two groups :
Past oriented methods
Future oriented methods

6. PAST ORIENTED METHODS
Rating scales
Checklist
Force choice method
Critical incident method
Field review method
Confidential records
Essay method
Cost accounting method

7. RATING SCALES
It consists of several numerical scales each representing a job related performance criterion
such as dependability, initiative, output, attendance, attitude, co-operation. The one major
provision in selecting traits is that they should be in some way relevant to the appraisee's job.

8. ADVANTAGES DISADVANTAGES
Structured and standardized. This allows ratings to
be easily compared and contrasted - even for entire
workforces.
Trait relevance
Same basic appraisal process and rating criteria.
Encourages equality in treatment for all appraises
It is possible that an employee's performance may
depend on factors that have not been included in
the selected traits.
Rating scale methods are easy to use and
understand
Selective perception i.e. assessments of what a
person is "really like", and then seek evidence to
support that view
The result is widespread acceptance and popularity
for this approach.
Problems of perceived meaning occur when
appraisers do not share the same opinion about the
meaning of the selected traits and the language
used on the rating scales.

9. Checklist
Checklist contains a list of statements on the basis of which the rater describes the on job
performance of employees

10. Forced Choice Method
In the forced choice method the rater is forced to select statements which are readymade.
This method makes use of several sets of pair phrases, two of which may be positive and two
negative and the rater is asked to indicate which of the four phrases is the most and least
descriptive of a particular worker.
Favorable qualities earn plus credit and unfavorable ones earn the reverse

11. Field review method
The appraiser goes to the field and obtains the information about work performance of the
employee.
Questioning the individual, his peer group , and his superiors.
At this stage it would not be out of context to mention some of the limitations associated with
trait-based methods of performance evaluation.
First, the trait-based methods are based upon traits (like integrity and consciousness) which may
not be directly related to successful job performance. An employee can change behavior, but not
personality.

12. Critical incident technique
Managers prepare a list of very effective and ineffective behavior of an employee
These critical incident represent the outstanding or poor behavior of the employees
The manager periodically records critical incidents of employee behavior .
Example
Feb 25 : Sales clerk patiently attended to the customers complaint. He is polite, prompt,
enthusiastic in solving customer problems
Feb 26 : Sales assistant stayed 45 mins beyond his break during the busiest part of the day. HE
failed to answer the store manager’s call thrice. He is uninterested in work.

13. Limitations of critical incident technique
Negative incidents may be more noticeable than positive incidents
Results in very close supervision which may not be liked by the employee
The recording of the incident is the chore for the supervisor concerned who may be too busy or
forget to do it.

14. ESSAY EVALUATION METHOD
The rater is asked to express the strong as well as the weak points of employee’s behavior
Rater’s consider the employee’s :
oJob knowledge and potential
oUnderstanding company’s programs, policies, and objectives
oRelation with coworkers and supervisors
o Planning, organizing, or controlling activity
oAttitude and perception

15. Limitations of essay evaluation method
Highly subjective.
Supervisor may write biased essay.
Difficult to find effective writers.
A busy appraiser may write the essay hurriedly without assessing properly the actual
performance of the worker.
If the appraiser takes a long time it becomes uneconomical from the point of view of the firm.

16. CONFIDENTIAL REPORTS
It is mostly used in government organizations.
Prepared, generally at the end of every year, by the employee’s immediate superior.
It does not offer any feedback to the appraisee.
Appraisee does not know about :
Why his ratings have fallen despite his best efforts
Why others are rated high when compared to him, how to rectify his mistakes.
NOTE : In recent years, due to pressure from courts and trade unions, the details of a negative
confidential report are given to the appraise.

17. COST ACCOUNTING METHOD
HRA is the process of Assigning, budgeting, and reporting the cost of human resources incurred
in an organization, including wages and salaries and training expenses
Human resource accounting method tries to find the relative worth of these assets in the terms
of money.
In this method the Performance appraisal of the employees is judged in terms of cost and
contribution of the employees.
The cost include all the expenses incurred on them like their compensation, recruitment and
selection costs, induction and training costs
Contribution includes the total value added (in monetary terms)