The document provides an overview of performance appraisal purposes, highlighting its role in evaluating employee performance and categorizing them into performers and non-performers, with subsequent rewards or disciplinary actions. It discusses various performance appraisal methods such as ranking, rating scales, checklist, critical incidents, essay, and behaviorally anchored rating scales, detailing their advantages and disadvantages. Additionally, it offers resources for further information on performance appraisal tools and techniques.

1. Performance appraisal purpose
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I. Contents of getting performance appraisal purpose
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Employers conduct performance appraisals to estimate employees' worth. During this process,
the immediate superior prepares a report on the performance of his subordinates during the past
year. The HR department then tabulates the reports and forwards them to upper management.
Significance
Performance appraisals let the management categorize its employees into performers and non-
performers. The management rewards and compensates the performing employees with pay
hikes and promotions. Non-performing employees receive warnings, demotions or transfers.
Benefits
Performance appraisal systems alert employees of their strengths and weaknesses in
performance during the past year so they can take apposite steps accordingly. Top performers'
morale and motivation are very high; they feel appreciated and try to perform even better for the
next round of evaluations. Those who underperform understand their areas of opportunity, which
makes them careful not to repeat mistakes to avoid further disciplinary action.
Types
Performance appraisals focus on either individual employees or teams. In an individual
employee performance appraisal, a superior evaluates an employee's performance during the past
year. The employee’s evaluation may include his attainment of targets, behavior or punctuality.

2. Multiple person performance appraisals evaluate the performances of all the employees of a
team, contrasting each member's contributions with one another.
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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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