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1. Performance appraisal standards
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I. Contents of getting performance appraisal standards
==================
Setting employee performance standards, and then monitoring employee progress, are important
to the development of your staff, according to the University of California at Berkeley Human
Resources Department. A manager should work with the employee to develop a set of standards
that both parties understand and can commit to. When employees participate in creating their
own performance standards, they have an increased feeling of responsibility for reaching, and
even exceeding, those standards.
Step 1
Review the job description with the employee, and discuss what sort of measurable goals the
employee should set. A standard needs to be measurable so you have something to compare the
performance to from year to year. It also enables you to compare one employee's performance
with another employee's performance in the same position. Measurable goals could be an
increase in revenue in the case of salespeople; inbound or outbound accounting activity in the
case of accounts payable and receivable staff; or per unit productivity in the case of a
manufacturing or production job.
Step 2
Analyze any historical data available on the performance goals you have set, and then begin
creating performance goals based on the historical data. Use monthly averages to help create the
numbers you will begin with.
Step 3

2. Determine what kind of progress you would like to see the employee achieve, and then place a
number on that progress. For example, you may want a salesperson to have a 10 percent increase
in revenue for the coming year, or you may want to see a production employee raise his per unit
number by 20 percent.
Step 4
Apply your increase to the average numbers, and then develop a per month schedule of standards
based on your data. Remember your numbers will more than likely be cyclical. That means
certain months are historically more productive than others. Use that historical cycle when
creating a performance standards criteria.
Step 5
Implement the performance standards and then schedule a meeting for the beginning of each
month with the employee to discuss the standards. Offer advice on how to improve performance,
and keep a record of each meeting to be used at the annual performance review.
==================
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

3. 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
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

4. 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
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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