The document discusses the ranking method of performance appraisal, highlighting its advantages, such as motivating employees to improve performance and recognizing top performers, as well as disadvantages like potential bias and negative impacts on teamwork. It outlines various appraisal methods, including rating scales, checklists, and 360-degree feedback, while emphasizing the need for businesses to choose the appropriate system for evaluating employee performance. The document also includes links to additional resources for performance appraisal forms and tips.

1. Ranking method of performance appraisal
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I. Contents of getting ranking method of performance appraisal
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A performance appraisal system is a must for most businesses with employees. However, regular
administration of reports is not always a priority with owners and managers. Sometimes
management is confused about how to assess the performance of employees. Using the ranking
method for your performance appraisals takes the guesswork out of your ratings, but it comes
with drawbacks, too.
Definition
Performance appraisals are used to assess how well your employees are performing their duties.
Administered regularly, these reports are valuable tools in managing your staff and ensuring that
productivity is at optimum levels in your department. There are many types of performance
appraisals. Each company must determine which one to use and should train management and
employees on how the system operates. One appraisal method is ranking, also referred to as
forced ranking, which rates an employee in comparison to others instead of against employment
standards for the duties performed. Normally, the ranking system shows a small percentage of
overachieving employees, a large number of average workers and a small amount of
underachieving employees.
Advantages
When ranking employees based on their levels of performance, they may work harder to be on
top in their ratings. Generally, those who rank highest are rewarded with pay increases, bonuses,

2. promotions and other benefits. This system ensures that those who deserve recognition for their
efforts are not taken for granted by falling through the cracks when it comes to documenting
their success. It also allows you to see, in black and white, whom you can rely on for difficult
assignments and who needs added help to improve performance. In addition, ranking helps you
know who the best and brightest are so that you can ensure their job satisfaction and retention.
Disadvantages
When comparing one employee to another, it is sometimes hard for a manager to remain
objective. Identifying the performance accomplishments of an employee can be clouded by how
well-liked that person is in the work group. Also, undesirable competitive behavior could
increase when employees at the top of the ranking are earning financial incentives. It's
imperative for members of a group to work well together and, even if getting along with others is
one of the objectives that determines ranking, it is tempting to withhold important information,
not communicate effectively with teammates and exhibit other actions that sabotage the outcome
of a coworker's performance. Also, if all of your employees are performing at a satisfactory level
or above, you need to choose the ones who will be ranked at the lowest levels. This does not
accurately represent the performance of some employees, which can negatively impact morale.
Alternatives
Other employee appraisal methods can be used if ranking does not fit into your corporate
mission. Comparing employees to performance standards instead of each other is a type of rating
system that is based on results. The performance report states a job duty and offers a variety of
ways to accomplish it, with each one describing a level of performance from less than
satisfactory to outstanding. Number rating identifies how well the employee is performing. This
is similar to the results method, except that the levels of performance are weighted and the
outcome is a total number that determines an overall score. A 360-degree feedback system uses
anonymous reports from people with whom the employee comes in contact, such as other
supervisors, coworkers and customers.
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III. Performance appraisal methods

3. 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

4. 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

5. 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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