The document outlines various performance appraisal systems used by organizations to evaluate employee performance, such as Management by Objectives (MBO), Forced Distribution, and 360 Degree Feedback. Each method has unique benefits and drawbacks, and the choice of method should consider the organization's workforce and management style. Additionally, it provides tips and resources for further information on performance appraisal forms and phrases.

1. What is performance appraisal system
In this file, you can ref useful information about what is performance appraisal system such as
what is performance appraisal system methods, what is performance appraisal system tips, what
is performance appraisal system forms, what is performance appraisal system phrases … If you
need more assistant for what is performance appraisal 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 what is performance appraisal system
==================
Organizations use a variety of methods for evaluating employee performance. There are so many
types of performance management methods, understanding how each of them works will help
determine the best one to use within your organization. Each type has benefits and drawbacks;
however, an assessment of your work force, management style and business environment will
make the decision easier for you.
Management by Objectives
Management by objectives, or MBOs, is a type of performance management system that requires
the manager and employee to identify employee goals as they relate to the overall business. For
example, a sales representative's objectives may include increasing revenue by 25 percent in 12
months. The employee determines how best to achieve this goal and establishes a timeline for the
tasks she needs to accomplish to increase revenue: improve sales and decrease costs. Often,
MBOs track progress on a quarterly basis, which is one of the benefits of using this method.
Regular feedback is an effective motivator for many employees.
Forced Distribution
The forced distribution method is one that receives criticism and praise due, in part, to the
popularity of this at corporate giant, General Electric, under the leadership of Jack Welch, author
of the book "Winning". Forced distribution--sometimes referred to as forced ranking--requires
managers to determine three groups into which their employees fall according to performance.
The three groups include performance rankings, usually called "20-70-10." This means an

2. organization has 20 percent of its work force in the top rank, average performers compromise
roughly 70 percent of the work force and poor performers comprise the bottom 10 percent. This
method is difficult to promote in small businesses because they don't have enough employees
and this is a very regimented system utilized in large corporate environments.
360 Degree Feedback
The use of a 360 degree feedback appraisal system is ideal for businesses that value the input of
employees concerning the effectiveness of supervisors and managers. This type of performance
appraisal method solicits input from employees of all ranks who interact with the employee
being evaluated. Everyone from executive leaders to frontline workers receive anonymous and
carefully considered feedback from co-workers. Using a 360 degree feedback method requires
training on how to evaluate others. Individuals who don't have experience composing appraisal
statements may need additional training pertaining to evaluating the quality of work rather than
the employee's personality or popularity. Nevertheless, this is a very effective way to get a good
reading on your management talent by obtaining commentary from the people who frequently
interact with managers.
Performance Ranking
Deemed a very competitive method, performance ranking requires managers to evaluate
employees against each other rather than how well the employee performs in relationship to
company goals and objectives. In a small business, this may not be the ideal method for
evaluating performance simply because of the few number of employees. In addition, water
cooler conversations between your employees will inevitably occur where employees start to
compare notes about their performance ratings. This will only fuel a more competitive work
environment.
Combined Manager-Employee Appraisal
This method of employee appraisal combines the employee's self-evaluation and manager
feedback to construct a balanced performance appraisal. This type of evaluation sets the stage for
a discussion to occur between the employee and his manager. This also provides an opportunity
for the employee and manager to work together to identify goals for the year ahead. A combined
approach gives the employee an opportunity to share accomplishments his manager may have
overlooked, which makes for a more comprehensive performance appraisal.
==================
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.
III. Other topics related to What is performance appraisal system (pdf
download)
• Top 28 performance appraisal forms
• performance appraisal comments
• 11 performance appraisal methods
• 25 performance appraisal examples
• performance appraisal phrases
• performance appraisal process
• performance appraisal template
• performance appraisal system
• performance appraisal answers
• performance appraisal questions
• performance appraisal techniques
• performance appraisal format

6. • performance appraisal templates
• performance appraisal questionnaire
• performance appraisal software
• performance appraisal tools
• performance appraisal interview
• performance appraisal phrases examples
• performance appraisal objectives
• performance appraisal policy
• performance appraisal letter
• performance appraisal types
• performance appraisal quotes
• performance appraisal articles