Methods of Performance Appraisal

Methods of Performance Appraisal

Methods of Performance Appraisal are:

1. Rating Scale
2. Checklists
3. Forced choice Method
4. Critical Incident Method
5. Behaviorally Anchored Rating Scales
6. Field Review Method
7. Performance Test
8. Annual Confidential Report
9. Cost Accounting Approach
10. Comparative Evaluation Approach
11. Management by Objective
12. Psychological Appraisal
13. Assessment Centers Notes
14. 360-degree Feedback

Past-oriented Scale

Rating Scale

The typical rating scale system consists of several numerical scales, each representing a job-related performance criterion such as dependability, initiative, output, attendance, attitude, cooperation etc., each scale ranges from excellent to poor.

The disadvantage includes the rater’s biases to influence evaluation. Furthermore, numerical scoring gives an illusion of precision that is really unfounded.

Checklists

Under this method, a checklist of statements on statements on the traits of the employee and his or her job is prepared in two columns i.e., the ‘YES’ column and ‘NO’ column.

All that the rater is to do is to tick the ‘YES’ if the answer is positive and tick ‘NO’ if the answer is ‘NO’. The HR dept. gives a point for every “YES’ when points are allotted the technique becomes a weighted checklist.

• The advantages are economy, ease of administration, limited training of rater & standardization.
• The disadvantage includes improper weights by the HR department.

Forced choice Method

The rater is given a series of statements about the employee these are arranged in the blocks of two or more, and the rater indicates which statement is most or least descriptive of the employee.

• Learns fast———————————————————works hard
• Absent often——————————————others usually tardy

The HR department does actual assessment.

• The advantage is the absence of personal bias in rating.
• A disadvantage is that the statement may not be properly framed.

Critical Incident Method

It focuses on certain critical behaviors of an employee that make all the difference between the effective and non-effective performance of a job. Such incidents are recorded by the superiors as and when they occur.

• One of the advantages of this is that the evaluation is based on actual job-behaviour. It also increases the chance that the subordinate will improve because they learn more precisely what is expected of them.
  
  
• As a disadvantage, negative incidents are generally more noticeable than positive ones.

Behaviorally Anchored Rating Scales

In this, the scale represents a range of descriptive statements of behavior varying from the least to the most effective. A rater must indicate which behavior on each scale best describes an employee’s performance.

BARS the following feature:

• Areas of performance to be evaluated are identified and defined by the people who will use the scales.
  
  
• The scales are anchored by description of actual job behavior that supervisors agree, represent specific level of performance.
  
  
• All dimensions of performance to be evaluated are based on observable behaviors and are relevant to the job being evaluated since BARS are tailored made.
  
  
• Since the raters who will actually use the scale are actively involved in the development process, they are more likely to be committed to the final product.
  
  
• Unfortunately, this also suffers from distortions inherent in most rating techniques.

Field Review Method

This is an appraisal by someone outside the assessor’s own dept., usually someone from the corporate office or HR dept.

Two disadvantages of field review method are:

• An outsider is not familiar with conditions in an employee’s work environment.
  
• He does not have an opportunity to observe employee behavior of performance over a period of time.

Performance Test

With a limited number of jobs, employee assessment may be based upon a test of knowledge and skills. The test may be paper & pencil or an actual demonstration of skills the test must be reliable & validated to be useful. Practically it may suffer if the costs of test development or administration are high.

Annual Confidential Report

ACR is mostly used in government departments, for example ITI, military organizations, etc., it has 12 items namely – attendance, self-expression, ability to work with others, leadership, initiative, technical ability, ability to reason, name, to a few.


Twelve of these are filled on a four-point grade scale (excellent, good, fair, poor). Justification is required for outstanding or poor ratings. Overall rating on a five-point scale was separately given (Outstanding, Very good, Good, Average, Poor). A recommendation for performance was also given.

Cost Accounting Approach

This method evaluates performance from the monetary returns the employee yields to his or her organization. The performance of the employee is evaluated based on the established relationship between the cost and the benefit.

Comparative Evaluation Approach

These are a collection of different methods that compare one worker’s performance with that of his/her co-workers.

They are useful in deciding merit-pay increases, promotions and organizational rewards. The usual comparative forms are ranking method and the paired comparison method.

Future-oriented Appraisal

Management by Objective

It was Peter F Drucker who gave the concept of MBO way back in 1954 when his The Practice of Management was first published. There are four steps:

1. In some organizations, superior and subordinates work together to establish goals. These goals can then be used to evaluate employee performance.
   
   
2. It involves setting the performance standard for the subordinates in a previously arranged time period. As subordinates perform, they know fairly well what there is to do, what has been done, and what remains to be done.
   
   
3. The actual level of goal attainment is compared with the goals agreed upon. This step helps determine possible training needs.
   
   
4. It involves establishing new goals and possibly, new strategies for goals not previously attained. The process is repeated.

The disadvantage is that it is not applicable to all jobs in all organizations. Jobs with little or no flexibility, such as assembly-line work, are not compatible with MBO.

Psychological Appraisal

The appraisal normally consists of in-depth interviews, psychological tests, discussions with supervisors and a review of other evaluations. The psychologist then writes about an employee’s intellectual, emotional, motivational and other- related characteristics that suggest individual potential and may predict future performance.

Since the quality of the appraisal depends largely on the skills of the psychologists, some employees object to this type of evaluation, especially if cross-cultural differences exist.

Assessment Centers Notes

This method of appraising was first applied in the German Army in 1930. In fact, it is a system or organization, where the assessment of several individuals is done by various experts using various techniques. These techniques include in-basket, role-playing, case studies, and simulation exercise, transactional analysis.


In this individuals are brought together to spend two or three days working on an individual or group assignment similar to the ones they would be handling when promoted. Observers rank the performance of each and every participant in order of merit. All assesses get an equal opportunity to show their talents and capabilities and secure promotion based on merit.

360-degree Feedback

Where multiple raters are involved in evaluating performance, the technique is called 360-degree appraisal. The 360- degree technique is understood as a systematic collection of performance data on an individual or group, derived from a number of stakeholders include immediate supervisors, team members, customers, peers, and self.

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