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Performance appraisal methods
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I. Contents of getting performance appraisal methods
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Companies and managers use a number of common appraisal methods to assess employee
performance. Each technique has pros and cons. To determine which technique works best for
your business, you need to understand the purposes of appraising performance. A performance
appraisal should motivate an employee to better performance by helping him understand why he
needs to move away from poor performance or toward critical objectives.
Rating Scales
The graphic rating scale and behavioral rating scale are two common rating scale appraisal
techniques. With the graphic scale, employees are simply assigned a score on criteria important
to job success. The behavioral scale focuses on actual behaviors. Pros of ratings scales include
ease of use and understanding. Many managers and employees are familiar with them. They
offer a simple way to communicate areas of strengths and weaknesses. A common negative of
rating scales is the assumption that they are directly tied to an employee's raise or bonus. This
can cause score inflation. Managers can also have negative bias toward employees.
Narrative Techniques
The narrative technique and critical-independent method involve more details analyses of job
performance. You write an essay assessment of performance with the narrative and keep a
running log describing positive and negative performance and behaviors with the critical-
independent method. A pro of these techniques is the thoroughness of detail in analyzing
employee behaviors. Additionally, you can focus on praising positive behavior and addressing

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areas for correction. A concern is the reaction of the employee, though. He might interpret the
evaluation too positively or too negatively relative to a scoring system.
Comparison Methods
The multiperson comparison method and forced distribution methods are two common
comparison appraisal techniques. These approaches compare the subject employee's performance
to peers. This allows you to communicate to an employee areas in which he over- or under-
performs relative to others in similar positions. This can motivate performance in competitive
workplaces and among competitive employees. The risks of these methods include the potential
of in-fighting and the lack of harmony you might see in your employee ranks.
360 Feedback
A popular contemporary appraisal technique is the 360 degree feedback. In this method,
employees are evaluated by colleagues, customers, subordinates, other interested parties an
supervisors. The major advantage of this technique is that it offers the employee a glimpse of
how others view his performance in various relationships critical to his job. It also allows a better
chance to compare different perspectives in the evaluation process. Biased evaluators, poor
alignment with goals and negative employee feelings are among cons of this approach.
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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

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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
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

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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
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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