1. Uses of performance appraisal
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I. Contents of getting uses of performance appraisal
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Performance appraisals are periodic assessments of employee performance by supervisors and
managers. Appraisals are typically done once a year, usually on forms authorized by the human
resources department. Small-business owners with few employees may conduct verbal appraisals
in a more informal setting. As part of the appraisal process, employees often complete self-
assessments, which become a part of the human resource file along with their manager's
appraisals. The main purpose of appraisals is to provide constructive feedback.
Evaluation
Companies can use performance appraisals to evaluate employees on how they fared against the
goals and objectives set by their managers. Appraisals are also useful for setting expectations for
the upcoming year. Small-business owners can use appraisals to recognize the extraordinary
efforts of certain employees, while pointing out how they can improve. Support and
encouragement can motivate employees to try even harder in the months ahead. Companies may
also evaluate employees on their teamwork skills. An effective evaluation is direct and precise,
meaning there is no over-the-top praise, no glossing over weaknesses and no surprises.
Development
Evaluation is about identifying performance gaps, while development is about filling in those
gaps. For example, if an employee needs to work on his time management skills, the employer
could organize a training session for all employees who need help in organizational skills.
Businesses can use performance appraisals as the basis for career development plans, including
the identification of skills and training that employees would need to progress up the ranks in a

2. corporate hierarchy. Companies can use appraisals to gain insight into how employees are
completing their tasks and whether these tasks require restructuring. For example, if an employee
is falling behind on his tasks, it could be because of the company's inefficient operations.
Therefore, the key to improving his productivity is not training or reassignment, but process
improvement.
Recognition
Companies may also use performance appraisals to recognize outstanding employees. For
example, employees with a consistent rating in the top five percent of their peer group might be
placed in a management mentoring program and receive pay raises. However, consistently
under-performing employees may be demoted or terminated. Whenever possible, companies
should provide written appraisals because formal records are important for preparing future
appraisals and in legal procedures.
Employee Feedback
Appraisals can also be useful for gathering employee feedback. For example, companies
sometimes ask employees if they are satisfied with their career development plans and what
additional training they might need. This kind of feedback helps human resources and senior
management with career planning.
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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”

3. 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
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. 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

5. 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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