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Various methods of performance appraisal
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I. Contents of getting various methods of performance appraisal
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Want to know the right way to motivate employees? Begin by choosing the right performance
appraisal method to judge where the scope for improvement exists within your organization.
Different Methods of Performance Evaluation
Performance Evaluation Techniques Performance appraisal is a critical management tool to
evaluate the performance of employees and their contribution to achieving the organization’s
goals. Different companies employ different performance appraisal methods to assess individual
performance. Each method has its own pros and cons because performance cannot be objectively
quantified 100% accurate in each and every case. Therefore, some amount of subjectivity gets
introduced into each method.
Management by Objectives (MBO)
One of the most contemporary and widely accepted approaches that is used in place of
conventional performance appraisal techniques is MBO. This is a more involved process that
begins from goal setting and ends with evaluation of the results and measurement of deviations
from the goals. It involves constant engagement with employees aiming to enhance their
performance through constant monitoring and correcting deviations along the way. The emphasis
here is on not just assessing the performance, but also providing regular and specific feedback to
the employee so that he gets an opportunity to improve his performance by addressing the

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specific issues of concern. A large number of organizations are adopting this method of
performance appraisal because of its more comprehensive approach.
Critical Incident Method
The manager or the supervisor evaluates performance on the basis of certain specific incidents
or behavioral actions, whether positive or negative, within a given period of time. The appraiser
keeps a note of such specific incidents throughout the evaluation period and makes a final
assessment at the end.
Graphic Ratings Method
This is one of the traditional ways to appraise an employee’s performance. The manager keeps
a ratings form where the employee’s behavior and actions are rated on certain specific
parameters outlined in the form. Based on these ratings a final appraisal is prepared by the
manager.
Weighted Checklist Method
In this case, the manager who is intimately familiar with the jobs under evaluation prepares a
comprehensive checklist of what constitutes an effective or ineffective behavior on the job. Each
item on the checklist has a different weightage depending on its significance and impact on the
company’s goals. This helps to achieve a more objective and quantified appraisal of individual
performance.
Performance Ranking Method
In this method, each employee’s performance is not evaluated in isolation, but in comparison
to other employees. The performance is ranked for the entire group of employees from best
performer to the worst performer. In this case, the appraiser compares individual performances to
determine the benchmarks of performance, and then rates each individual based on those
benchmarks.
360 Degree Performance Appraisal
The 360 degree performance appraisal method employs multiple approaches to evaluate
individual performance. The manager makes assessment of an employee based on certain
parameters and also makes comparisons between performances of different employees. This
method also includes confidential feedback of employees and supervisors. Subsequently, all the

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data is put together and analyzed to have a comprehensive performance evaluation of an
employee.
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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
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

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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. 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.

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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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