Outline the Methods of Performance Appraisal

1. METHODS OF PERFORMANCE APPRAISAL
With the evolution and development of appraisal system, a number of methods
or techniques of performance appraisal have been developed. The important
among them are:
1. TRADITIONAL METHODS:
a) Straight ranking method: This is the oldest and simplest method of
Performance Appraisal by which employees are tested in order of merit giving
some numerical rank and placed in a simple grouping.
b) Paired comparison techniques method: This is somewhat better method of
Performance Appraisal as each employee is compared with others in pairs at a
time.
c) Grading method: This method helps in understanding the Performance of an
employee are identified.
d) Graphic rating scale: Graphic rating scale is normally a continuous scale
which enables a rater to mark somewhere along a continuum.
e) Forced choice description method: It is a combination of objective and
subjective judgment on an individual employee’s performance against each
rating element.
f) Checklist method: It is a mere process of reporting employee’s performance
compiling yes/no responses.
g) Free essaymethod: It is an open ended qualitative appraisal of employees.
h) Critical incident method: This method measures employee’s performance
in terms of certain events or critical incidents instrumental for success or failure
on the job.
i) Group appraisal method: It is an evaluation of an employee by multiple
judges.
j) Field review method: this is conducted by the HR department by
interviewing the supervisor of an employee to understand the subordinate
employee’s performance.

2. 2. MODERN METHODS OF PERFORMANCE APPRAISAL:
Management by objectives is a comprehensive management approach which is
adopted for performance appraisal and so also for organizational development.
a) Assessment centre method:
This method is to test candidates in a social situation by a number of assessors,
using a variety of criteria. Management by objectives is a comprehensive
management approach which is adopted for Performance Appraisal and so also
for organizational development.
b) Human assetaccounting method:
This is estimating the goodwill value and can be appraised by developing a
procedureto undertake periodic measurement of certain variables.
c) Behaviorally anchoredrating scales:
Behaviorally Anchored Rating Scales (BARS) is a relatively new technique
which combines the graphic rating scale and critical incidents method. It
consists of predetermined critical areas of job performance or sets of behavioral
statements describing important job performance qualities as good or bad.
These statements are developed from critical incidents. In this method, an
employee’s actual job behavior is judged against the desired behavior by
recording and comparing the behavior with BARS. Developing and practicing
BARS requires expert knowledge.
d) Potential appraisal:
Potential appraisal is a holistic approachfor studying wholesome qualities of an
employee worth a given intellect, personality and character.
e) 360-degreefeedback:
As stated earlier, where multiple raters are involved n evaluating performance,
the technique is called 360-degree appraisal. The 360-degree technique is
understood as systematic collection of performance data on an individual or
group, derived from a number of stake holders-the stake holders being the
immediate supervisors, team members, customers, peers, and self. In fact,

3. anyone who has useful information on ‘how an employee does the job’ may be
one of the appraisers.
The 360-degree appraisal provides a broader perspective about an employee’s
performance. In addition, the technique facilities greater self development of the
employees. For one’s development, multi source feedback is highly useful. It
enables an employee to compare his or her perceptions about self with
perceptions of others. Besides, the 360-degree appraisal provides formalized
communication links between an employee and his or her customers. It makes
the employee fell much accountable to his or her internal or external customers.
The technique is particularly helpful in assessing soft skills possessed by
employees. By design, the 360-degree appraisal is effective in identifying and
measuring interpersonal skills, customer satisfaction, and the team building
skills. However, there are drawbacks associated with the 360-degree feedback.
Receiving feedback on performance from multiple sources can be intimidating.
It is essential that the organization creates a non-threatening environment by
emphasizing the positive impact of the technique on an employee’s performance
and development. Further, firms that used the technique take a long time on
selecting the rater, designing questionnaires, and analyzing the data. In addition,
multiple raters are less adept at providing a balanced and objective feedback
than the supervisors who are sought to be replaced. Raters can have enormous
problems separating honest observation from personal differences and biases.