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Performance appraisal policy
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I. Contents of getting performance appraisal policy
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Performance evaluations are one component of a workplace policy referred to as a performance
management system. Performance management is the process that employers use for measuring
how well employees perform their job tasks. A performance management system typically
consists of a job description, performance standards, informal feedback, disciplinary procedures
and a formal evaluation. While it's not required for employers to have a formal performance
evaluation process, HR best practices suggest them, particularly for justifying employment
decisions.
Performance Standards
Job descriptions and performance standards are fundamental to a performance evaluation policy.
A job description contains the essential functions of a job and provides the employee with
guidelines for her responsibilities. Performance standards tell the employee how she must
perform her job functions to meet the employer's expectations. For example, to meet her
employer's performance expectations, a sales representative might be required to achieve $3,000
monthly sales of office equipment and gain two new customers every quarter. However, if she
maintains monthly sales of $5,000 for six months and gains three new customers every quarter,
she has exceeded her employer's expectations.
Introductory Performance Evaluation
Many employers evaluate performance when an employee completes his first 90 days on the job.
This first evaluation is to determine whether the employee understands his role and actually has
the skill set and qualifications to perform his job duties. If the employee's initial performance

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evaluation reflects substandard work, the company can offer remedial training or pair him with
an experienced employee for further orientation on company or department work processes.
Employers that don't offer additional training may reconsider whether to keep the employee
onboard or give him another opportunity to improve his performance.
Supervisor Preparation
When a supervisor prepares for an employee's annual performance evaluation, he reviews the
employee's job performance for the entire evaluation period -- 12 months -- and substantiates his
ratings with progress reports, disciplinary action memos, commendations, attendance records and
informal feedback on the employee's performance from other managers, employees or
customers. Depending on the type of performance evaluation, preparation could take two to three
weeks. Supervisors might review the employee's personnel file or consult other supervisors or
managers with whom the employee may have worked during the 12-month period.
Types of Evaluations
The simplest evaluations use numerical ratings for categories of job functions. These are graphic
rating scales, and they are suitable for production work environments where employees'
performance can be easily measured using a scale of 1 to 5 in areas such as attendance,
reliability, accuracy and teamwork. At the other end of the spectrum are more complex forms of
performance evaluations, such as management by objectives, or MBO. Performance evaluations
might also include narratives that require supervisors to construct essays about employees' work.
Evaluations known as "forced ranking" were popularized by former CEO of GE, Jack Welch.
Forced ranking entails classifying workers into three groups: 20 percent as high-performing
employees, 70 percent as average performers and 10 percent of the employee base as low-
performing employees.
Evaluation Meeting
The final stage in many performance evaluation procedures is the face-to-face meeting that
supervisors have with their employees to discuss their ratings. The meeting is intended to foster
two-way supervisor-employee dialogue and prepare the employee for the next evaluation period
through goal-setting and correcting existing performance deficiencies. In addition, many
employers tie performance evaluation to salary or wage increases and use the ratings to
determine the percent by which to raise the employee's compensation.
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III. Performance appraisal methods

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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
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

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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.
5. Essay Method

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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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