Performance Appraisal Methods

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Performance Appraisal Methods

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“It is a systematic evaluation of an individual with respect to performance on the job and
individual’s potential for development.”
Definition 2: Formal System, Reasons and Measures of future performance
“It is formal, structured system of measuring, evaluating job related behaviors and
outcomes to discover reasons of performance and how to perform effectively in future so
that employee, organization and society all benefits.”
Meaning of Performance Appraisals

Performance Appraisals is the assessment of individual’s performance in a systematic way.
It is a developmental tool used for all round development of the employee and the
organization. The performance is measured against such factors as job knowledge, quality
and quantity of output, initiative, leadership abilities, supervision, dependability, co-
operation,
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Performance Appraisals and Job Analysis Relationship
https://corehr.wordpress.com/performance-management/performance-appraisal-methods/ 1/35
Job Analysis à Performance Standards à Performance Appraisals

Describe the work and Translate job requirements Describe the job relevant
personnel requirement of a into levels of acceptable or strengths and weaknesses of
particular job. unacceptable performance each individual.
Objectives of Performance Appraisals

Use of Performance Appraisals
1. Promotions
2. Confirmations
3. Training and Development
4. Compensation reviews
5. Competency building
6. Improve communication
7. Evaluation of HR Programs
8. Feedback & Grievances
4 Goals of Performance Appraisals

General Goals Specific Goals
Developmental Use Individual needs
Performance feedback
Transfers and Placements
Strengths and Development needs
Administrative Decisions / Uses Salary
Promotion
Retention / Termination
Recognition
Lay offs
Poor Performers identification
Organizational Maintenance
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Training Needs
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Organizational Goal achievements
Goal Identification
HR Systems Evaluation
Reinforcement of organizational needs
Documentation Validation Research
For HR Decisions
Legal Requirements
Performance Appraisal Process

1. Objectives definition of appraisal
2. Job expectations establishment
3. Design an appraisal program
4. Appraise the performance
5. Performance Interviews
6. Use data for appropriate purposes
7. Identify opportunities variables
8. Using social processes, physical processes, human and computer assistance
Difference between Traditional and

Modern (Systems) approach to Appraisals
Categories Traditional Appraisals Modern, Systems Appraisals
Guiding Values Individualistic, Control Systematic, Developmental,
oriented, Documentary Problem solving
Leadership Styles Directional, Evaluative Facilitative, Coaching
Frequency Occasional Frequent
Formalities High Low
Rewards Individualistic Grouped, Organizational
TECHNIQUES / METHODS OF PERFORMANCE

APPRAISALS
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Numerous methods have been devised to measure the quantity and quality of performance
appraisals. Each of the methods is effective for some purposes for some organizations only.
None should be dismissed or accepted as appropriate except as they relate to the particular
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needs of the organization or an employee.
Broadly all methods of appraisals can be divided into two different categories.
Past Oriented Methods
Future Oriented Methods
Past Oriented Methods
1. Rating Scales: 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
2. Checklist: 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
3. Forced Choice Method: The series of statements arranged in the blocks of two or
more are given and the rater indicates which statement is true or false. The rater is forced
to make a choice. HR department does actual assessment. Advantages – Absence of
personal biases because of forced choice. Disadvantages – Statements may be wrongly
framed.
4. Forced Distribution Method: here employees are clustered around a high point on a
rating scale. Rater is compelled to distribute the employees on all points on the scale. It is
assumed that the performance is conformed to normal distribution. Advantages –
Eliminates Disadvantages – Assumption of normal distribution, unrealistic, errors of
central tendency.
5. 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.
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.
7. Field Review Method: This is an appraisal done by someone outside employees’ own
department usually from corporate or HR department. Advantages – Useful for managerial
level promotions, when comparable information is needed, Disadvantages – Outsider is
generally not familiar with employees work environment, Observation of actual behaviors
not possible.
8. Performance Tests & Observations: This is based on the test of knowledge or skills. Close and accept
The tests may be written or an actual presentation of skills. Tests must be reliable and
validated to be useful. Advantage – Tests may be apt to measure potential more than actual
performance. Disadvantages – Tests may suffer if costs of test development or
administration are high.
9. Confidential Records: Mostly used by government departments, however its

application in industry is not ruled out. Here the report is given in the form of Annual
Confidentiality Report (ACR) and may record ratings with respect to following items;
attendance, self expression, team work, leadership, initiative, technical ability, reasoning
ability, originality and resourcefulness etc. The system is highly secretive and confidential.
Feedback to the assessee is given only in case of an adverse entry. Disadvantage is that it is
highly subjective and ratings can be manipulated because the evaluations are linked to HR
actions like promotions etc.
10. 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.
11. Cost Accounting Method: Here performance is evaluated from the monetary returns
yields to his or her organization. Cost to keep employee, and benefit the organization
derives is ascertained. Hence it is more dependent upon cost and benefit analysis.
12. Comparative Evaluation Method (Ranking & Paired Comparisons): These are
collection of different methods that compare performance with that of other co-workers.
The usual techniques used may be ranking methods and paired comparison method.
Ranking Methods: Superior ranks his worker based on merit, from best to worst.
However how best and why best are not elaborated in this method. It is easy to
administer and explanation.
Paired Comparison Methods: In this method each employee is rated with another
employee in the form of pairs. The number of comparisons may be calculated with
the help of a formula as under.
N x (N-1) / 2
Future Oriented Methods
1. Management By Objectives: It means management by objectives and the

performance is rated against the achievement of objectives stated by the management.
MBO process goes as under.
Establish goals and desired outcomes for each subordinate
Setting performance standards

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the employee
Establish new goals and new strategies for goals not achieved in previous year.
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Advantage – It is more useful for managerial positions.
Disadvantages – Not applicable to all jobs, allocation of merit pay may result in setting
short-term goals rather than important and long-term goals etc.
2. Psychological Appraisals: These appraisals are more directed to assess employees

potential for future performance rather than the past one. It is done in the form of in-depth
interviews, psychological tests, and discussion with supervisors and review of other
evaluations. It is more focused on employees emotional, intellectual, and motivational and
other personal characteristics affecting his performance. This approach is slow and costly
and may be useful for bright young members who may have considerable potential.
However quality of these appraisals largely depend upon the skills of psychologists who
perform the evaluation.
3. Assessment Centers: This technique was first developed in USA and UK in 1943. An
assessment center is a central location where managers may come together to have their
participation in job related exercises evaluated by trained observers. It is more focused on
observation of behaviors across a series of select exercises or work samples. Assessees are
requested to participate in in-basket exercises, work groups, computer simulations, role
playing and other similar activities which require same attributes for successful
performance in actual job. The characteristics assessed in assessment center can be
assertiveness, persuasive ability, communicating ability, planning and organizational
ability, self confidence, resistance to stress, energy level, decision making, sensitivity to
feelings, administrative ability, creativity and mental alertness etc. Disadvantages – Costs
of employees traveling and lodging, psychologists, ratings strongly influenced by
assessee’s inter-personal skills. Solid performers may feel suffocated in simulated
situations. Those who are not selected for this also may get affected.
Advantages – well-conducted assessment center can achieve better forecasts of future

performance and progress than other methods of appraisals. Also reliability, content
validity and predictive ability are said to be high in assessment centers. The tests also make
sure that the wrong people are not hired or promoted. Finally it clearly defines the criteria
for selection and promotion.
4. 360-Degree Feedback: It is a technique which is systematic collection of performance

data on an individual group, derived from a number of stakeholders like immediate
supervisors, team members, customers, peers and self. In fact anyone who has useful
information on how an employee does a job may be one of the appraisers. This technique
is highly useful in terms of broader perspective, greater self-development and multi-source
feedback is useful. 360-degree appraisals are useful to measure inter-personal skills,
customer satisfaction and team building skills. However on the negative side, receiving
feedback from multiple sources can be intimidating, threatening etc. Multiple raters may
be less adept at providing balanced and objective feedback.
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147. adesalu T S
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149. Ayoola Charles

October 11, 2014 at 11:04 am
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151. vivek
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The truth with preformance appraisal is one of the best tool for human resource to
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153. Nixon R. Chimhawu

October 19, 2014 at 10:36 am
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154. Anonymous
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157. silantoi

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self explanatory,thanks
158. Anonymous
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can any of you tell me what is mean by “Group Appraisal”…?
159. najuka
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what is mean by Group Appraisal?
160. ASHMI
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161. ASHMI
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Information is very much useful me Thankyou
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168. Anonymous
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thanks for the informetion
169. komala
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this very good information but, we also need some information about process of
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great
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175. saher
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very useful. thanks.
176. Bolden
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thumbs high! great material for Human resources managers
177. Anonymous
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gud, tx
178. Nirav
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good one…
179. Anonymous
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great inf. but any body help me regarding which appraisal technique use for different
management level?
180. moniq
March 8, 2016 at 2:29 pm
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thanks 4 infmtn
181. Sharada
March 10, 2016 at 9:45 pm
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Information is very nice
182. Anwesha Ghosh

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..Going to use this for my presentation
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183. Santosh Kumar Close and accept

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Nicely presented, easy to understand the concept. Thank you!!
184. Santosh Kumar Singh

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Nice one, help the note me lot. easy to undersand.
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VERY USEFUL INFORMATION.
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188. Emmanuel Ssemugenyi

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Good Article, though some techiniques need thorough explanation such as forced
choice method and forced distribution
189. Rammuni Panchali Nadishka De Silva

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Thank you .. the information flow was very useful. for my studies
190. Manuteju
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more information in it…
191. Joan Amulen

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thnx& Cookies: This site uses cookies. By continuing to use this website, you agree to their use.
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192. Anonymous
February 20, 2017 at 6:55 pm Close and accept
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which part here is The performance discussion method?
193. Anonymous
March 15, 2017 at 8:39 pm
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Thanks for the information
194. Marine Bastain

March 18, 2017 at 5:07 am
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You have brought up a very fantastic points , appreciate it for the post.
195. Princy
April 21, 2017 at 9:27 pm
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Very useful and thanks…
196. Anonymous
May 1, 2017 at 7:21 pm
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very useful material for my HR assignment thank you very much
197. navjot
May 10, 2017 at 4:01 pm
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Useful information , thanks
198. Ula
May 23, 2017 at 5:54 am
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good..i am able to use the useful information provided. Thank you so much.
199. Robern Kipruto

June 12, 2017 at 12:27 pm
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well explained Good work HR dpartment yu have really assisted me
200. alka meto

June 14, 2017 at 9:04 pm
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very selected information and it did add value on my research paper. performance
appraisal i really appreciated your thinking and developing of the material. updated
very&well
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201. amandeep
June 25, 2017 at 12:27 pm Close and accept
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gr8 study work easy to understand .
202. Meher zafar

August 10, 2017 at 11:22 pm
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Really a worth reading blog
203. ABDURRAHMAN ABUBAKAR

August 19, 2017 at 12:31 am
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I really appreciates d articles,pls keep it up and continue posting
204. Dorah Sawe

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Very informative in managing HR function while at the same time meeting

organizational goals. Getting a win win situation. Would like to get more
information on Performance Contracting and management via email whenever
there’s anything new.
Regards
205. irankunda Espérance

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Thank you very much , it was difficult for me to understand the different method of
appraisal , it is well explained , I really appreciate. Be blessed.
206. Syed Asim Bukhari

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informative and useful for my project
207. Anonymous
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The work was to useful
208. Anonymous
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very informative
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210. leona luis


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it was easy to understand

keep up the good work
thank you
211. Diana Wai

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very useful
212. David Taylor

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Whatever you do, keep doing it on a regular, informal basis. The once a year or half
yearly methods are too formulaic. If you are not appraising performance at least
monthly you are not doing your job as a manager.
213. Gwebe Israel

March 6, 2018 at 1:58 pm
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Very nice content
214. Anonymous
May 6, 2018 at 12:37 am
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Can u elaborate on the performance appraisal processes plz. A little definition would
be good
215. Anonymous
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Thanks for the easy, correct and precise information.
216. Anonymous
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What are functions of staffing
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218. Kimbowa mark
October 25, 2018 at 2:38 pm Close and accept
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This is so good for me who is planning yo be a human resource manager
219. Vivian ogiridiri

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Very useful
220. Solomon
March 12, 2019 at 5:41 pm
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Simpler way to explain something deep! Please add names so that I can indicate it
on my reference list in my research.
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Performance Appraisal Methods - Human Resources Management

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Performance Appraisal Methods

Definition 2: Formal System, Reasons and Measures of future performance

Meaning of Performance Appraisals

Job Analysis à Performance Standards à Performance Appraisals

Objectives of Performance Appraisals

3. Training and Development

8. Feedback & Grievances

4 Goals of Performance Appraisals

Transfers and Placements

Strengths and Development needs

Administrative Decisions / Uses Salary

Poor Performers identification

Reinforcement of organizational needs

Documentation Validation Research

Performance Appraisal Process

2. Job expectations establishment

3. Design an appraisal program

4. Appraise the performance

6. Use data for appropriate purposes

7. Identify opportunities variables

8. Using social processes, physical processes, human and computer assistance

Difference between Traditional and

TECHNIQUES / METHODS OF PERFORMANCE

Past Oriented Methods

Future Oriented Methods

Past Oriented Methods

2. Checklist: Under this method, checklist of statements of traits of employee in the

5. Critical Incidents Method: The approach is focused on certain critical behaviors of

6. Behaviorally Anchored Rating Scales: statements of effective and ineffective

9. Confidential Records: Mostly used by government departments, however its

Future Oriented Methods

1. Management By Objectives: It means management by objectives and the

Establish goals and desired outcomes for each subordinate

Setting performance standards

2. Psychological Appraisals: These appraisals are more directed to assess employees

Advantages – well-conducted assessment center can achieve better forecasts of future

4. 360-Degree Feedback: It is a technique which is systematic collection of performance

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