PERFORMANCE APPRAISAL 

 Earlier Performance Appraisal is known by different name as Man To Man Rating, Rating Scores, Merit Rating. 

Edwin B According to Flippo.

"Performance appraisal is a systematic, periodic and so far as humanly possible, an impartial rating of an employee's excellence in matters pertaining to his present job and to his potentialities for a better job."

 Performance appraisal is the systematic, periodic and impartial rating of an employee excellence in matters pertaining to his present job& his potential for a better job. 

 Performance appraisal and merit rating used as synonymously but performance appraisal is a wider term than merit rating. 

Merit rating- To decide salary increment.

  Performance Appraisal-  

Focus on the performance & future potential of employee. 

 Features Of Performance Appraisal- 

1) It is a series of steps. 

2) It is a systematic examination.

 3) It is a scientific & objective study 

4) It is an ongoing or continuous process.

 5) It secure information for making correct decisions.

 6) It aims at both Judgementals & development efforts. 

 Process Of Performance Appraisal- 

1) Establishing performance standards 

2) Communicating the standards 

3) Measuring performance 

4) Comparing the actual with the standard performance

 5) Discussing the appraisal

6)Taking corrective actions 


  Problems In Performance Appraisal

1) Errors in rating- 

A) Hallo Effect- It is the tendency to rate an employee consistently high or low on the basis of overall impression. 

B) Stereotyping- This implies forming a mental picture of a person on the basis of his age, sex, caste or religion.

C) Central Tendency- It means assigning average ratings to all the employees in order to avoid commitment or involvement.

 D) Constant Error- some evaluators tend to be lenient so performance is overrated (leniency norms) some are strict so performance is underrated ( strictness error)

 E) Personal Bias- performance appraisal depends on rater likes or dislikes.

F)Spill-Over  Effect-This arises when  past performance affects assessment of present performance. Recent behavior or performance of an employee may be used to judge him this is called recency. 

2) Lack of reliability- Reliability implies stability & consistency in the measurement. 

3) Incompetence- Raters may fail to evaluate performance accurately due to lack of knowledge&experience.

4) Negative approach

 5) Multiple objectives 

6) Resistance

7) Lack of knowledge 

 Essentials of an effective performance appraisal system

1)Mutual  trust

2)Clear objectives 

3) Standardization

 4) Training 

5) Job relatedness 

6) Documentation 

7) Feedback & participation

 8) Individual differences 

9) Post appraisal interview, review&appeal. 

METHODS OR TECHNIQUES OF PERFORMANCE APPRAISAL Traditional method 


1) Confidential report. 

2) Free form &essay. 

3) Straight ranking.

 4) Paired Comparison. 

5) Forced distribution.

 6) Graphic rating scales. 

7) Checklist method.

 8) Critical incidence. 

9) Group appraisal.
10) Field review. 

Modern method 

1) Assessment center. 

2) Human resource accounting.

3) BARS (Behaviorally anchored rating  scales.

4) Appraisal through MBO.

5) 360” Degree appraisal. 

 Confidential Report – It is a report prepared by the employee’s immediate superior. It covers the strengths & weakness, achievement & failure of employee. It is descriptive appraisal used for promotions&transfers of employees. As appraisal is based on impression rather that data.

  Free Form Or Essay Method- under this evaluator writes a short essay on the employee’s performance on the basis of overall impression. 

 Straight Ranking Method- The evaluator assigns relative ranks to all the employees in the same work unit doing the same job. Employees are ranked from the basis of overall performance. Oldest &simplest method.

  Paired Comparison Method – modified of form of straight ranking each employee is judged better than the other determines his rank. Comparison is made on the basis of overall performance N (N-1)/2. 

 Forced Distribution Method – The rates is required to distribute his ratings in the form of a normal frequency distribution. The purpose is to eliminate the rater’s bias of central tendency based on the questionable assumption that all groups of employees have the same distribution of good &performance. 

 Graphic Rating Scales- It is a numerical scale indicating different degrees f a particular trait. The rates is given a printed form for each employee which contains several characteristics relating to the personality & performance of employees. The numerical points given to an employee are added up to find out his overall performance a standing in the group.

Two scale-

1) continuous scale (0 to 5) 

2) discrete or discontinuous scale (in the form of square box).

 Checklist Method – A checklist is a list of statements that describe the characteristics & performance of employees on the job. The rater checks to indicate if the behavior of an employee is positive or negative to each statement. The performance of an employee is rated on the basis of number of positive checks. 

There are three methods to check 

1) simple checklist 

2) weighted checklist 

3) forced checklist. 

 Critical Incidence Method – In this method the superior keeps a written record of critical events and how different employees behaved during such events. The rating of an employee depends on his positive/negative behaviors during this event. 

 Group Appraisal Method- under this method a group of evaluators assesses employees. The group determine the standards of performance for the job, measures actual performance of an employee analyze the causes of poor performance and offer suggestions for improvement in future. 

 Field Review Method – In this method a training officer from the human resource department interviews line superiors to evaluate their respective subordinates. The interviewer prepares in advance the questions to be asked.By answering these questions a supervisor gives his opinions about the level of performance of his subordinate, the subordinates work progress, his strengths &weakness. 

 Assessment Center Method- An assessment center is a group of employees drawn from different work units. These employees work together on an assignment similar to the one they would be handling when promoted. Assessment center generally measures interpersonal skills, communicating ability, ability to plan & organize. It help to determine training&development needs of employees.

  Human Resource Accounting Method – under this method a performance is judged in terms of costs, contributions of employees.Cost of human resources consist of expenditure n human resource planning, recruitment, selection, induction, training etc. difference between cost and contributions of employees will reflect the performance of employees.

  BARS (Behaviorally Anchored Rating Scale) –  BARS compare an individual's performance against specific examples of behavior anchored to numerical ratings.

 Performance Appraisal Through MBO (Management By Objectives) –  Both managers and employees should review past performance and pinpoint the problems. The information acquired then should be used to address organizational goals and needs. 

 Steps of MBO-  set organizational objectives> define performance targets> performance review>feedback.

  360’Appraisal-In order to make appraisal more objective, transparent & participative concepts such as Self- Appraisal, Peer- Appraisal, Subordinates

360-degree feedback is a systematic collection and feedback of performance data for employees collected from all his/her peers, supervisors, and even customers.

Appraisal, Superior Appraisal were introduced. It involves evaluation of managers by everyone. Structured questions are used to collect responses about a manger from his bosses, peers, Subordinate.