METHODS OF

PERFORMANCE Module 4
Prof Teena Bharti

APPRAISAL
INTRODUCTION
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 needs of the organization or
an employee.
Broadly all methods of appraisals can be divided into two different
categories.
1. Past Oriented Methods
2. 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.
CONTD…
4. 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.
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. Graphic Rating Scale Method: The graphic rating scale is one of the most popular and simplest
techniques for appraising performance. It is also known as linear rating scale. In this method, the printed
appraisal form is used to appraise each employee. The form lists traits (such as quality and reliability) and
a range of job performance characteristics (from unsatisfactory to outstanding) for each trait. The rating is
done on the basis of points on the continuum. The common practice is to follow five points scale.
CONTD…
7. Essay Method: Essay method is the simplest one among various appraisal methods available. In
this method, the rater writes a narrative description on an employee’s strengths, weaknesses, past
performance, potential and suggestions for improvement. Its positive point is that it is simple in use.
It does not require complex formats and extensive/specific training to complete it.
8. Field Review Method: When there is a reason to suspect rater’s biasedness or his or her rating
appears to be quite higher than others, these are neutralised with the help of a review process. The
review process is usually conducted by the personnel officer in the HR department.
9. Confidential Records/Reports: 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.
FUTURE ORIENTED
METHODS/MODERN
METHODS:
1. Management by Objectives (MBO): Most of the traditional methods of performance
appraisal are subject to the antagonistic judgments of the raters. It was to overcome this
problem; Peter F. Drucker propounded a new concept, namely, management by objectives
(MBO) way back in 1954 in his book.
The Practice of management. The concept of MBO as was conceived by Drucker, can be
described as a “process whereby the superior and subordinate managers of an organization
jointly identify its common goals, define each individual’s major areas of responsibility in
terms of results expected of him and use these measures as guides for operating the unit and
assessing the contribution of each its members”.
An MBO programme consists of four main steps: goal setting, performance standard, compari­
son, and periodic review. 
CONTD…
Behaviourally Anchored Rating Scales (BARS):
BARS are descriptions of various degrees of behaviour with regard to a specific performance
dimension.
It combines the benefits of narratives, critical incidents, and quan­tified ratings by anchoring a
quantified scale with specific behavioural examples of good or poor performance. The proponents of
BARS claim that it offers better and more equitable appraisals than do the other techniques of
performance appraisal we discussed so far.
1. Generating Critical Incidents:
2. Developing Performance Dimensions:
3. Reallocating Incidents:Various critical incidents are reallocated dimensions by another group of
people who also know the job in question. 
4. Scaling Incidents:The same second group as in step 3 rates the behaviour described in each incident
in terms of effectiveness or ineffectiveness on the appropriate dimension by using seven to nine points
scale.
5. Developing Final BARS Instrument:
A subset of the incidents (usually six or seven per cluster) is used as a behavioural anchor for the final
performance dimensions. 
CONTD…
360 – Degree Appraisal:
Under 360 – degree appraisal, performance information such as employee’s skills,
abilities and behaviours, is collected “all around” an employee, i.e., from his/her
supervisors, subordinates, peers and even customers and clients.
In other worlds, in 360-degree feedback appraisal system, an employee is appraised
by his supervisor, subordinates, peers, and customers with whom he interacts in the
course of his job performance. All these appraisers provide information or feedback
on an employee by completing survey questionnaires designed for this purpose.
All information so gathered is then compiled through the computerized system to
prepare individualized reports. These reports are presented to me employees being
rated. They then meet me appraiser—be it one’s superior, subordinates or peers—and
share the information they feel as pertinent and useful for developing a self-
improvement plan.
Psychological Appraisals
Psychological appraisals come in handy to determine the hidden potential of employees. This
method focuses on analyzing an employee’s future performance rather than their past work.
Qualified psychologists conduct a variety of tests (in-depth interviews, psychological tests,
discussions, and more) to identify an employee’s emotional, intellectual, and other related
traits. However, it is a rather slow and complex process and the quality of results is highly
dependent on the psychologist who administers the procedure.
Human-Resource (Cost) Accounting Method
Human resource (cost) accounting method analyses an employee’s performance through the
monetary benefits he/she yields to the company. It is obtained by comparing the cost of retaining
an employee (cost to company) and the monetary benefits (contributions) an organization has
ascertained from that specific employee.
When an employee’s performance is evaluated based on cost accounting methods, factors like
unit-wise average service value, quality, overhead cost, interpersonal relationships, and more are
taken into account. Its high-dependency on the cost and benefit analysis and the memory power
of the reviewer is the drawback of human resources accounting method.
 720 DEGREE OF APPRAISAL
According to the International Journal of BENEFITS OF 720 METHOD
•More holistic and comprehensive feedback leads to a better
Multidisciplinary Research, a 720-degree
understanding of performance. Hearing from customers,
performance appraisal is when an employee “is teammates, managers, and other stakeholders can help identify
appraised from 5 dimensions and feedback or any performance gaps or places of improvement.
the appraisal meeting is conducted twice (pre •Multi-dimensional feedback helps employees better
and post feedback) to ensure the efficient cooperate and communicate more consistently.
•Can greatly reduce appraisal barriers such as prejudice,
performance of the employee. Including the pre bias, and discrimination. These are much more common when
and the post feedback, that plays a vital role, the employee reviews are conducted as feedback between
720-degree performance appraisal has seven employers and managers only.
phases.” The logic behind the name is that if 360 •Greater transparency – such as regular feedback and
consistent communication with other feedback channels, such
degrees is a complete review that encompasses a
as coworkers – leads to more engaged employees who feel that
holistic view of performance, then 720 degrees they are valued, respected, and that their contributions and
is even more thorough, comprehensive and success matter to the overall future of the organization. Better
beneficial. employee relationships are built on trust, communication, and
feedback and ultimately lead to better employee retention,
which reduces both costs and lost productivity for companies.
THANK YOU