Notes On Methods Of Performance Appraisal:

       In any organisation, there is some sort of evaluation of the employees and sub- ordinates. Appraisal is the evaluation of worth, quality and merit. In the organisation context, performance appraisal is a systematic evaluation of personnel by the superiors.

       Systematic performance is appraised by many companies in the west and few in our countries as a means of helping supervisors to evaluate the work of each employee (performance appraisal is also described as "merit rating" in which one individual is ranked as better or worse when compared to others.

Methods of Performance Appraisal:

       Every organisation has their own method of performance appraisal. But whatever system may be adopted, performance appraisal has two basis:

  1. I. Appraisal of Employee according to traits.
  2. II. Appraisal by result or objectives.
  3. III. Appraisal of Employees According to Traits

       The traits approach of evaluation is quite old. The various methods used under this system of approach are:

1. Ranking:

       Ranking is the oldest and simplest method of appraisal in which a person is ranked on the basis of certain traits or characteristics. This is just like preparing ranks of examine in an examination.

       The method is very useful when the number of person to be ranked is small

2. Paired Comparison:

       This method slightly differs from ranking method. In this method, each person is compared with other persons taking only two at a time. The rater would check, tick mark against the person whom he consider the better of the two and the final ranking is determined by the no of times that person is adjudged better than others.

3. Training:

       In this method, certain categories of abilities are defined well in advance, and persons are put in particular categories depending upon their grades. Such categories may be like outstanding, good, average, poor etc. or in terms of letters like A,B,C,D, etc with A indicating the best and D indicating the worst.

4. Forced Choice Method:

       This method contains a series of group of statements. Both the statements may be positive or negative. Though both the statement describes the character of employees, the later is forced to choose or tick only one. E.g.; the rater may be given the following two statements:

  1. The employee is hard working;
  2. The employee is co- operative with the fellow workers.

       Both the statements are positive, the rating in this case is done on the basis of all sets of statements.

5. Critical Incidents:

       In this method, only critical incidents and behavior associated with these incidents are considered for evaluation. The basic idea is apprise the people who can do well in critical situation.

       This method is very useful for encouraging the potential of employees who can be useful in critical situation.

Appraisal by Result or objectives:

       One of the most promising tools of appraisal of employees, particularly at Managerial level, is the system of evaluation against achievement of objectives.

       This method uses the contribution of a manager as the basis of performance appraisal. When contributions can be measured quantitatively not much problem arise in evaluation. However, problem arises when contributions cannot be measured precisely.

  1. It emphasizes on work achievement alone.
  2. The method emphasizes on present purpose
  3. It is difficult to appraise the result of those managers whose contributions cannot be measured precisely.

       It may be noted that both the methods of performance appraisal have their limitations and strengths. Therefore to overcome these weaknesses, many organisations have adopted a combination of both to secure optimum advantages.

Benefits or Importance of Performance Appraisal:

       Performance appraisal is expected to answer many questions relating to management of people in the organisation. A study of appraisal practice in Indian and American company suggests that performance appraisal. It used in determining wage increase, promotion, transfers training and development and in informing an employee where he stands in the order.

1. Salary Increase:

       Performance play role in making decision about salary increase. Normally, salary increase of an employee depends on how he is performing his job. In small organisation, performance appraisal can be an informal process. However in large organisation formal performance appraisal has to be undertaken. This may disclose how well an employee is performing and how much he should be compensated by way of salary increase.

2. Promotion:

       Performance appraisal plays an important role where promotion is based on merit. Performance appraisal discloses how an employee is working on his present job and what are his strength and weakness. In the light of this, it can be decided whether an employee should be promoted to higher post or not. Similarly, performance appraisal can be used for transfer, demotion and discharge of an employee.

3. Training and Development:

       Performance appraisal tries to identify the strength and weakness of an employee on his present job. These informations can be used for devising training and development programme.

4. Feed Back:

       Performance appraisal provides feed back to employees about their performance. It tells them where they stand. A worker works better when he gets feedbacks about his performance and may try to overcome his deficiencies which will lead to better performance.

5. Pressure on Employees:

       Performance appraisal puts pressure on employees for better performance. If the employees know that they are being appraised by their superiors and their future largely depends on such appraisal, they tend to have a positive and acceptable behavior. Thus, appraisal can work automatically as control device.