PERFORMANCE APPRAISAL METHODS

METHODS OF PERFORMANCE APPRASIAL

Traditional Method-

·        Balanced Scorecard: A Balanced Scorecard defines what management means by "performance" and measures whether management is achieving desired results. The Balanced Scorecard translates Mission and Vision Statements into a comprehensive set of objectives and performance measures that can be quantified and appraised.

·        Critical incident method: The critical incident method for performance appraisal is a method in which the manager writes down positive and negative performance behavior of employees throughout the performance period.

·        Weighted checklist method: This method describe a performance appraisal method where rater familiarize with the jobs being evaluated, prepares a large list of descriptive statements about effective and ineffective behavior on jobs.

·        Paired comparison analysis: Paired comparison analysis is a good way of weighing up the relative importance of options. A range of plausible options is listed. Each option is compared against each of the other options. The results are tallied and the option with the highest score is the preferred option.

·        Graphic rating scales: The Rating Scale is a form on which the manager simply checks off the employee’s level of performance. This is the oldest and most widely used method for performance appraisal.

·        Essay Evaluation method: This method asks managers/ supervisors to describe strengths and weaknesses of an employee’s behavior. Essay evaluation is a non-quantitative technique. This method is usually used with the graphic rating scale method.

·        Performance ranking method: Ranking is a performance appraisal method that is used to evaluate employee performance from best to worst. Manager will compare an employee to another employee, rather than comparing each one to a standard measurement

·        Forced ranking (forced distribution): Forced ranking is a method of performance appraisal to rank employee but in order of forced distribution. For example, the distribution requested with 10 or 20 percent in the top category, 70 or 80 percent in the middle, and 10 percent in the bottom.

 Modern Method-

·      Behaviorally anchored rating scales: This method used to describe a performance rating that focused on specific behaviors or sets indicators defining effective or ineffective performance. 23 It is a combination of the rating scale and critical incident techniques of employee performance evaluation.

·         Management By Objectives (MBO) method: MBO is a process in which managers/ employers set objectives for the employee, periodically evaluate the performance, and reward according to the result. MBO focuses attention on what must be accomplished (goals) rather than how it is to be accomplished (methods).

·      360 degree performance appraisal: 360 Degree Feedback is a system or process in which employees receive confidential, anonymous feedback from the people who work around them supervisors, peers and subordinates.

·       Human Resource Accounting Method: Human resources are valuable assets for every organization. Human resource accounting method tries to find the relative worth of these assets in the terms of money. In this method the Performance appraisal of the employees is judged in terms of cost and contribution of the employees. The cost of employees include all the expenses incurred on them like their compensation, recruitment and selection costs, induction and training costs etc. whereas their contribution includes the total value added (in monetary terms). The difference between the cost and the contribution will be the performance of the employees. Ideally, the contribution of the employees should be greater than the cost incurred on them.

1.1.     

                                                                           Factors Distorting Performance Appraisal

Performance appraisal is done by the managers or supervisors. They do this job under different situation, at different place and different state of mind and at different time. Their judgments are likely to be affected. They are human being. Their psychology, liking, disliking, preference, judgment etc. are likely to affect the appraisal of employees. There are chances that errors are likely to take place. But efforts should be there so that these can be minimized. Proper care should be taken to give fair and impartial assessment. Generally the following errors are likely to take place in assessment:

 (a) General Bias Errors: It depends upon the attitude of the assessor. Some may be very strict and other may be very liberal during the assessment work. They may not consider the actual performance of the employees for assessment work. It affects everyone in general.

(b) Halo Effect: During assessment when the assessor considers or gives importance to one criterion of the assessment and ignoring the other factor, the error is likely to take place. This is called halo effect. It gives wrong assessment of the employees.

(c) Relation Rating Error: When one task is related to another task then the assessor gives importance to that logical relationship more. It creates the error in the assessment.

(d) Contrast and Similarity Errors: The assessors assess the other employees based on their own assessment. The assessment may be similar or contrast to assessment of the employees.

 (e) Central Tendency Errors: When the evaluator does not take the extreme steps for evaluation, he avoids the extreme two ends. He follows the central path and gives and average rating for the performance. The range of assessment is very narrow. It dissatisfies the excellent performers but protect the poor performers also.

(f) Proximity Errors: When raters assess one high side then he assesses others also high side this is called proximity error. He wants to justice with everyone but in the beginning he has done the assessment on wrong side and that affects the whole assessment.

(g) Rating Inflation: When supervisor’s rating goes very high without any reason is called inflated rating. The supervisor should make that the ratings are on fact basis and not based on emotions or feeling of individuals.