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It

means systematic evaluation of the

personality and performance of each
employee by his supervisor or some
other person trained in the techniques of
merit rating.
It is a systematic and an objective way of
judging the relative worth or ability of an
employee in performing his task.

To

identify the employees for salary increases,

promotion, transfer and lay off or termination
of services.
Determining the training needs for further
improvement in performance.
Motivating employees by indicating their
performance levels.
Establishing a basis for research and reference
for personnel decisions in future.
Ratings can be
used to evaluate the
effectiveness of training programmes.

Performance appraisal

It is concerned with the differences

among the employees in terms of their
performance.
It considers the abilities and
performance of individuals.
The purpose is to take the
administrative decisions like increase in
pay ,transfer, promotion etc. It also
serves as a guideline for the
management to consider the type of
training which should be imparted to
the employees.
It rates the man and not the job as it is
concerned with assessing of the abilities
of the individuals.
It is used as a basis of personnel
policies as regards to transfer and
promotion

Job evaluation

It is the analysis of the various jobs to

know the demands which the normal
performance of particular jobs make on
average employees.
It considers the requirements of various
jobs in terms of job descriptions and job
specification.
The purpose is to determine the worth
of the job on the basis of demands
made by a particular job on the average
worker. This facilitates fixation of
wages for various jobs.
It analyses the jobs to determine their
relative worth and fix their wage levels
It is used to shape the wage policy of
the organization.

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SAMPLE PERFORMANCE APPRAISAL FORM

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If

the factors included in the assessment are

irrelevant ,the result of merit rating will not be
accurate.
Supervisors often do not have critical ability in
assessing the staff. They can be guided by their
personal emotions and likes.
Some of the factors are highly subjective like
initiative and personality of the employees, so
the actual rating may not be on scientific lines.

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Provides data
for evolving
development
plans for
individuals

Helps to achieve organization's

task through guided efforts of
individuals

Performance appraisal
system

Enables
classification of
expectations
between
superiors and
subordinates

Performance appraisal

Provides inputs
for decisions on
transfers,
promotions.
Provides data in
terms of needs
aspirations of
individuals to
review company
policies

Traditional
methods
Unstructured appraisal
Employee ranking
Forced distribution
Graphic rating scales
Check lists
Critical incidents
Field review

Modern methods

Management by
objectives
Behaviorally anchored
rating scales

PURPOSE OF PERFORMANCE APPRAISAL

The

appraiser is required to write down his

impression about the person being appraised
in an unstructured way.
This system is highly subjective and has got
its merit in its simplicity and is used in small
firms.

Ranking

is a process in which the employees are

ranked according to their job performance. All the
workers are judged on the same factors. But this
method does not indicate the degree of difference
between the first and the second man and so on.
Paired comparison is an improvement over simple
ranking. In this every employee is compared with
every other employee to determine who is the
better worker.

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Scales

are established for a number of specific

factors and qualities.
General definitions appear at points along the
scale.
The selection of the factors to be measured on
the graphic scale is an important point under
this system.

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Sometimes , the appraisers fail to evaluate the poor, average or

excellent employees clearly. This system is devised to force the
appraiser to fit the employees being appraised into predetermined
ranges of scale.
In this system, the appraiser is asked to distribute the employees
into these categories in such a way that about 10% of the men are
in the group outstanding,20% in good,40% average, 20% below
average and 10%poor.
The objective is to spread out ratings in the form of a normal
distribution which is open to criticism.

It

means a significant act by an employee

exceeding or failing any of the requirements of his
job. It represents an exceptional behavior of an
employee at work.
This method requires every supervisor to record all
such significant incidents in each employee
behavior which indicate effective or successful
action and those which indicate ineffective or poor
behavior.

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Under

this method, the supervisors are interviewed

by an expert from the personnel department. The
expert questions the supervisor to obtain all the
relevant information on each employee .
The interviewer questions the supervisor about the
requirements of each job and about the
performance of each man in his job.
The questions are asked and answered verbally.

They

are too subjective in nature because all of

them are based on personal judgment of the rater.
The appraiser may not be able to judge the
competence of the employees because of lack of
training.
Because of this, the performance ratings in
traditional methods are subjected to a number of
errors:
Halo error, central tendency, leniency or strictness,
behavior bias,etc.

Halo

error: when the rater allows one aspect of a

mans character to influence his entire evaluation.
Central Tendency: when the rater has less
information about the subordinate, he may neither
condemn nor praise him. so he may rate him
'average.
Leniency or strictness
biasness

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Management

by objectives: it is a goal setting

approach to performance appraisal.
Traditional methods involved ratings of traits and
personal qualities that were not reliable.
Under this approach, an employee is not appraised
by his recognizable traits but by his performance
with respect to the agreed goals or objectives.

MBO PROCESS

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This

approach is possible only when the goal

setting is possible by the subordinates .
It involves considerable time ,thought and contact
between the superior and the subordinate.
This
approach
mainly
emphasizes
counselling,training and development. Critical
evaluation is not done.
This approach is appropriate for the appraisal of
executives and supervisory personnel who can
understand it in a better way.

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They

are designed to identify the critical areas of

performance for a job and to describe the more
effective and less effective job behavior for getting
results.
In this, specific observable job behaviors of an
employee are rated and then these are compared
with a behaviorally anchored rating scale .
Thus the supervisor is in a position to compare the
employee s actual behavior with the behavior that
has been previously determined to be more or less
effective.

The procedure for BARS is usually five

stepped.
1. Generate Critical Incidents
2. Develop Performance Dimensions
3. Reallocate Incidents
4. Scale of Incidents
5. Develop Final Instrument

How appraisals can be made

successful..

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