Presentation of HRM

1. Methods Of Performance Appraisal

• Traditional Method
• Modern Method

2. Contemporary Issues of Performance

Appraisal
 Performance Appraisal
 It is deciding the value of the work done
by an individual .
It is a systematic and objective way of
evaluating ones performance.
It is done to know and enhance work
quality,output and efficiency.
It is done through two methods .They are
traditional method and modern method.
A. Traditional Method
There are the old methods of performance
appraisal based on the personal qualities like
knowledge , capacity , judgement , initiative,
attitude , loyalty, leadership etc. Traditional
methods of performance appraisal are as follows:
1. Essay appraisal method
2. Checklist method
3. Graphic rating scale
4. Critical incident method
5. Paired comparison method
6. Forced choice method
7. Forced Distribution Method
1. Essay Appraisal Method
This method is also known as “Free From
Method”. It is a non-quantitative and open ended
technique and provides a good deal of information
about employees . This method involves superiors
of employees write description about the
performance of an employee. Appraiser evaluates
the performance of an employee as well as his/her
strength and weakness . The supervisor evaluates
the following related to employee:
 Attitudes and perceptions
 Planning , organizing and controlling ability
 Job knowledge , skills and potential
 Advantages
Oldest , simple and easy method
Provides variety of information about
employees

 Disadvantages
• It takes long time to write essay .so, it is
costly method.
• If supervisor is busy, he/she may write essay
in pressure and may not consider the actual
performance
2. Checklist Method
A checklist represents in its simplest form a set
of objectives or descriptive statement about
employee and his behaviour .In checklist
method the supervisor does not actually
evaluate empolyee’s performance . A series of
questions are presented concerning on
employees behaviour .The rater then checks to
indicate if the answer to a question about an
employee is positive or negative in this
method . It requires proper planning.
Figure of checklist method
Advantages
1. It brings uniformity
in evaluation
2. It is not costly to
install and use
• Disadvantages
1. This method suffers from bias on the part of
rater because he/she can distinguish
positive and negative questions.
2. A separate checklist must be developed for
different classes of jobs . This process is
expensive and time consuming.
3.Graphic Rating scales
It is one of the oldest and commonly used
methods of performance appraisal. Under this
approach the employees are evaluated on the
basis of various job performance criteria
which are given below:
a. Attitudes , knowledge of work , managerial
skills, teamwork , honesty , regularity ,
accountability, interpersonal relationship.
b. These traits are allotted with numerical
scale to tabulate the scores gained by
employee in performance assessment
relating to his/her job.
Graphic rating scales cntd
c. This method is very popular because it is
simple and doesn’t require any writing ability.
This method is easy to use and understand ,
comparison among pairs is possible. This is
also necessary for decision on salary
increases and promotion.
4. Critical Incident Method
This technique is a set of procedures
designed to describe human behaviour by
collecting description of events having special
significance . This method is also referred to
as work sampling .The manager prepares lists
of statements of very effective and ineffective
behaviour of employee . These critical
incidents or events represent the outstanding
or poor behaviour of employee on the job.
The manager maintains logs on each
employee whereby he periodically records
critical incidents of the workers behaviour.
Example:
Suggested a new idea ,helped the co-worker
by analyzing the critical incident ,the rater
rates the employee about his/het poor or
excellent performance.
5. Paired Comparison Method
It is better technique of comparison than the
straight ranking method. This method
compares each employee with all others in
the group one at a time. After all the
comparisons ,on the basis of the overall
comparisons the employees are given the
final rankings .
It is a method of comparing employee and job
with another one on the basis of skill sets,
time required to execute tasks , knowkedge
etc
Paired Comparison
Example:
If there are five employees from A to E .A will
be compared individually to B,C and similarly
to all the remaining employees. If A is better
than B, A will be marked ‘t’ against his/her
name and if he/she is not as god as C ,A will
be marked ‘-’.
6. Forced Choice Method
It’s objective is to minimize the rater bias and
weakness. The rating is designed specially for
each general category of the jobs . In this method
rater is forced to answer about the employee from
the readymade statements given in two or more
blocks . Statements will have two extremes i.e
equally favourable or equally unfavourable and
normally they are weighted.
Examples: Organized workers - unorganized
workers
Hold negative attitude-Remain positive every
time
7. Forced Distribution Method
This method compels the rater to distribute
the employees on all point on rating scale (1-
5).This method takes normal distribution
curve as base and assumes that employee
performance levels conforms to bell shape
curve. 10% excellent,20%good ,40%
average,20% below average and 10% poor. It
reduces raters biasness and leniency effect.
B. Modern Method
There is an improvement over the traditional
methods. Modern methods are developed to
remove the limitation of the old methods.
Different modern methods of performance
appraisal are given below:
1. Assessment Centres
2. Behaviourally Anchored Rating Scale
3. Management by Objectives
4. 360 degree Performance appraisal
1. Assessment Centre
An assessment centre is a central location where
the managers may come together to participate in
job related exercises who are evaluated by the
trained observers . Centre determines the training
and development needs of employees and
measures the potential of the employees for the
different positions in the organization. It evaluates
and judge the competencies such as
communication and organizing capabilities etc.
This method reduces biasness and provide better
approach towards identifying candidates for
promotion and transfer . it is time consuming and
costly method.
2. Behaviorally Anchored Rating Scale
This is relatively a new method which is
designed to identify the critical areas of the
jobs rating scale and critical incident
method .BARS were introduced by Smith and
Kendall in 1963.BARS may consists of set of
five to ten vertical scales . Each scale
represents a major performance dimension of
the job and is usually anchored by five or
more critical incidents that reflect highly
effective to highly ineffective observable job
behaviors .
It is very specific to a particular job as we are
BARS
Advantages:
It is based behavior . The ultimate goal of
employee appraisal is to improve on
performance.
It is completely individualized.

Disadvantage
It is time consuming and expensive.
3. Management By Objectives (MBO)
The concept of MBO was first given by Peter
Drucker in 1954.It can be defined as a
process whereby the employees and the
superiors come together to identify common
goal to be achieved ,the standard to be taken
as the criteria for the measurement of their
performance . The principle behind MBO is
to create empowered employees who have
clarity of roles and responsibilities from them
,understand the objectives to be achieved and
thus helps in acheivement of organizational
as well as personal goals.
4. 360 degree Performance Appraisal
360 degree feeback also known as multi-rater
feedback is the most comprehensive appraisal
where the feedback about the emloyee’s
performance comes from all the sources that
come in contact with employee on his job.This
process involves collecting perceptions about
a person’s behaviour. It involves collection of
the information from fellow members of
project teams,internal and external
customers.Each employee has an opportunity
to get performance feedback as well as their
strength and weakness.
Four stages of 360 degree performance appraisal:
Self appraisal- Employee can look into his/
her own strength and weakness.
Superiors appraisal- Employee’s
responsibilities and actual performance is
rated by boss.
Subordinates appraisal-People who work
under you rates about your communication
and leadership skills.
Peers appraisal-By colleagues about
performance .
360 degree performance appraisal
 Contemporary issues of Performance Appraisal
Employee’s performance appraisal is a subject of great
interest in any organization .Employees play a vital role in
determining It’s survival ,as employee is perceived as an
valuable asset to an organization. During the performance
appraisal of the employee by the appraiser , there can be
various issues and some of the contemporary issues are
explained below:
1. Interpersonal relation(bias)
2. Leniency and severity errors
3. Halo effect
4. Similarity error
5. Recency Vs Primary effect
6. Central tendency
7. Attribution error
8. Unclear standards
Contemporary issues of performance appraisal cntd…

1. Interpersonal relations (bias):

It is related with how a supervisor feels about each of the
individuals woking for him/her ( whether he/she personally
likes or dislikes him/her). It has a tremendous effect upon
his retings of their performance.

2. Leniency and severity errors:

Each evaluator has his own value system which acts as a
standard against which appraisals are made . If the
evaluators are positively lenient (generous/happy) in their
appraisal , an individual performance is over rated and if
they are negatively lenient ,an individual performance is
under rated.
3. Halo effect:
It is also known as the horns effect.It is a
situation where a evaluator let his positive or
negative feelings towards an employee to
influence the evaluaion easily.It is like the
first impression is the last impression.Halo
effect is one of the most frequent errors in
performance evaluatoin.It creates biasness
because a rater’s overall positive/negative
impressionof candidate leads to rate him
throughout all the rating dimensions.
4. Similarity Error
Similarity error is a negative tendency of the
evaluator at the time of interview assessment
and performance appraisal . Here in ,the
evaluator’s rating is biased towards the
employee whom he/she perceives to be
similar to himself or herself personally or
professionally . For example the evaluator
who perceives himself as extrovert may
evaluate others by looking for extrovertness .
5. Recency Vs Primary effect:
This is majorly about carrying out an
appraisal for a short period before it takes
place. When appraisal period comes they
become very active .Tasks are done seriously
and at faster speed. The opposite of recency
is primary effect .In it , the initial impression
influences the decision on year end appraisal.
But in reality the employee may not have
been able to keep up the initial impression.
5 cntd…
For instance ,now days we are having virtual
class .A student Ram was very
punctual,regular and obedient in physical
class but, he has been absent for 4 days in
virtual class and if the teacher evaluates the
students as per the attendance in online
class,then Ram is rated under average. The
teacher ignores the whole year performance
and evaluate recent activities.
6. Central Tendency

It is a tendency for a rater to place most

items in the middle of a rating scale . For
example on a 10 point scale ,a manager might
place most of his employees in the middle of
(4-7) with a few people getting high (8-10) or
low (1-3)rated performance.
7. Attribution Error
Attributions error are based on subjective
conclusions . In a performance review for
example an attribution error could happen when
an employee gives a negative answer to a
question and the appraiser assumes that they
have a negative attitude towards their work.
8. Unclear Standards

Unclear standards refers to ambiguous

degree of traits that can cause an unfair
appraisal. Unclear standards undermine
performance and outcomes within a team and
also negatively affects
relationships ,teamwork and engagement.
Challenges of Performance Appraisal
1. Perception of employees
2. Culture Change
3. Lack of Proper reward system
4. Lack of universal acceptability
1. Perception of Employees:

Performance appraisal might not be readily

accepted by everybody especially those who
might feel exposed negatively in terms of
poor performances. Apparently some
employees view the system as a way of trying
to expose them.
2. Culture Change
It is asserted that culture change among the
employees/employer is crucial for any
meaningful gains to be realized from the
management system thus, they need to
embrace the culture of hard work ,a
competitive culture , attribute such as
integrity and thriftness in the use of
resources.
 Thank you everyone 
Prepared by : Samikshya Adhikari
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