Dear Vijay,
Greetings!
Performance Appraisal:
Performance appraisal, also known as employee appraisal, is a method by which the performance of an employee is evaluated (generally in terms of quality, quantity, cost, and time).
Traditional Methods of Performance Appraisal
1. ESSAY APPRAISAL METHOD
This traditional form of appraisal, also known as the "Free Form method," involves a description of the performance of an employee by his superior. The description is an evaluation of the performance of any individual based on the facts and often includes examples and evidence to support the information. A major drawback of the method is the inseparability of the bias of the evaluator.
2. STRAIGHT RANKING METHOD
This is one of the oldest and simplest techniques of performance appraisal. In this method, the appraiser ranks the employees from the best to the poorest based on their overall performance. It is quite useful for a comparative evaluation.
3. PAIRED COMPARISON
A 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.
4. CRITICAL INCIDENTS METHODS
In this method of performance appraisal, the evaluator rates the employee based on critical events and how the employee behaved during those incidents. It includes both negative and positive points. The drawback of this method is that the supervisor has to note down the critical incidents and the employee's behavior as and when they occur.
5. FIELD REVIEW
In this method, a senior member of the HR department or a training officer discusses and interviews the supervisors to evaluate and rate their respective subordinates. A major drawback of this method is that it is a very time-consuming method. However, this method helps to reduce the superiors' personal bias.
6. CHECKLIST METHOD
The rater is given a checklist of the descriptions of the behavior of the employees on the job. The checklist contains a list of statements on the basis of which the rater describes the on-the-job performance of the employees.
7. GRAPHIC RATING SCALE
In this method, an employee's quality and quantity of work are assessed on a graphic scale indicating different degrees of a particular trait. The factors taken into consideration include both personal characteristics and characteristics related to the on-the-job performance of the employees. For example, a trait like Job Knowledge may be judged on the range of average, above average, outstanding, or unsatisfactory.
8. FORCED DISTRIBUTION
To eliminate the element of bias from the rater's ratings, the evaluator is asked to distribute the employees into fixed categories of ratings like on a normal distribution curve. The rater chooses the appropriate fit for the categories at his own discretion.
BEHAVIORALLY ANCHORED RATING SCALES
Behaviorally Anchored Rating Scales (BARS) is a relatively new technique that combines the graphic rating scale and critical incidents method. It consists of predetermined critical areas of job performance or sets of behavioral statements describing important job performance qualities as good or bad (for example, qualities like interpersonal relationships, adaptability, reliability, job knowledge, etc.). These statements are developed from critical incidents.
In this method, an employee's actual job behavior is judged against the desired behavior by recording and comparing the behavior with BARS. Developing and practicing BARS requires expert knowledge.
HUMAN RESOURCE ACCOUNTING METHOD
Human resources are valuable assets for every organization. The human resource accounting method tries to find the relative worth of these assets in terms of money. In this method, the performance of the employees is judged in terms of cost and contribution. The cost of employees includes 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.