Performance appraisal system

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I. Contents of getting performance appraisal system

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A performance appraisal system helps a business to determine potential managerial candidates,
adjust the pay rate for each position based on performance and analyze employee performance to
determine if further training is needed or if dismissal is appropriate. It takes time to develop a
performance appraisal system that your company can use, but it is important as a human
resources professional to learn how to administer an effective employee evaluation process.
Step 1
Announce when the performance appraisal process will begin at least 30 days in advance.
Encourage employees to make written notes of the questions they have for their managers and
the points they want their managers to consider about their performance throughout the year.
Step 2
Distribute a self-evaluation to employees at the 30-day point. Tell employees that they need to
complete their self-evaluations and give them to their managers at least 14 days prior to their
evaluation meeting. Encourage employees to make a copy of their self-evaluation and bring it
with them to their manager meeting.
Step 3
Require all managers to have their written evaluations, including the analysis of the employee
self-evaluation, completed seven days prior to the employee evaluation meeting.
Step 4

Review each manager's completed employee evaluation to ensure that it does not violate any
company policies, or state and federal employment laws. If you find something inappropriate,
schedule a meeting with that manager prior to the employee evaluation to discuss the issue and
make appropriate changes.
Step 5
Analyze the completed appraisal after the managers have their one-on-one meetings with their
employees and determine if the managers' recommendations are appropriate. If a manager has
suggested a pay raise, determine if the raise is within the company budget and if it would apply
to the employee based on the appraisal.

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III. Performance appraisal methods

1. Essay Method
In this method the rater writes down the employee
description in detail within a number of broad categories
like, overall impression of performance, promoteability
of employee, existing capabilities and qualifications of
performing jobs, strengths and weaknesses and training
needs of the employee. Advantage It is extremely
useful in filing information gaps about the employees
that often occur in a better-structured checklist.
Disadvantages It its highly dependent upon the writing
skills of rater and most of them are not good writers.
They may get confused success depends on the memory
power of raters.

2. Behaviorally Anchored Rating Scales

statements of effective and ineffective behaviors

determine the points. They are said to be
behaviorally anchored. The rater is supposed to
say, which behavior describes the employee
performance. Advantages helps overcome rating
errors. Disadvantages Suffers from distortions
inherent in most rating techniques.

3. Rating Scale
Rating scales consists of several numerical scales
representing job related performance criterions such as
dependability, initiative, output, attendance, attitude etc.
Each scales ranges from excellent to poor. The total
numerical scores are computed and final conclusions are
derived. Advantages Adaptability, easy to use, low cost,
every type of job can be evaluated, large number of
employees covered, no formal training required.
Disadvantages Raters biases

4. Checklist method
Under this method, checklist of statements of traits of
employee in the form of Yes or No based questions is
prepared. Here the rater only does the reporting or
checking and HR department does the actual evaluation.
Advantages economy, ease of administration, limited
training required, standardization. Disadvantages Raters
biases, use of improper weighs by HR, does not allow
rater to give relative ratings

5.Ranking Method
The ranking system requires the rater to rank his
subordinates on overall performance. This consists in
simply putting a man in a rank order. Under this method,
the ranking of an employee in a work group is done
against that of another employee. The relative position of
each employee is tested in terms of his numerical rank. It
may also be done by ranking a person on his job
performance against another member of the competitive
group.
Advantages of Ranking Method
Employees are ranked according to their
performance levels.
It is easier to rank the best and the worst
employee.
Limitations of Ranking Method
The whole man is compared with another
whole man in this method. In practice, it is very difficult
to compare individuals possessing various individual
traits.
This method speaks only of the position where an
employee stands in his group. It does not test anything
about how much better or how much worse an employee
is when compared to another employee.
When a large number of employees are working,
ranking of individuals become a difficult issue.
There is no systematic procedure for ranking
individuals in the organization. The ranking system does
not eliminate the possibility of snap judgements.

6. Critical Incidents Method

The approach is focused on certain critical behaviors of

employee that makes all the difference in the
performance. Supervisors as and when they occur record
such incidents. Advantages Evaluations are based on
actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases,
chances of subordinate improvement are high.
Disadvantages Negative incidents can be prioritized,
forgetting incidents, overly close supervision; feedback
may be too much and may appear to be punishment.

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