HUMAN RESOURSE

MANAGEMENT
UNIT IV- PERFORMANCE
APPRAISAL
PRESENTED BY –
1. NUPUR KHANDELWAL CR B
2. SHREYA PURANI CR B
3. KISHITA GUPTA CR B
Performance Appraisal
Meaning
 Performance Appraisal is the systematic evaluation of the performance of
employees and to understand the abilities of a person for further growth and
development. Performance appraisal is generally done in systematic ways
which are as follows:
 The supervisors measure the pay of employees and compare it with targets and
plans.
 The supervisor analyses the factors behind work performances of employees.
 The employers are in position to guide the employees for a better performance
 Objectives of Performance Appraisal
 Performance Appraisal can be done with following objectives in mind:
 To maintain records in order to determine compensation packages, wage structure,
salaries raises, etc.
 To identify the strengths and weaknesses of employees to place right men on right
job.
 To maintain and assess the potential present in a person for further growth and
development
 To provide a feedback to employees regarding their performance and related status.
 It serves as a basis for influencing working habits of the employees.
 To review and retain the promotional and other training programmes.
TRADITIONAL METHODS
1. Ranking Method:
 Employee is compared with all others for the purpose of placing order of worth.
The employees are ranked from the highest to the lowest or from the best to the
worst.
2. Grading method
Employee performance is compared with grade definitions. The
employee is, then, allocated to the grade that best describes his
or her performance.
3. Paired Comparison:

 In this method, each employee is compared with other

employees on one- on one basis, usually based on one
trait only.
4. Forced distribution method
 The method assumes that employees’
performance level confirms to a normal
statistical distribution i.e., 10,20,40,20 and
10 per cent.
5. Forced choice method

 It contains a series of groups of statements, and rater

rates how effectively a statement describes each
individual being evaluated.
 6. Check-List Method:
7. Critical Incidents Method:

In this method, the rater focuses his or her attention on those

key or critical behaviours that make the difference between
performing a job in a noteworthy manner (effectively or
ineffectively)
8. Graphic Rating Scale Method:
 In this method, the printed appraisal form is used to
appraise each employee. The form lists traits (such as
quality and reliability) and a range of job performance
characteristics (from unsatisfactory to outstanding) for
each trait
9. Essay Method:

In this method, the rater writes a narrative description on an

employee’s strengths, weaknesses, past performance,
potential and suggestions for improvement.
10. Field review method :

The review process involves the following activities:

(a) Identify areas of inter-rater disagreement.
(b) Help the group arrive at a consensus.
(c) Ensure that each rater conceives of the standard
similarity.
MODERN METHODS

1) Management by Objectives (MBO):

2) Behaviourally Anchored Rating Scales (BARS)
3) 360 – Degree Appraisal:
4) Assessment Centres:
5) Cost Accounting Method:
LIMITATIONS

1. HOLA EFFECT : In this case the superior appraises

the person on certain positive qualities only. The
negative traits are not considered.
2. HORN EFFECT : In this case only the negative
qualities of the employee are considered and based
on this appraisal is done.
3. CENTRAL TENDENCY : In this case superior
gives an appraisal by giving central values. This
prevents a really talented employee from getting
promotions which he deserves.
4. LENIENCY AND STRICTNESS : Some bosses
are lenient in grading their employees while
some are strict. Employees who really deserve
promotion may loose the opportunity due to
strict bosses while those who do not deserve
may get benefits due to lenient one.
5. SPILL OVER EFFECT : In this case employees
are judged positively or negatively by their boss
depending upon the past performance.
6. PAPER WORK AND PERSONAL BIASED :
Appraisal involves a lot of paper work. Due to this
the work load of HR department increases. Personal
bias and prejudice result in bosses favoring certain
people and not favoring others.
7. FEAR OF LOSSING SUBORDINATES AND
SPOILING : Many bosses do not wish to spoil their
relations with their subordinates. Therefore when
they appraise the employee they may end up giving
higher grades which are not required.
THANK YOU