Performance Appraisal Methods

Performance Appraisal Methods

“It is a systematic evaluation of an individual with respect to performance on the job and individual’s potential for development.”

Definition 2: Formal System, Reasons and Measures of future performance

“It is formal, structured system of measuring, evaluating job related behaviors and outcomes to discover reasons of performance and how to perform effectively in future so that employee, organization and society all benefits.”

Meaning of Performance Appraisals

Performance Appraisals is the assessment of individual’s performance in a systematic way. It is a developmental tool used for all round development of the employee and the organization. The performance is measured against such factors as job knowledge, quality and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation, judgment, versatility and health. Assessment should be confined to past as well as potential performance also. The second definition is more focused on behaviors as a part of assessment because behaviors do affect job results.

Performance Appraisals and Job Analysis Relationship

Job Analysis à Performance Standards à Performance Appraisals
Describe the work and personnel requirement of a particular job. Translate job requirements into levels of acceptable or unacceptable performance Describe the job relevant strengths and weaknesses of each individual.

Objectives of Performance Appraisals

Use of Performance Appraisals

1.    Promotions

2.    Confirmations

3.    Training and Development

4.    Compensation reviews

5.    Competency building

6.    Improve communication

7.    Evaluation of HR Programs

8.    Feedback & Grievances

4 Goals of Performance Appraisals

General Goals Specific Goals
Developmental Use Individual needs

Performance feedback

Transfers and Placements

Strengths and Development needs

Administrative Decisions / Uses Salary


Retention / Termination


Lay offs

Poor Performers identification

Organizational Maintenance HR Planning

Training Needs

Organizational Goal achievements

Goal Identification

HR Systems Evaluation

Reinforcement of organizational needs

Documentation Validation Research

For HR Decisions

Legal Requirements

Performance Appraisal Process

1.    Objectives definition of appraisal

2.    Job expectations establishment

3.    Design an appraisal program

4.    Appraise the performance

5.    Performance Interviews

6.    Use data for appropriate purposes

7.    Identify opportunities variables

8.    Using social processes, physical processes, human and computer assistance

Difference between Traditional and Modern (Systems) approach to Appraisals

Categories Traditional Appraisals Modern, Systems Appraisals
Guiding Values Individualistic, Control oriented, Documentary Systematic, Developmental, Problem solving
Leadership Styles Directional, Evaluative Facilitative, Coaching
Frequency Occasional Frequent
Formalities High Low
Rewards Individualistic Grouped, Organizational


Numerous methods have been devised to measure the quantity and quality of performance appraisals. Each of the methods is effective for some purposes for some organizations only. None should be dismissed or accepted as appropriate except as they relate to the particular needs of the organization or an employee.

Broadly all methods of appraisals can be divided into two different categories.

  • Past Oriented Methods
  • Future Oriented Methods

Past Oriented Methods

1.    Rating Scales: 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 – Rater’s biases

2.    Checklist: 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

3.    Forced Choice Method: The series of statements arranged in the blocks of two or more are given and the rater indicates which statement is true or false. The rater is forced to make a choice. HR department does actual assessment. Advantages – Absence of personal biases because of forced choice. Disadvantages – Statements may be wrongly framed.

4.    Forced Distribution Method: here employees are clustered around a high point on a rating scale. Rater is compelled to distribute the employees on all points on the scale. It is assumed that the performance is conformed to normal distribution. Advantages – Eliminates Disadvantages – Assumption of normal distribution, unrealistic, errors of central tendency.

5.    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.

6.    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.

7.    Field Review Method: This is an appraisal done by someone outside employees’ own department usually from corporate or HR department. Advantages – Useful for managerial level promotions, when comparable information is needed, Disadvantages – Outsider is generally not familiar with employees work environment, Observation of actual behaviors not possible.

8.    Performance Tests & Observations: This is based on the test of knowledge or skills. The tests may be written or an actual presentation of skills. Tests must be reliable and validated to be useful. Advantage – Tests may be apt to measure potential more than actual performance. Disadvantages – Tests may suffer if costs of test development or administration are high.

9.    Confidential Records: Mostly used by government departments, however its application in industry is not ruled out. Here the report is given in the form of Annual Confidentiality Report (ACR) and may record ratings with respect to following items; attendance, self expression, team work, leadership, initiative, technical ability, reasoning ability, originality and resourcefulness etc. The system is highly secretive and confidential. Feedback to the assessee is given only in case of an adverse entry. Disadvantage is that it is highly subjective and ratings can be manipulated because the evaluations are linked to HR actions like promotions etc.

10.  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.

11.  Cost Accounting Method: Here performance is evaluated from the monetary returns yields to his or her organization. Cost to keep employee, and benefit the organization derives is ascertained. Hence it is more dependent upon cost and benefit analysis.

12.  Comparative Evaluation Method (Ranking & Paired Comparisons): These are collection of different methods that compare performance with that of other co-workers. The usual techniques used may be ranking methods and paired comparison method.

  • Ranking Methods: Superior ranks his worker based on merit, from best to worst. However how best and why best are not elaborated in this method. It is easy to administer and explanation.
  • Paired Comparison Methods: In this method each employee is rated with another employee in the form of pairs. The number of comparisons may be calculated with the help of a formula as under.

N x (N-1) / 2

Future Oriented Methods

1.    Management By Objectives: It means management by objectives and the performance is rated against the achievement of objectives stated by the management. MBO process goes as under.

  • Establish goals and desired outcomes for each subordinate
  • Setting performance standards
  • Comparison of actual goals with goals attained by the employee
  • Establish new goals and new strategies for goals not achieved in previous year.

Advantage – It is more useful for managerial positions.

Disadvantages – Not applicable to all jobs, allocation of merit pay may result in setting short-term goals rather than important and long-term goals etc.

2.    Psychological Appraisals: These appraisals are more directed to assess employees potential for future performance rather than the past one. It is done in the form of in-depth interviews, psychological tests, and discussion with supervisors and review of other evaluations. It is more focused on employees emotional, intellectual, and motivational and other personal characteristics affecting his performance. This approach is slow and costly and may be useful for bright young members who may have considerable potential. However quality of these appraisals largely depend upon the skills of psychologists who perform the evaluation.

3.    Assessment Centers: This technique was first developed in USA and UK in 1943. An assessment center is a central location where managers may come together to have their participation in job related exercises evaluated by trained observers. It is more focused on observation of behaviors across a series of select exercises or work samples. Assessees are requested to participate in in-basket exercises, work groups, computer simulations, role playing and other similar activities which require same attributes for successful performance in actual job. The characteristics assessed in assessment center can be assertiveness, persuasive ability, communicating ability, planning and organizational ability, self confidence, resistance to stress, energy level, decision making, sensitivity to feelings, administrative ability, creativity and mental alertness etc. Disadvantages – Costs of employees traveling and lodging, psychologists, ratings strongly influenced by assessee’s inter-personal skills. Solid performers may feel suffocated in simulated situations. Those who are not selected for this also may get affected.

Advantages – well-conducted assessment center can achieve better forecasts of future performance and progress than other methods of appraisals. Also reliability, content validity and predictive ability are said to be high in assessment centers. The tests also make sure that the wrong people are not hired or promoted. Finally it clearly defines the criteria for selection and promotion.

4.    360-Degree Feedback: It is a technique which is systematic collection of performance data on an individual group, derived from a number of stakeholders like immediate supervisors, team members, customers, peers and self. In fact anyone who has useful information on how an employee does a job may be one of the appraisers. This technique is highly useful in terms of broader perspective, greater self-development and multi-source feedback is useful. 360-degree appraisals are useful to measure inter-personal skills, customer satisfaction and team building skills. However on the negative side, receiving feedback from multiple sources can be intimidating, threatening etc. Multiple raters may be less adept at providing balanced and objective feedback.

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    nice information.its only here I found it.

  170. Anonymous
    November 17, 2014 at 5:22 pm

    thanks for the informetion

  171. komala
    November 17, 2014 at 11:14 pm

    this very good information but, we also need some information about process of performance appraisal.

  172. Anonymous
    November 21, 2014 at 8:06 am


  173. Anonymous
    November 21, 2014 at 6:42 pm

    Really Very Informative & useful Site.Thanks

  174. Anonymous
    November 22, 2014 at 2:04 am

    very good

  175. Anonymous
    November 24, 2014 at 12:26 am

    its good

  176. Anonymous
    November 24, 2014 at 3:56 pm

    great info

  177. saher
    November 24, 2014 at 6:31 pm

    very useful. thanks.

  178. Bolden
    November 25, 2014 at 6:30 pm

    thumbs high! great material for Human resources managers

  179. Anonymous
    November 29, 2014 at 12:46 am

    gud, tx

  180. November 29, 2014 at 1:48 am

    good one…

  181. Anonymous
    November 30, 2014 at 10:49 pm

    great inf. but any body help me regarding which appraisal technique use for different management level?

  182. moniq
    March 8, 2016 at 2:29 pm

    thanks 4 infmtn

  183. Sharada
    March 10, 2016 at 9:45 pm

    Information is very nice

  184. Anwesha Ghosh
    September 14, 2016 at 4:06 pm

    Thank you!! Very comprehensive yet not repetitive
    ..Going to use this for my presentation 🙂

    • Anonymous
      January 14, 2017 at 9:07 pm

      It is very very helpful and informative and now I will do my sub ordinates appraisals proerly.

  185. Santosh Kumar
    November 5, 2016 at 6:02 am

    Nicely presented, easy to understand the concept. Thank you!!

  186. Santosh Kumar Singh
    November 5, 2016 at 6:04 am

    Nice one, help the note me lot. easy to undersand.

  187. SRI
    November 5, 2016 at 11:59 am


  188. Ramesh Sharma
    November 9, 2016 at 3:19 pm

    I found very adequate !

  189. Bhashi
    November 14, 2016 at 9:16 am

    Very helpful article.keep updating…thnqq

  190. Emmanuel Ssemugenyi
    December 9, 2016 at 12:06 pm

    Good Article, though some techiniques need thorough explanation such as forced choice method and forced distribution

  191. Rammuni Panchali Nadishka De Silva
    December 12, 2016 at 7:32 pm

    Thank you .. the information flow was very useful. for my studies

  192. Manuteju
    January 10, 2017 at 6:43 am

    It is relevant to my subject t&’s good for all of us..thank for this site…I have more information in it…

  193. Joan Amulen
    January 28, 2017 at 2:31 pm


  194. Anonymous
    February 20, 2017 at 6:55 pm

    which part here is The performance discussion method?

  195. Anonymous
    March 15, 2017 at 8:39 pm

    Thanks for the information ❤

  196. March 18, 2017 at 5:07 am

    You have brought up a very fantastic points , appreciate it for the post.

  197. Princy
    April 21, 2017 at 9:27 pm

    Very useful and thanks…

  198. Anonymous
    May 1, 2017 at 7:21 pm

    very useful material for my HR assignment thank you very much

  199. navjot
    May 10, 2017 at 4:01 pm

    Useful information , thanks

  200. Ula
    May 23, 2017 at 5:54 am

    good..i am able to use the useful information provided. Thank you so much.

  201. Robern Kipruto
    June 12, 2017 at 12:27 pm

    well explained Good work HR dpartment yu have really assisted me

  202. alka meto
    June 14, 2017 at 9:04 pm

    very selected information and it did add value on my research paper. performance appraisal i really appreciated your thinking and developing of the material. updated very well

  203. amandeep
    June 25, 2017 at 12:27 pm

    gr8 study work easy to understand .

  204. Meher zafar
    August 10, 2017 at 11:22 pm

    Really a worth reading blog

    August 19, 2017 at 12:31 am

    I really appreciates d articles,pls keep it up and continue posting

  206. Dorah Sawe
    September 6, 2017 at 10:28 pm

    Very informative in managing HR function while at the same time meeting organizational goals. Getting a win win situation. Would like to get more information on Performance Contracting and management via email whenever there’s anything new.

  207. irankunda Espérance
    September 13, 2017 at 4:01 pm

    Thank you very much , it was difficult for me to understand the different method of appraisal , it is well explained , I really appreciate. Be blessed.

  208. September 24, 2017 at 10:44 pm

    informative and useful for my project

  209. Anonymous
    October 4, 2017 at 7:15 pm

    The work was to useful

  210. Anonymous
    October 7, 2017 at 8:33 pm

    very informative

  211. Lensa
    November 12, 2017 at 7:45 pm

    I like it very much!!

  212. leona luis
    November 25, 2017 at 7:53 pm

    it was easy to understand
    keep up the good work
    thank you

  213. Diana Wai
    December 28, 2017 at 11:14 am

    very useful

  214. February 1, 2018 at 5:17 pm

    Whatever you do, keep doing it on a regular, informal basis. The once a year or half yearly methods are too formulaic. If you are not appraising performance at least monthly you are not doing your job as a manager.

  215. Gwebe Israel
    March 6, 2018 at 1:58 pm

    Very nice content

  216. Anonymous
    May 6, 2018 at 12:37 am

    Can u elaborate on the performance appraisal processes plz. A little definition would be good

  217. Anonymous
    September 3, 2018 at 3:26 pm

    Thanks for the easy, correct and precise information.

  218. Anonymous
    September 15, 2018 at 7:58 pm

    What are functions of staffing

  219. Anonymous
    September 15, 2018 at 7:59 pm

    What are the functions of staffing

  220. Kimbowa mark
    October 25, 2018 at 2:38 pm

    This is so good for me who is planning yo be a human resource manager

  221. Vivian ogiridiri
    November 20, 2018 at 6:11 am

    Very useful

  222. Solomon
    March 12, 2019 at 5:41 pm

    Simpler way to explain something deep! Please add names so that I can indicate it on my reference list in my research.

  223. Anonymous
    May 14, 2019 at 1:27 pm

    It is very good in my seen & lets continue

  224. Stacey Green
    September 4, 2019 at 8:48 am

    Who would of thought human resource manager had all of these appraisals, assessments, training categorized for every employee in each department. Information is informative and helps me stay focused on my studies in Human Resource Management.

  225. Anonymous
    October 30, 2019 at 2:31 pm

    very good information…very helpful

  226. Anonymous
    August 15, 2020 at 11:32 pm

    very useful and easy to understand…..

  227. Anonymous
    September 16, 2020 at 11:13 am

    Great Information and Very Usefull

  228. Mmakwena Josephine Bakaabatsile
    January 30, 2021 at 9:31 pm

    Interesting info and very clear and understandable

  1. September 15, 2022 at 9:46 pm
  2. September 19, 2022 at 1:36 pm

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