“Performance Appraisal is the process through which an employee’s behaviour and accomplishments for a period are measured and evaluated. It is a systematic way of judging the relative worth or ability of an employee in performing his or her task.”
“Performance appraisal is a systematic method of obtaining, analyzing and recording information about a person.”
It is an instrument of employee development. Traditionally, it is used as a mechanism of controlling employees. With changes in orientation, performance appraisal can be an effective instrument for helping people to grow & develop in organisational setting. In the opinion of Rao,
It can be used as an effective mechanism of continuing education and learning from one another.
Theoretical research and developments in the social science have accelerated the growth of sophistication in performance appraisal.
In most cases, this will be divided into one-year blocks, which start and end with some form of annual appraisal and objec-tive-setting meetings. During this year, managing people will involve the following:
Planning: Setting objectives, targets and standards to help people plan their activity for the year.
Doing: Providing instructions and support to ensure that objectives are achieved to the required standard.
Reviewing: Monitoring, assessing and measuring performance to check whether objectives have been achieved and to decide rewards.
Before we move on to these specifics, however, this lesson will explore two broad issues that relate to both levels of the people management process. These are your overall objectives, and your on-going process.
Some important and frequently used performance appraisal methods are discussed as under:
1. Confidential Credit Rating (CCR)
This is the traditional way of appraising employee method. The term CCR has come from China. The true meaning of the term is to take the person in to confidence and then write the confidential report. In India meaning of CCR is wrongly interpreted. A confidential report by the immediate supervisor is still a major determinant of the subordinate’s performance. In some organisations CCR is also known as ACR.
2. Ranking Method
In this method the rater picks out the individual he considers best, the one he considers next best and so on, ranks them in order on the basis of their work. The advantage of this system is simplicity and naturalness. It is useful when the number of employees is small.
3. Paired Comparison
In this system every individual in the group is compared with every other in the group. Usually only one trait, the overall ability to perform the job is considered.
4. Person to Person Rating
Person to person rating scale is prepared by selecting 10-20 individuals of varying ability and then, ranking them in the ability under consideration. In this method, a human scale is created as for example, for evaluating ‘leadership’, the person who has demonstrated the highest degree of leadership occupies the first rank in the human scale and others based on their demonstrated leadership abilities arranged in a descending order. In this method the rater simply looks over the individu-als selected as standards and checks the one nearest in the ability to the person being rated.
5. Forced Choice
The forced choice rating form contains a series of items or statements which usually describe degree of proficiency. The rater chooses among the members of each group in terms of how well he believes the statements the individuals being rated. This method attempts to make performance evaluation more objective.
6. Graphic Rating
This method is also known as point rating system. In such scales, categories are provided with boxes with an un-inter-rupted line placed just below the category notions on which he indicates his rating by means of a check mark. On some graphic scale only the extreme and midpoint categories are indicated by means of category description.
7. Checklist Method
This is the adaptation of a method developed by Thurstone for measuring attitudes. The statements in the form of a check-list can be used by supervisors in evaluating the personnel working under them. These procedures furnish the rater with a check-list of pre-scaled descriptions of behaviour.
8. Cost Accounting Method
This method evaluates performance from the monetary returns the employee yields to his organization. A relationship is established between the cost involved in keeping the person, and the benefit the organization derives from him.