Explain Techniques/Methods of conducting Performance Appraisal

Explain Techniques / Methods of conducting performance appraisal.

Ans.    There are several methods or techniques of performance appraisal.

(I)      Traditional Techniques :

1.      Check List : In this case, a list is prepared containing various work related statements such as quality of work, speed, etc. The rater indicates the individual performance by checking yes or no squares to various statements. The main advantages are the simplicity, convenience, less time consuming, and less expensive.

2.      Confidential Reports :  This is an old and traditional method or appraising employees. A confidential report is a report on the subordinate’s strengths and weaknesses. The confidential report is used for a variety of personnel decisions such as transfers, promotions etc. This is a poor method of performance appraisal, as it does not provide proper feedback to the employees.

3.      Critical Incident Method : In this method, the rater records important incidents involving the rate. If the ratee performs well in such incidents, then he is given high scores and vice-versa. For instance, in a particular incident in which a salesman convinces an argumentative  customer to buy the product, then the salesman’s performance may be given higher score.

4.      Ranking Methods : There are various ranking methods which are commonly used to evaluate the performance of the employees. Ranking methods offer convenience to evaluate the performance and they are less time consuming. The ranking methods used are :

(a)          Simple ranking method.

(b)          Alternation ranking method.

(c)          Paired comparison method.

5.      Graphic Rating Scale : In this method, the raters used a graphic scale to appraise certain specific factors such as quality of work, quantity of work, dependability, etc. The following is an example of graphic scale :

The graphic scale method is simple to understand, easy to conduct and less time consuming. However, there is lot of paper work and there are chances of rater bias.

6.      Narrative Essay : The most simplest method is the narrative essay. In this, the rater describes in detail an employee’s strengths and weaknesses, and potential, together with suggestions for improvement. If essays are written well, they can give detailed feedback to the subordinates in respect of their performance.

(II)    Modern Techniques :

7.      Role Analysis : Role analysis is a process of analyzing the role of a manager in relation to roles of other managers or members who are affected by his performance.

The role set members can conduct performance appraisal of the focal role. The focal role can make necessary changes to improve his performance.

8.      Assessment Centers : This technique is used more so in the case of selection rather than performance appraisal. However, now-a-days, some firms use this technique in performance appraisal, especially at the time of promoting managers to higher levels. The ratees are subject to various psychological tests, management games, oral presentations, and such other various exercises.

9.      Management by Objectives (MBO) : This technique can be used to measure the performance of subordinate or lower level managers. In MBO, the process involved is as follows :

•      The superior and subordinate managers jointly define common goals.
•      Jointly frame plans.
•      The subordinate manager implements the plan.
•      Joint review of plans – where performance appraisal of subordinate manager takes place.

10.    Behaviourlly Anchored Rating Scale (BARS) : It is a variation of simple graphic scale. In this case, the behaviour or attitude towards the job is appraised. Employees who have a positive attitude towards the job may make every effort to upgrade and update their knowledge and skills to handle their activities. Such employees would be given higher performance appraisal.

11.    Psychological Appraisal Method : Psychological appraisals are conducted to find out the employees potential. Psychological appraisals consists of :

•      In-depth interviews,
•      Psychological Tests, etc.

12.    Human Resource Accounting (HRA) : HRA deals with cost of and contribution of human resources to the organisation. The cost of the employee includes cost of recruitment, selection, induction, training, compensation, etc. Employee contribution is the money value of employee service provided to the organisation. Employee performance can be taken as positive when contribution is more than the cost and vice-versa.