 
Evaluating the performance of the employees is the best indicator of their potential and ability. Employees are evaluated against some predetermined objectives. Setting the objectives is difficult as various limiting factors like the level of technology, working conditions etc. have to be considered.
OTHER METHODS
1. 360-degree method
360-degree appraisal is nothing but appraisal done by every one.
2. Behaviourally Anchored Rating Scale (BARS)
Behaviour of the employee towards the job, colleagues, customers etc. is found out
3. Psychological Appraisals
Employee behaviour study can be undertaken by observing the employees, having discussions with them, giving them a questionnaire to fill and so on. Here emotional maturity, intellectual capacity, level of motivation etc. can be tested and then prediction can be done about the person’s capacity.
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