Performance Appraisal Method
A. Multiple Person Evaluation Method
1. Ranking Method - ranking the employee from the most efficient to the least capable on
each trait or quality to be used in judging the employees’ performance or just simply
ranking the employee from best to worst.
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2. Paired comparison method - consist of asking an evaluator to consider only two individuals
at one time and to decide who is better. Then another pair of names is presented to the
evaluator for another evaluation. An employee’s position in the final ranking is
determined by the number of times that employee is chosen over the other employees.
3. Forced Distribution - is a method of performance appraisal that ranks employees through
forced distribution. The rater is asked to rate employees in some fixed distribution of
categories such as superior, above average, average, below average, and poor.
B. Individual Evaluation Methods
1. Critical Incident Method - is a method in which the manager writes down positive and
negative performance behavior of employees throughout the performance period. 2.
Checklist and Weighted Checklist Method - Checklist is a set of objectives or descriptive
statements. If the rater believes that the employee possesses a trait listed, the rater
checks the item; if not the rater leaves it blank. This method describes a performance
appraisal method where the rater, familiar with the jobs being evaluated, prepares a
large list of descriptive statements about effective and ineffective behavior on jobs. 3.
Graphic Rating Scales - the oldest and most widely used method for performance
appraisal. The scales may specify five points, so a factor such as job knowledge might be
rated from 1 (poorly informed about work duties) to 5 (has complete mastery of all
phases of the job).
4. Behaviorally Anchored Rating Scales (BARS) - is used to describe a performance rating
that is focused on specific behaviors or sets as indicators of effective or ineffective
performance. It is a combination of the rating scale and critical incident techniques of
employee performance evaluation.
5. Management by Objective (MBO) - is a process in which managers and their subordinate
set objectives for the employee to achieve within a specific rating period. It focuses
attention on what must be accomplished (goals) rather than how it is accomplished
(methods). Reward is given based on the result or output.
6. Multi-rater Assessment or the 36-degree Performance Feedback - is a system or process
in which employees receive confidential, anonymous feedback from people who work
around them, their immediate superiors, peers, customers, or suppliers.
7 Tips for Creating a World-class Appraisal System
1. Design the form first. The appraisal form is a lightning rod that will attract everyone’s
attention. Design the form early and get a lot of feedback on it.
2. Build your company’s values into your form. Performance appraisal is a means not
end. Values become real only when people are held accountable for living up to them. 3.
Assure ongoing communication during development. Circulate drafts and invite users to
make recommendations. Keep the development process visible through announcements
and house-organ bulletins.
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4. Train all appraisers. Performance appraisal (PA) requires a multitude of skills-behavioral
observation and discrimination, goal setting, developing people, confronting unacceptable
performance, persuading, problem-solving and planning.
5. Orient all appraisers. The program’s purposes and procedure must be explained in
advance to all who will be affected by it.
6. Use the results. If the results of the performance appraisal are not visibly used in making
promotion, salary changes, employee movement, training and termination decisions,
people will decide that it is merely an exercise and therefore is just a waste of time.
7. Monitor and revise the program. Audit the quality of appraisals, the extent to which
the system is being used, and the extent to which the original objectives have been met.
Performance Appraisal Problems and Solutions
1. Halo Effect
The Problem: A manager or supervisor allows a general favorable impression
of an employee to influence his or her judgment on each separate factor in
the performance appraisal process. An unfriendly employee will often be
rated unsatisfactory for all traits rather than jus pertaining to interpersonal
relation.
The Solution: The rater should consider each factor independently of all other
factors, rather than rating employee at the same level on all (most) factors in
appraisal.
2. Recency Effect
The Problem: Recent events tend to have an unusually strong influence on
performance evaluation. Outstanding contribution or untimely mistake just
prior to a performance review colors the manager’s perception of the
employee’s performance for the entire appraisal period.
The Solution: An alert manager compensates for lack of perspective by careful
documentation and to make refinements in the design of the appraisal
method, as well as improving the skills of the raters.
3. Previous Performance Bias
The Problem: The employee who has performed well in the distant past
assumed to be acceptable in the recent past also. Previous good work tends to
carry over into the new period being appraised.
The solution: Once again, observation and documentation of the employee’s
performance will give accurate account of the performance period under scrutiny. 4.
Leniency/ Harshness/ Strictness Errors
The Problem: Some managers tend to give mostly favorable ratings while
others tend too evaluate the same performance unfavorably. This error is
usually committed when managers feel uncomfortable about communicating
negative feedback or do not want to hurt the employee’s feelings.
The solution: Understanding the constructive purposes of performance
appraisal and acquiring effective skills in giving negative feedback should
reduce the tendency to commit this error. Raters can assess their own harsh
and lenient
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rating tendencies by examining or rating forcing a normal distribution to avoid
this error.
5. Central Tendency
The Problem: Central tendency occurs when a manager rates all employees as
average by choosing the middle rating. The central tendency closes the door to
an employee’s growth and improvement on a job, because no strengths and
weaknesses are identified.
The solution: Ranking employees can avoid this error because all employees
must be ranked and, thus, cannot all be rated as average.
6. Carelessness
The Problem: Manager make quick guesses based on first impressions of an
employee’s performance.
The Solution: Managers commit significant time observing staff members and
forming judgments on their observations. Major decisions are often based on
performance rating, and ill-considered ratings will contribute unreliable
information and detract from the organization’s goals.
7. Bias
The Problem: Individual differences among ratees in terms of characteristics
like age, race, sex, and religious and political affiliations. Evaluations are
dependent on the rater’s personal preferences, prejudices, and biases. The
rater who has biased or prejudice attitude toward certain groups of people
looks for behavior in these groups that confirms his or her prejudices.
The Solution: When rating employees, the manager must consider the same
relevant behaviors for all employees supervised. Individual difference and
other nonperformance factors should not affect performance appraisal
ratings. Careful observation, description, and documentation of actual
performance on an ongoing basis reduce the tendency for bias by emphasizing
job performance over a period of time.
Feedback or Appraisal Interview
This is an interview in which the supervisor and subordinates review the appraisal and
make plans to remedy deficiencies and reinforce strengths. It provides an opportunity to
identify the subordinate’s feelings more thoroughly and thus improve communication
between supervisor and the employee.
Annual discussions of performance should include:
1. Review of overall progress;
2. Discussion of problems that were encountered;
3. Discussion of sources of ineffective performance;
4. Agreement about how performance can be improved;
5. Discussions on how current performance fits with long-range career goals; 6. Specific
action plans for the coming year and how to reach short and long term objectives.
