This document discusses performance appraisals and provides information about different performance appraisal methods. It begins by outlining some of the advantages of tying employee pay to performance reviews, such as increasing competition and motivation. It then describes several specific performance appraisal methods: ranking methods, rating scales, checklist methods, critical incidents methods, essay methods, and behaviorally anchored rating scales. Each method is explained and its advantages and disadvantages are listed. The document concludes by providing additional topics and resources related to performance appraisals.
1. Performance appraisal cartoon
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I. Contents of getting performance appraisal cartoon
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There are several schools of thought regarding pay incentives and employee performance
reviews. While some managers warn of the disadvantages of tying pay to performance, the
advantages can provide a small-business owner in a competitive industry an important edge over
the competition. Employees working hard to earn wage increases allow a small-business owner
to maximize payroll and retain the strongest staff members.
Increased Employee Competition
Connecting employee pay raises to performance reviews can encourage a more competitive
workforce. This can result in a higher level of productivity as each employee strives to increase
sales or client acquisitions to earn the highest marks on the next performance review. The
performance-based pay scale should require effort to reach the next rung of pay increases.
Having pay increases that employees can reach simply through seniority could reduce
competition in your workplace and slow your small business' level of overall productivity.
Connecting Pay and Performance
Employees respond with increased worth ethic and attention to the task when pay increases
directly reflect their level of performance. Tying pay raise incentives to performance reviews can
help the workforce in your small business better understand what it takes to earn higher pay and
that your company values employees who choose to work hard and outperform other employees.
This also helps new employees who can see your company doesn't simply reward employees for
longevity, instead opting to reward workers who consistently improve on production and
operational techniques.
2. Quantifying Employee Praise
Money is a quantifiable way to show an employee praise for high performance or a job well
done. Connecting pay raise incentives to performance evaluations provides you with a clear
means to show employees that you value high productivity and are willing to reward employees
for that effort. This increases the morale of your workforce and can even lead to an increase in
productivity as employees feel a sense of loyalty to the company because you show loyalty to
your workers.
Eliminating Under-performing Staff
If earning extra money doesn't motivate an employee to work harder, not much else will be
successful. Performance-based pay is an easy means for your small business to weed out under-
performing workers who either don't have the desire to keep up with fellow employees or lack
the skills necessary to produce at a high level. It's important you provide additional training to
struggling workers to ensure each employee has the opportunity to succeed before you decide to
cut ties and terminate the workers.
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III. Performance appraisal methods
1.Ranking Method
The ranking system requires the rater to rank his
subordinates on overall performance. This consists in
simply putting a man in a rank order. Under this method,
the ranking of an employee in a work group is done
against that of another employee. The relative position of
each employee is tested in terms of his numerical rank. It
may also be done by ranking a person on his job
performance against another member of the competitive
group.
Advantages of Ranking Method
i. Employees are ranked according to their performance
levels.
ii. It is easier to rank the best and the worst employee.
Limitations of Ranking Method
i. The “whole man” is compared with another “whole man”
in this method. In practice, it is very difficult to compare
individuals possessing various individual traits.
ii. This method speaks only of the position where an
3. employee stands in his group. It does not test anything
about how much better or how much worse an employee
is when compared to another employee.
iii. When a large number of employees are working, ranking
of individuals become a difficult issue.
iv. There is no systematic procedure for ranking individuals
in the organization. The ranking system does not eliminate
the possibility of snap judgements.
2. Rating Scale
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
3. Checklist method
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
4. 4. 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.
5. 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.
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.
