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Performance appraisal methods with examples
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I. Contents of getting performance appraisal methods with examples
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Performance appraisals are an effective tool for informing employees about the quality of their
work and for identifying areas of their performance which may require improvement. Although
poorly handled performance appraisals can create a negative and intimidating experience for the
employee, they can be constructive and positive if handled well.
Effective performance appraisals can lead to high performance, and therefore increased
productivity. Where an employee’s performance does not improve, the performance appraisal
process can also be utilised as evidence in any subsequent defence to an unfair dismissal claim.
Below are some best practice strategies on how to conduct a performance appraisal.
Be prepared
Ensure that you are well prepared for performance appraisal by considering the employee’s past
performance appraisals, training records and other objective evidence of performance (e.g.
attendance records, billings, customer feedback, error rates). If necessary, obtain feedback from
other colleagues.
The employee should also be given adequate time to complete a self assessment of their own
performance.

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You should be prepared to answer any questions that the employee could potentially ask, and be
ready to discuss remuneration and career progression.
Never ambush the employee
The performance appraisal should not be viewed as an isolated event at which an employee is
given feedback about their performance, particularly if the feedback is negative. Employees
should be given constructive and regular feedback throughout the year and this should be
documented.
Balance: don't just focus on the negatives!
In any discussion with the employee, both the positive and negative aspects of the employee’s
performance should be discussed. Giving behaviour based examples is good practice. The
employee should be given objective and constructive feedback and an opportunity to respond, for
example, to mention any mitigating circumstances.
Encourage the employee to do most of the talking, as an effective appraisal allows the employee
to take responsibility for their own performance and growth.
Together, explore strategies to improve the employee’s performance and set relevant objectives
for the year ahead. Where previous objectives have not been met, identify why they were not met
and develop a plan to ensure they will be met.
Take the time to review the employee’s positive attributes that occurred during the review
period, and consider how they can be applied to help the employee improve in those areas where
a change in behaviour is desired.
Ensure that the employee understands what is required of them and has been able to raise any
concerns or issues.
Follow up
Ensure that you follow up the employee’s progress against the objectives that were set within a
reasonable period of time. Provide employees with regular updates on their performance, but not
in a way that is overbearing and leads to the employee feeling stressed, and becoming
unproductive.
Keep records of the discussion and any decisions that were made. Also, don’t give the employee
high scores or a glowing performance review if there are genuine performance issues. Remember
the performance appraisal can be utilised as evidence.

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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
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

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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. 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.

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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.
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