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Traditional methods of Performance Appraisal - Rating Scales Method - Confidential report system - HR l Concepts l Topics l Definitions l abour Laws l Online

    • Performance Appraisal

      • Performance Appraisal
      • History & origin of Performance Appraisal
      • Objectives of Performance Appraisal
      • Benefits of Performance Appraisal
      • Performance Appraisal Process
      • Performance Appraisal Rating Factors
        • Traditional methods of Performance Appraisal
        • Modern Methods of Performance Appraisal
        • 360 Degrees Performance Appraisal
      • Performance Appraisal at Pepsi-Cola International
      • Potential Appraisal
      • Performance Counseling

      Rating Scales Method

      Rating Scales Method is commonly used method for assessing the performance of the employees and well-known traditional method of performance appraisal of employees.
      Many corporations and companies example in the country India, telecommunications company likely airtel and US IT companies like Dell Corporation are using this method for evaluating the employees and subsequently take decisions on concerned employee.
      Generally speaking, the processes of performance appraisal are in six following steps: 1. discussing and establishing standards of performance with employees; 2. setting assessable targets; 3. measuring real performance; 4. comparing real performance with the employee; 5. discussing the evaluation with employee; 6. initiating corrective action when it is necessary.

      Depending upon the job of employee under this method of appraisal traits like attitude, performance, regularity, accountability and sincerity etc,are rated with scale from 1 to 10. 1 indicates negative feedback and 10 indicates positive feedback as shown below.

      Attitude of employee towards his superiors, colleagues and customers

      1 23 45 6 7 8 9 10
      Extremely Excellent

      Regularity in the job

      1 23 45 6 7 8 9 10
      Extremely outstanding

      Under this method of performance appraisal, employee may be assessed by his superiors, colleagues, subordinates or sometimes by his customers which all depends on nature of the company or job which is added where the employee.
      The performance appraisal is one of the most important parts of HRM system. Performance appraisal is the method of obtaining, analyzing, and recording evidence about the relative value of a staff to the organization. It is an analysis of a staff's recent performance, advantages and disadvantages, and suitability for training or promotion in the future. Besides rewards allocation, organizations also use appraisals to offer growing advice to employees, as well as to know their perspectives about their positions, departments, supervisors and organizations (Walsh and Fisher, 2005).

      Appraiser is a person who appraises employee will give rating for every trait given by marking or choosing number basing on his observation and satisfaction. ultimately all numbers chosen or marked will be added to determine highest score gained by employee. Employee who scored more points will be treated as top performer following descending scored employees will be treated as low performer and the least scored employee will be treated as non-performers.
      As a crucial function of HRM, although there is no consensus on the purpose of performance appraisal, the purpose of performance appraisal is generally identified as to improve current performance, provide feedback, increase motivation, identify training needs, identify potential, let individuals know what is expected of them, focus on career development, award salary increases and solve job problems (Torrington, Hall and Taylor, 2002). Performance appraisal plays a verity of roles in the HRM: it encourages supervisor and staff have regular and organized dialogue, makes the provision of feedback to the employee being assessed comprehensively; it enables to evaluate past and current performance, aims to find out the possibility for improvement and how to achieve it; it identifies the needs of training and individual or professional developmental; it gives advice for promotion and secondment; it is used to decide the performance-based payment.

      This traditional form of appraisal, also known as “Free Form method” involves a description of the performance of an employee by his superior. The description is an evaluation of the performance of any individual based on the facts and often includes examples and evidences to support the information.
      A major drawback of the method is the inseparability of the bias of the evaluator.
      The Human Resources Management (HRM) is rational allocation of human resources in planned way based on the requirements of development strategy of organizations, which ensure the corporate strategic objectives. The HRM is a series of corporate policies in human resources affairs and relevant management activities. A diversity of functions are included in the HRM, and the key is to determine the employment needs of an organization and whether to outsource or hire staffs to fill these vacancies, recruiting, training, evaluating performance, and guaranteeing the personnel and management performs conform to numerous rules.

      Under this method, the rater is asked to express the strong as well as weak points of the employee’s behavior. This technique is normally used with a combination of the graphic rating scale because the rater can elaborately present the scale by substantiating an explanation for his rating.
      It is no doubt to say that strategic control plays an important role in meeting strategic business objective of the organizations. "Strategy implementation is best accomplished through high-performing people'' (Michlitsch, 2000), that is to say, the HRM functions are important strategic control measurements. The ability of the organization to obtain a benefit from the professional knowledge and employees' vision will be limited if there is an invaluable link between human resources functions and strategic plans of organization (Humphreys, 2005), so the link between the HRM and strategic objective is so important. As one of the core functions of the HRM, performance appraisal has purpose on administration and motivation, it provides important information and feedback for the HRM, so it is necessary for leaders of organizations to understand and create accomplished performance appraisal and feedback systems, which can "link human resource management activities with the strategic needs of the business'' (Schuler, Fulkerson and Dowling, 1991).

      While preparing the essay on the employee, the rater considers the following factors:
      • Job knowledge and potential of the employee;
      • Employee’s understanding of the company’s programmes, policies, objectives, etc.
    • The employee’s relations with co-workers and superiors;
      How is technology helping transform performance appraisal and management?

      The most common cliché is “performance appraisal is dead“. What it means is the annual performance appraisal is dead and most organisations today are adopting regular, realtime, anecdotal and casual feedback.
      Just as young people do not write e-mails anymore they WhatsApp similarly we don't have to write a long performance appraisal at the end of the year.
      One of the most critical elements of being a supervisor, manager, or team leader is knowing how to give effective performance appraisals to employees of an organization. This important human resources process helps employees grow along with the company because it focuses their attention on how to become better, more motivated, and eventually more successful. By utilizing a skilled performance appraisal system, these managers can empower employees to take charge of needed improvements, as well as create a more positive and productive work environment. In the simplest terms, performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview, whether it be semi-annual or annual. The work performance of the employee is examined and discussed in great detail in order to identify strengths, weaknesses, opportunities for improvement, and skills development (Archer North).

      Companies are moving to real-time performance appraisal and that is why in our system everything is shareable and realtime. And technology plays the most crucial role in providing the platform to have fast and quick and informal communication.
      It probably goes without saying that different industries and jobs need different kinds of appraisal methods. For our purposes, we will discuss some of the main ways to assess performance in a performance evaluation form. Of course, these will change based upon the job specifications for each position within the company. In addition to industry-specific and job-specific methods, many organizations will use these methods in combination, as opposed to just one method. There are three main methods of determining performance. The first is the trait methodA category of performance evaluation in which managers look at an employee’s specific traits in relation to the job, such as friendliness to the customer., in which managers look at an employee’s specific traits in relation to the job, such as friendliness to the customer. The behavioral methodA category of performance evaluation in which managers look at individual actions within a specific job. looks at individual actions within a specific job. Comparative methodsA category of performance evaluation in which managers compare one employee with other employees. compare one employee with other employees. Results methodsA category of performance evaluation in which managers are focused on the accomplishments of the employee, such as whether or not they met a quota. are focused on employee accomplishments, such as whether or not employees met a quota.

    • The employee’s general planning, organizing and controlling ability;
    • The attitudes and perceptions of the employee, in general.
    Essay evaluation is a non-quantitative technique. This method is advantageous in at least one sense, i.e., the essay provides a good deal of information about the employee and also reveals more about the evaluator. The essay evaluation method however, suffers from the following limitations:
    • It is highly subjective; the supervisor may write a biased essay.
      In a ranking method systemEmployees in a particular department are ranked based on their value to the manager or supervisor, which is used as a performance evaluation method. (also called stack ranking), employees in a particular department are ranked based on their value to the manager or supervisor. This system is a comparative method for performance evaluations.The manager will have a list of all employees and will first choose the most valuable employee and put that name at the top. Then he or she will choose the least valuable employee and put that name at the bottom of the list. With the remaining employees, this process would be repeated. Obviously, there is room for bias with this method, and it may not work well in a larger organization, where managers may not interact with each employee on a day-to-day basis.

      The employees who are sycophants will be evaluated more favorably then other employees.
    • Some evaluators may be poor in writing essays on employee performance. Others may be superficial in explanation and use flowery language which may not reflect the actual performance of the employee.
      A checklist method for performance evaluations lessens the subjectivity, although subjectivity will still be present in this type of rating system. With a checklist scaleA performance evaluation method in which a series of questions is asked and the manager simply responds yes or no to the questions., a series of questions is asked and the manager simply responds yes or no to the questions, which can fall into either the behavioral or the trait method, or both. Another variation to this scale is a check mark in the criteria the employee meets, and a blank in the areas the employee does not meet. The challenge with this format is that it doesn’t allow more detailed answers and analysis of the performance criteria, unless combined with another method, such as essay ratings. A sample of a checklist scale is provided in Figure 11.3 "Example of Checklist Scale".

      It is very difficult to find effective writers nowadays.
    • The appraiser is required to find time to prepare the essay. A busy appraiser may write the essay hurriedly without properly assessing the actual performance of the worker.
      This method of appraisal, while more time-consuming for the manager, can be effective at providing specific examples of behavior. With a critical incident appraisalA performance evaluation method in which the manager is asked to record examples of effective behavior and ineffective behavior of the employee during the time period between evaluations., the manager records examples of the employee’s effective and ineffective behavior during the time period between evaluations, which is in the behavioral category. When it is time for the employee to be reviewed, the manager will pull out this file and formally record the incidents that occurred over the time period. The disadvantage of this method is the tendency to record only negative incidents instead of postive ones. However, this method can work well if the manager has the proper training to record incidents (perhaps by keeping a weekly diary) in a fair manner. This approach can also work well when specific jobs vary greatly from week to week, unlike, for example, a factory worker who routinely performs the same weekly tasks.

      On the other hand, appraiser takes a long time, this becomes uneconomical from the view point of the firm, because the time of the evaluator (supervisor) is costly.

    How do we use the ranking method? Under the ranking method, the manager com-pares an employee to other similar employees, rather than to a standard measurement.
    Management by objectives (MBOs)A type of performance appraisal in which the manager and employee work together to develop objectives, and at the end of the period the employee is measured on whether he or she met the objectives. is a concept developed by Peter Drucker in his 1954 book The Practice of Management.Peter Drucker, The Practice of Management (New York: Harper, 2006). This method is results oriented and similar to the work standards approach, with a few differences. First, the manager and employee sit down together and develop objectives for the time period. Then when it is time for the performance evaluation, the manager and employee sit down to review the goals that were set and determine whether they were met. The advantage of this is the open communication between the manager and the employee. The employee also has “buy-in” since he or she helped set the goals, and the evaluation can be used as a method for further skill development. This method is best applied for positions that are not routine and require a higher level of thinking to perform the job. To be efficient at MBOs, the managers and employee should be able to write strong objectives. To write objectives, they should be SMART:George T. Doran, “There’s a S.M.A.R.T. Way to Write Management’s Goals and Objectives,” Management Review 70, no. 11 (1981): 35.

    An offshoot of ranking is the forced distribution method, which is similar to grading on a curve. Predetermined percentages of employees are placed in various performance categories, for example, excellent,above average, average, below average, and poor,.
    Critics have long said that a forced ranking system can be detrimental to morale; it focuses too much on individual performance as opposed to team performance. Some say a forced ranking system promotes too much competition in the workplace. However, many Fortune 500 companies use this system and have found it works for their culture. General Electric (GE) used perhaps one of the most well-known forced ranking systems. In this system, every year managers placed their employees into one of three categories: “A” employees are the top 20 percent, “B” employees are the middle 70 percent, and “C” performers are the bottom 10 percent. In GE’s system, the bottom 10 percent are usually either let go or put on a performance plan. The top 20 percent are given more responsibility and perhaps even promoted. However, even GE has reinvented this stringent forced ranking system. In 2006, it changed the system to remove references to the 20/70/10 split, and GE now presents the curve as a guideline. This gives more freedom for managers to distribute employees in a less stringent manner.“The Struggle to Measure Performance,” BusinessWeek, January 9, 2006, accessed August 15, 2011,

    The employees ranked in the top group usually get the rewards (raise, bonus, promotion), those not at the top tend to have the reward withheld, and those at the bottom sometimes get punished. In Self-Assessment and Skill Builder 8-1, you are asked to rank the performance of your peers.
    A BARS method first determines the main performance dimensions of the job, for example, interpersonal relationships. Then the tool utilizes narrative information, such as from a critical incidents file, and assigns quantified ranks to each expected behavior. In this system, there is a specific narrative outlining what exemplifies a “good” and “poor” behavior for each category. The advantage of this type of system is that it focuses on the desired behaviors that are important to complete a task or perform a specific job. This method combines a graphic rating scale with a critical incidents system. The US Army Research InstituteJennifer Phillips, Jennifer Shafter, Karol Ross, Donald Cox, and Scott Shadrick, Behaviorally Anchored Rating Scales for the Assessment of Tactical Thinking Mental Models (Research Report 1854), June 2006, US Army Research Institute for the Behavioral and Social Sciences, accessed August 15, 2011, developed a BARS scale to measure the abilities of tactical thinking skills for combat leaders. Figure 11.4 "Example of BARS" provides an example of how the Army measures these skills.

    Why and when do we use the ranking method? Managers have to make evaluative decisions, such as who is the employee of the month, who gets a raise or promotion, and who gets laid off. So when we have to make evaluative decisions, we generally have to use ranking.
    Performance appraisals involve setting goals, judging the results achieved, and creating performance criteria that can be met and measured over and over again for each of the employees' job descriptions. The three things that should be focused on are: 1) Performance, not personalities; 2) Valid, concrete, relevant issues, rather than subjective emotions and feelings; and 3) Reaching agreement on what the employee is going to improve in his performance (McKirchy, 9). According to the book, Powerful Performance Appraisals, conducting a good appraisal means the manager must be very clear that the objective is the job-related performance of the individual, and not the personality factors, such as laziness. Furthermore, I think that by focusing on specifics, rather than generalized issues, employees will know how to fix their mistakes or improve their performance. Many times when people hear something negative about their personality, they...

    However, our ranking can, and when possible should, be based on other methods and forms. Ranking can also be used for developmental purposes by letting employees know where they stand in comparison to their peers—they can be motivated to improve performance.
    Another consideration is the effect on employee morale should the rankings be made public. If they are not made public, morale issues may still exist, as the perception might be that management has “secret” documents.

    For example, when one of the authors passes back exams, he places the grade distribution on the board. It does not in any way affect the current grades—but it lets students know where they stand, and he does it to motivate improvement.
    It is clearly that the HRM makes a great contribution for either private or public sector organizations to achieve organization goals, therefore, as an important function of HRM, the performance appraisal has significant importance in organizations. If there is no performance appraisal system, an organization can hardly have a clear understanding of its current situation, therefore it cannot get the direction and goals for improvement for future, the situation of the organization will be dangerous. If the performance appraisal system is full of deviation or even error, it can possibly lead the organization into a wrong direction of resource inputting, thus the organization will lose its long-term competitiveness. On the contrary, an effective performance appraisal system can ensure resources of the organization invested into the most critical processes, which can improve competitive advantage of organization.


    A better technique of comparison than the straight ranking method, this method compares each employee with all others in the group, one at a time. After all the comparisons on the basis of the overall comparisons, the employees are given the final rankings.
    In a forced distribution system, like the one used by GE, employees are ranked in groups based on high performers, average performers, and nonperformers. The trouble with this system is that it does not consider that all employees could be in the top two categories, high or average performers, and requires that some employees be put in the nonperforming category.


    This technique of performance appraisal was developed by Flanagan and Burns.
    The manager prepares lists of statements of very effective and ineffective behavior of an employee.
    To make this type of evaluation most valuable (and legal), each supervisor should use the same criteria to rank each individual. Otherwise, if criteria are not clearly developed, validity and halo effects could be present. The Roper v. Exxon Corp case illustrates the need for clear guidelines when using a ranking system. At Exxon, the legal department attorneys were annually evaluated and then ranked based on input from attorneys, supervisors, and clients. Based on the feedback, each attorney for Exxon was ranked based on their relative contribution and performance. Each attorney was given a group percentile rank (i.e., 99 percent was the best-performing attorney). When Roper was in the bottom 10 percent for three years and was informed of his separation with the company, he filed an age discrimination lawsuit. The courts found no correlation between age and the lowest-ranking individuals, and because Exxon had a set of established ranking criteria, they won the case.Richard Grote, Forced Ranking: Making Performance Management Work (Boston: Harvard Business School Press, 2005).

    These critical incidents or events represent the outstanding or poor behavior of employees on the job. The manager maintains logs on each employee, whereby he periodically records critical incidents of the workers behavior.
    For certain jobs in which productivity is most important, a work standards approachA performance evaluation method in which a minimum level of expectation is set and the employee’s performance evaluation is based on this minimum level of productivity. could be the more effective way of evaluating employees. With this results-focused approach, a minimum level is set and the employee’s performance evaluation is based on this level. For example, if a sales person does not meet a quota of $1 million, this would be recorded as nonperforming. The downside is that this method does not allow for reasonable deviations. For example, if the quota isn’t made, perhaps the employee just had a bad month but normally performs well. This approach works best in long-term situations, in which a reasonable measure of performance can be over a certain period of time. This method is also used in manufacuring situations where production is extremely important. For example, in an automotive assembly line, the focus is on how many cars are built in a specified period, and therefore, employee performance is measured this way, too. Since this approach is centered on production, it doesn’t allow for rating of other factors, such as ability to work on a team or communication skills, which can be an important part of the job, too.

    At the end of the rating period, these recorded critical incidents are used in the evaluation of the workers’ performance. An example of a good critical incident of a sales assistant is the following:

    July 20 - The sales clerk patiently attended to the customers complaint.

    He is polite, prompt, enthusiastic in solving the customers’ problem.
    In the essay method approach, the appraiser prepares a written statement about the employee being appraised.

    On the other hand the bad critical incident may appear as under:

    July 20 - The sales assistant stayed 45 minutes over on his break during the busiest part of the day. He failed to answer the store manager’s call thrice.

    Essay methods are time-consuming and difficult to administer. Appraisers often find the essay technique more demanding than methods such as rating scales.

    He is lazy, negligent, stubborn and uninterested in work.

    This method provides an objective basis for conducting a thorough discussion of an employee’s performance. This method avoids recency bias (most recent incidents get too much emphasis). This method suffers however from the following limitations:

    • Negative incidents may be more noticeable than positive incidents.
    • The supervisors have a tendency to unload a series of complaints about incidents during an annual performance review session.
    • It results in very close supervision which may not be liked by the employee.
    • The recording of incidents may be a chore for the manager concerned, who may be too busy or forget to do it.


    Confidential report system is well known method of performance appraisal system mostly being used by the the Government organisations.
    Performance appraisal is one of the key functions of the HRM, it has a largely effect on the success of the organizations' HRM, thus, it is no need to say that performance appraisal plays an important role in either private or public sector organizations. However, due to the complicated relationship within the organizations and the difficulties in designing appraisal system, performance appraisal cannot always be effective and useful.

    In this method of appraising system, subordinate is observed by his superiors regarding his performance in the job and on his duties done. Thereafter Superior writes confidential report on his performance, mainly on his behaviour in the organisation and conduct and remarks if any.
    Q3. Critically assess the importance of the Performance Appraisal as a function of human resource management in either a private or a public sector organization. Use a relevant case study discussed in the seminars to illustrate the importance of the above in relation to the strategic business objective of the organization.

    confidential reports will be kept confidential and will not be revealed to anyone and finally confidential reports will be forwarded to the top management officials for taking decision against person on whom confidential report has made. Confidential reports are the main criteria for promoting or transferring of any employee mainly in the government sector.
    On the other hand, according to the research of Walsh and Fisher (2005), "organizations' performance appraisal processes operate in ways that are less than ideal". Performance appraisal may be leaded to useless and inaccurate situation by many factors such as time pressures, complicated forms and psychological defense. What's more, the appraisal process may become unclear and incoherent since employees and organizations try to meet different needs by performance appraisal. That is why most organizations agree that performance appraisal is important and must be executed, but only a few organizations can execute it continuously, usefully and effectively. Besides, "a performance appraisal system should build clarity and reinforce a strategic corporate mission/direction" (Chadwick, 1991), different parts of the organization will make effort to achieve the objectives in their one-sided view if a performance appraisal system didn't build clarity and strengthen strategic organization objective, this may lead to sabotaging to overall organization goal. If things come to this situation, performance appraisal cannot act as an important and useful role in the HRM, let alone in strategic control.

    All governmental organisations example judiciary, police Department and other government departments in the India are using confidential reports method as a tool to know about the employee and to take any decision connecting to him.
    As one of the most important functions of the HRM, performance appraisal plays a big role in the success of the organizations' HRM. Performance appraisal affects the productivity and competitiveness of organization, the results of performance appraisal is an important indicator of personnel decisions and effectively performance appraisal leads to better staff management. Performance appraisal has a big importance to either private or public sector organizations and an effectively performance appraisal system does offers great help for either private or public sector organizations to achieve strategic goals. However, since the complicated relationship within the organizations and the complications in establishing well-designed appraisal system, performance appraisal cannot always be effective and useful as we expected it. In one word, establishing an effective appraisal system is not an easy task and it can never be completed overnight (Caruth and Humphreys, 2008). The only way to develop a useful and effective performance appraisal system is to work hard, think carefully, plan seriously and design accurately as what Rother Homes has done, it is not easy but is definitely worth to do.

    Procedure of confidential report system
    The superiors who appraises their subordinates performance, behaviour and other key issues will be kept in the form of writing on paper, which is called as confidential report.
    The essay method is far less structured and confining than the rating scale method. It permits the appraiser to examine almost any relevant issue or attribute of performance. This contrasts sharply with methods where the appraisal criteria are rigidly defined.

    Confidential report should not be sent openly on a paper, it must be kept in a sealed cover to send it to decision-making authorities. Only authorised persons are allowed to open the sealed covers which consists of confidential reports.
    The techniques greatest advantage - freedom of expression - is also its greatest handicap. The varying writing skills of appraisers can upset and distort the whole process. The process is subjective and, in consequence, it is difficult to compare and contrast the results of individuals or to draw any broad conclusions about organizational needs.

    Confidential reports shall not be handed over in loose sheets to the subordinates.

    Key factors assessed in Confidential Report writing
    • Character and conduct of an employee
    • Absenteeism of an employee
    • Knowledge of an employee
    • His nature and quality of work
    • Punctuality of employee
    • Unauthorised absenteeism or leave without permission
    • Behaviour of an employee with colleagues, superiors and with public
    • Ability of supervision and controlling
    • His/her integrity and honesty
    • If any complaints against employee

    This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

    The rater is given a checklist of the descriptions of the behaviour of the employees on job. The checklist contains a list of statements on the basis of which the rater describes the on the job performance of the employees.
    The statement may be written and edited by the appraiser alone, or it be composed in collaboration with the appraisee.

    Another simple type of individual evaluation method is the checklist. A checklist represents, in its simplest form, a set of objectives or descriptive statements about the employee and his behavior. If the rater believes strongly that the employee possesses a particular listed trait, he checks the item; otherwise, he leaves the item blank.

    The disadvantage of this type of scale is the subjectivity that can occur. This type of scale focuses on behavioral traits and is not specific enough to some jobs. Development of specific criteria can save an organization in legal costs. For example, in Thomas v. IBM, IBM was able to successfully defend accusations of age discrimination because of the objective criteria the employee (Thomas) had been rated on.

    A more recent variation of the checklist method is the weighted list. Under this, the value of each question may be weighted equally or certain questions may be weighted more heavily than others. The following are some of the sample questions in the checklist.

    Is the employee really interested in the task assigned? Yes/No

    Is he respected by his colleagues (co-workers) Yes/No

    Does he give respect to his superiors? Yes/No

    Does he follow instructions properly? Yes/No

    Does he make mistakes frequently? Yes/No

    Example of Graphic Rating Scales Method

    Performance Trait
    Excellent Good Average
    Fair Poor
    5 4 3 21
    Knowledge of Work
    5 4 3 2 1
    Managerial Skills
    5 4 3 2 1
    Team Work
    5 4 3 2 1
    5 4 3 2 1
    5 4 3 2 1
    5 4 3 2 1
    Interpersonal relationships
    5 4 3 2 1
    Creativity 5 4 3 2 1
    5 4

    This is the very popular, traditional method of performance appraisal.
    In a paired comparison system, the manager must compare every employee with every other employee within the department or work group. Each employee is compared with another, and out of the two, the higher performer is given a score of 1. Once all the pairs are compared, the scores are added. This method takes a lot of time and, again, must have specific criteria attached to it when comparing employees.

    Under this method, core traits of employee pertaining to his job are carefully defined like Attitude, Knowledge of Work, Managerial Skills, Team Work, Honesty, Regularity, Accountability, Interpersonal relationships, Creativity and Discipline etc. Theses traits are allotted with with numerical scale to tabulate the scores gained by appraisee (employee) in performance assessment relating to his job by appraiser (employer) and sum-up to determine the best performer.
    In this paper, some basic concept of performance appraisal will be discussed at the very beginning, the importance of performance appraisal will be discussed after that, issues which leads to ineffective of appraisal will be indicated and a case will also be used to illustrate the importance of performance appraisal.

    Appraiser ticks rating of particular trait depending upon his endeavor in his job. Score vary form employee to employee depending up on his performance levels and endeavor in his job.

    This method is popular because it is simple and does not require any writing ability. The method is easy to understand and use. Comparison among pairs is possible. This is necessary for decision on salary increases, promotion, etc.

    Companies like DELL, Maruthi Suzuki India Ltd and airtel are using this graphic rating scale method to appraise performance of their employees in there jobs and to take decisions regarding the matters concerned to employees

    The statement usually concentrates on describing specific strengths and weaknesses in job performance. It also suggests courses of action to remedy the identified problem areas.


    The system is 17 to 18 years old, and most big organisations started waking up to this form of performance appraisal in the late '90s. The bell curve is nothing but a graphical representation of the fact that everybody's performance is not the same. Some employees will be outstanding, some average, and others at the bottom.
    Irrespective of whether or not the bell curve is the most appropriate representation of performance or human behaviour, some believe that it is the most viable option, especially in services-driven sectors, which have large workforces.

    The system requires the managers to evaluate each individual, and rank them typically into one of three categories (excellent, good, poor).
    Appraisers may place whatever degree of emphasis on issues or attributes that they feel appropriate. Thus the process is open-ended and very flexible. The appraiser is not locked into an appraisal system the limits expression or assumes that employee traits can be neatly dissected and scaled.

    The system is thought to be relatively widely-used, but remains somewhat controversial due to the competition it creates, and also the reality that not all employees will fit neatly into one of the categories and might end up in a category that does not reflect their true performance. One of the first companies to use this system was General Electric, in the 1980s.

    In India, big Indian employers including Infosys, Wipro, ICICI Bank and Aditya Birla Group evaluate lakhs of employees on the basis of this system.
    Back home, big Indian employers including InfosysBSE -0.47 %, WiproBSE 0.63 %, ICICI BankBSE 0.33 % and Aditya Birla Group evaluate lakhs of employees on the basis of this system.
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    Forced ranking is a method of performance appraisal to rank employee but in order of forced distribution.

    For example, the distribution requested with 10 or 20 percent in the top category, 70 or 80 percent in the middle, and 10 percent in the bottom.

    The top-ranked employees are considered “high-potential” employees and are often targeted for a more rapid career and leadership development programs.

    In contrast, those ranked at the bottom are denied bonuses and pay increases. They may be given a probationary period to improve their performance.

    Facts: many companies have been discarding this age-old appraisal system since it has got few drawbacks like lack of transparency understanding the process of assessment of employee, some people believe that this method treats employees as machines and some feel that this system doesn't fit to present trend of management. Companies which have dropped this method of addressing system are Microsoft, Google and Adobe.

    Application of Forced Ranking

    General Electric Company, Ford Motor, Wipro, HCL, Sun Microsystems, Cisco Systems, EDS, Enron and a host of other U.S. corporations have adopted similar policies of this method.

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