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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
Advantages of Ranking Method
a. Employees are ranked according to their performance levels.
b. It is easier to rank the best and the worst employee.
Limitations of Ranking Method
c. 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.
d. 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
e. When a large number of employees are working, ranking of individuals become a difficult issue.

There is no systematic procedure for ranking individuals in the organization. The ranking system does
not eliminate the possibility of snap judgements.

Comparative Evaluation Method (Ranking & Paired Comparisons): These are collection of different methods
that compare performance with that of other co-workers. The usual techniques used may be ranking methods and
paired comparison method.
Ranking Methods: Superior ranks his worker based on merit, from best to worst. However how best and why best are
not elaborated in this method. It is easy to administer and explanation.
Paired Comparison Methods: In this method each employee is rated with another employee in the form of pairs. The
number of comparisons may be calculated with the help of a formula as under.
2. Graphic Linear Rating Scales
Definition of the rating scales
The Rating Scale is a form on which the manager simply checks off the employees level of performance.
This is the oldest and most widely method used for performance appraisal.
The scales may specify five points, so a factor such as job knowledge might be rated 1 (poorly informed about work
duties) to 5 (has complete mastery of all phases of the job).
2. Content of appraisal
Quantity of work. Volume of work under normal working conditions
Quality of work. Neatness, thoroughness and accuracy of work Knowledge of job.
Dependability. Conscientious, thorough, reliable, accurate, with respect to attendance, relief, lunch breaks, etc.
attitude. Exhibits enthusiasm and cooperativeness on the job
Cooperation . Willingness and ability to work with others to produce desired goals.

3. Rating scales
Rating scales can include 5 elements as follows:
4. Advantages of the rating scales
Graphic rating scales are less time consuming to develop.
They also allow for quantitative comparison.
5. Disadvantages of the rating scales
Different supervisors will use the same graphic scales in slightly different ways.
One way to get around the ambiguity inherent in graphic rating scales is to use behavior based scales, in which
specific work related behaviors are assessed.
More validity comparing workers ratings from a single supervisor than comparing two workers who were rated by
different supervisors.

3. Forced Choice Method: The series of statements arranged in the blocks of two or more are given and the rater
indicates which statement is true or false. The rater is forced to make a choice. HR department does actual assessment.
Advantages Absence of personal biases because of forced choice. Disadvantages Statements may be wrongly
4. Forced Distribution method
This is a ranking technique where raters are required to allocate a certain percentage of rates to certain
categories (eg: superior, above average, average) or percentiles (eg: top 10 percent, bottom 20 percent etc).
Both the number of categories and percentage of employees to be allotted to each category are a function of
performance appraisal design and format. The workers of outstanding merit may be placed at top 10 percent
of the scale, the rest may be placed as 20 % good, 40 % outstanding, 20 % fair and 10 % fair.
Advantages of Forced Distribution
a. This method tends to eliminate raters bias
b. By forcing the distribution according to pre-determined percentages, the problem of making use
of different raters with different scales is avoided.
Limitations of Forced Distribution
c. The limitation of using this method in salary administration, however, is that it may lead low
Employees who feel that they are productive, but find themselves in lower grade(than expected)
feel frustrated and exhibit over a period of time reluctance to work.

5. Essay Evaluation method

In this style of performance appraisal, managers/ supervisors are required to figure out the strong and weak points of
staffs behaviors. Essay evaluation method is a non-quantitative technique. It is often mixed with the method the
graphic rating scale.

6. Critical Incident techniques

Under this method, the manager prepares lists of statements of very effective and ineffective behaviour of an
employee. These critical incidents or events represent the outstanding or poor behaviour of employees or the
job. The manager maintains logs of each employee, whereby he periodically records critical incidents of the
workers behaviour. At the end of the rating period, these recorded critical incidents are used in the evaluation
of the workers performance. Example of a good critical incident of a Customer Relations Officer is : March
12 - The Officer patiently attended to a customers complaint. He was very polite and prompt in attending the
customers problem.
Advantages of Critical Incident techniques
a. This method provides an objective basis for conducting a thorough discussion of an
employees performance.
b. This method avoids recency bias (most recent incidents are too much emphasized)
Limitations of Critical Incident techniques
c. Negative incidents may be more noticeable than positive incidents.
d. The supervisors have a tendency to unload a series of complaints about the incidents during
an annual performance review sessions.
e. It results in very close supervision which may not be liked by an employee.

The recording of incidents may be a chore for the manager concerned, who may be too busy
or may forget to do it.

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.
Field Review Method: This is an appraisal done by someone outside employees own department usually
from corporate or HR department. Advantages Useful for managerial level promotions, when comparable
information is needed, Disadvantages Outsider is generally not familiar with employees work environment,
Observation of actual behaviors not possible.
Management By Objectives (MBO) method
MBO is a method of performance appraisal in which managers or employers set a list of objectives and make
assessments on their performance on a regular basis, and finally make rewards based on the results achieved. This
method mostly cares about the results achieved (goals) but not to the way how employees can fulfill them.

Behavioral Observation Scales

The method based on the scales of observation on behaviors is the one in which important tasks that workers have
performed during their working time will be assessed on a regular basis.
360 degree performance appraisal
The style of 360 degree performance appraisal is a method that employees will give confidential and anonymous
assessments on their colleagues.
n human resources or industrial psychology, 360-degree feedback, also known as multi-rater feedback, multi
source feedback, or multi source assessment, is feedback that comes from members of an employee's immediate
work circle. Most often, 360-degree feedback will include direct feedback from an employee's subordinates, peers,
and supervisor(s), as well as a self-evaluation. It can also include, in some cases, feedback from external sources, such
as customers and suppliers or other interested stakeholders. It may be contrasted with "upward feedback," where
managers are given feedback only by their direct reports, or a "traditional performance appraisal," where the
employees are most often reviewed only by their managers.
The results from a 360-degree evaluation are often used by the person receiving the feedback to plan and map specific
paths in their development. Results are also used by some organizations in making administrative decisions related to
pay and promotions. When this is the case, the 360 assessment is for evaluation purposes, and is sometimes called a
"360-degree review." However, there is a great deal of controversy as to whether 360-degree feedback should be used
exclusively for development purposes,[1] or should be used for appraisal purposes as well. [2]

Theres no doubt that 360-degree rating provides a broader perspective on employees. It frees you as an individual
and as an organization from being held hostage by the views of your bosses, said 360 evaluator Bruce Sevy of PDI
Ninth House in Minneapolis.
It can be eye opening to see what others see, said Lynne Sarikas, director of the MBA Career Center at Northeastern
University in Boston.
Especially when the boss is in another location and doesnt observe an employees behavior, added Corliss
McGinty, SPHR, of SoftSolutions Consulting in Greensboro, N.C. Its really valuable to get the perspective of
customers and direct reports.
With a 360-degree review, a strong performance in one areacustomer service, for examplemight offset a
marginal performance in another, said Timothy Wiedman, PHR, who teaches management and HR at Doane College
in Crete, Neb.