UNIT 4-

HRM
PERFORMANCE
APPRAISAL

Dr. Shaifali Garg,Assistant Professor, G.L.A

UNIVERSITY.
Contents
 Concept

 Process

 Objectives

 Methods
 Concept - Performance
Appraisal
Performance Appraisal is
widely used in society.

Parents evaluate their children

Teachers evaluate their

students and

Employers evaluate their

employees.
Meaning - Performance
Appraisal
A performance appraisal is also referred as
 Performance review, 

 Performance evaluation 

 Employee appraisal

 Is a method by which the job performance of

an employee is documented and evaluated.

Performance appraisal is a part of career

development and consist of regular reviews of employee
performance within an organizations.
 Definitions - Performance
Appraisal
 According to Dale S. Beach,“
Performance appraisal is the systematic
evaluation of the individual with respect
to his or her performance on the job and
his or her potential for development.”

 According to E. Flippo, “Performance

appraisal is the systematic, periodic and
an impartial rating of an employee’s
excellence in matters pertaining to his
present job and his potential for a better
job.”
Process - Performance
Appraisal
1

6 2

5 STEPS OF 3
PA
4
Objectives - Performance
Appraisal
Methods - Performance
Appraisal
Methods - Performance
Appraisal
Straight Ranking
 Simplest and oldest method of merit-ranking.
 Every employee is judged as a whole without
distinguishing the rates from his performance.
 Employees are ranked from the best to the
poorest on the basis of overall performance.

 Example- If 5 employees
Employees Rank
A,B,C,D and E are to be ranked
B 1
the ranking may be-
A 2
E 3
D 4
C 5
Checklist Method
 It is a list of statements that describes the
characteristics and performance of employees
on the job.
 The rater checks to indicate whether the
behaviour of an employee is positive (+ve) or
negative (-ve) to each statement.
 Example- A list of statements like-
1. Is the employee regular on the job
Yes / No
2. Does the employee follow instructions
properly Yes / No
3. Is the employee respected by his
subordinates Yes / No
4. Does the employee keep the equipment in
Confidential Report
 Prepared by the employee’s immediate
superior.
 It is mostly used in public organizations.
 It covers the
 strengths and weaknesses,
 achievements and failure,

 personality and behaviour of the employee.

Free Form / Essay
Method
 The evaluator writes a short essay on
the employee’s performance on the
basis of overall impression.
 The evaluator continuously watches the
employees and writes his assessment in
the report.
 Observation method is generally used.
Paired Comparison
Method
 It is also known as “man to man
assessment”.
 Every employee is compared trait-wise,

with other employees, one at a time.

 Example- If there are 5 employees to be
• compared
A’s performance is first compared
with B,
• find out who has better
performance,
• then A is compared with C, D and E
and all data of performance is
recorded.
 Graphic Rating Scale
 Rates the degree to which an employee
has achieved various characteristics.
 It is a numerical indicating different

degree.
 A five or seven point rating scale is used

for each trait.

Performance Excellent Good Average Fair Poor
Trait 5 4 3 2 1

Attitude

Knowledge

Skills
Methods - Performance
Appraisal
Assessment Centre
 An assessment centre is a place to evaluate
an individual potentiality and performance.
 Generally, employees are given an
assignment similar to the job they would be
expected to perform if promoted.
 The major competencies that are judged by
the Evaluator or Manager in assessment
centers are
 interpersonal skills,
 communication skills,
 planning and organizing capabilities,
 motivation,
 career orientation etc.
Human Resource
Accounting (HRA)
 Human resource are a valuable asset of
any organization.
 It is a method to measure the effectiveness

of personnel management activities and

the use of people in an organization.
 HRA is the process of assigning, budgeting,

and reporting the cost of human resources

incurred in an organization, including
wages and salaries and training expenses.
360 degree Performance
Appraisal
 360 degree method provides each
employee the opportunity to receive
performance feedback from
 Supervisor and peers,
 Staff members, co-workers and
customers.
Behaviourally Anchored Rating
Scales (BARS)
 Combination of graphic rating scale and
critical incidents method.
 It consists of predetermined critical
areas of job performance or sets of
behavioural statements describing
important job performance qualities as
good or bad
 Example - the qualities like
 inter-personal relationships,
 adaptability and reliability,
 job knowledge etc.
 Behaviourally Anchored Rating
Scales (BARS)

 An employee’s actual job behaviour is

judged against the desired behaviour
by recording and comparing the
behaviour with BARS. Developing and
practicing
Performa Poin BARS requires expert
Behavior
nce ts
knowledge.
Extremely 7 Can expect trainee to make valuable suggestions for increased
good sales and to have positive relationships with customers all over
the country.
Good 6 Can expect to initiate creative ideas for improved sales.
Above 5 Can expect to keep in touch with the customers throughout
average the year.
Average 4 Can manage, with difficulty, to deliver the goods in time.
Below 3 Can expect to unload the trucks when asked by the supervisor.
average
Management By Objective
(MBO)
 Is a process whereby the superior and
subordinate of an organization jointly
identify its common goals
 Define each individual’s major areas of 
responsibility
 in terms of the results expected of him, and
 Use these measures as guides for
operating the unit and assessing the
contribution of each of its members.
Benefits of Performance
Appraisal
Limitations of Performance
Appraisal
Lack of Rater
Awareness
Leniency and
Strictness
Judgment
Errors

Time
Consumin
g