Jashore University of Science and Technology

Department of Electrical and Electrical Engineering

Course Title: Industrial Management
Course Code: IPE-2201
Class Test
On
Performance Appraisal Tools and Techniques

Submitted to
Chitra Lekha Karmaker
Assistant Professor
Department of Industrial and
Production Engineering
Jashore University of Science and
Technology
Submitted by
Mojahidul Alom Akash
ID: 181130
Department of Electrical and
Electronic Engineering
Jashore University of Science and
Technology

Date: 09/01/2021
Performance Appraisal Tools and Techniques
 Ranking
 Paired Comparison
 Forced Distribution
 Confidential Report
 Essay Evaluation
 Critical Incident
 Checklists
 Graphic Rating Scale
 BARS
 Forced Choice Method
 MBO
 Field Review Technique
 Performance Test
Let’s discuss those in details:
1. Ranking Method
In a ranking method system (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.
Advantages of Ranking Method
 Employees are ranked according to their performance levels.
 It is easier to rank the best and the worst employee.
Limitations of Ranking Method
  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.
 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.
 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.
2. Paired Comparison
The paired comparison method bases evaluations on an employee’s
performance relative to his or her peers in selected job skill
categories. For example, if you have five employees, you would
compare their performance in each category individually, assigning
a plus or a minus to indicate relative strength or weakness, as
illustrated in Table. An employee’s evaluation would be the sum of
their pluses and would be the basis of a relative ranking. This
method is unwieldy for large numbers of employees and suffers
from the vagueness and subjectivity of a graphic ranking system.

3. Forced Distribution method

This is a ranking technique where raters are required to allocate a
certain percentage of rates to certain categories (e.g.: superior,
above average, average) or percentiles (e.g.: 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

 This method tends to eliminate raters bias
 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
  The limitation of using this method in salary administration,
however, is that it may lead low morale, low productivity and
high absenteeism.
 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
4. Confidential Report
Confidential report is the method of evaluating employee’s
performance and taking necessary actions without giving any
feedbacks to the employees. Confidential report should only be
viewed by authorized personnel. Therefore, it is not send openly but
in sealed envelope. Generally, such method of performance
appraisal is conducted yearly and employees are appraised on the
following traits:
 Attendance
 Team work
 Dependability
 Leadership
 Behavior with superior, colleagues and junior workers
 Discipline
 Integrity and honesty
 Quality and quantity of output, etc.
Confidential report usually highlights the strengths and weaknesses
of the employees. Despite the fact, it is used only in government
organizations and not in other forms of organization as it does not
provide any feedback to the employees. Employees are deprived of
information such as how is he evaluated, why his ratings have fallen,
why he is underrated, what mistakes are to rectify, how to improve
his performance, etc. Employees have to directly face the
consequence (either positive or negative) of the appraisal.
5. Essay Evolution
It is a traditional and judgmental approach under which employee
is evaluated and a descriptive essay is written on him/her. The essay
describes in detail about the strengths, weaknesses, potential,
nature, etc.

Essay method helps in collecting a lot of information about the

employees as the evaluators are not confined to appraise the
employees in rigidly defined criteria. The process is unrestricted and
flexible, permitting the employers to emphasize on any issues or
traits that they feel relevant.

However, this method is tedious and difficult to manage as it

demands more description than other methods of appraisal. The
reports being descriptive in nature, it is difficult to compare and
contrast them or withdraw any conclusion. Besides, the evaluator
must have good writing skills, or else the whole process is distorted.
6. Critical Incident techniques
Under this method, the manager prepares lists of statements of very
effective and ineffective behavior of an employee. These critical
incidents or events represent the outstanding or poor behavior of
employees or the job. The manager maintains logs of each employee,
whereby he periodically records critical incidents of the worker’s
behavior. At the end of the rating period, these recorded critical
incidents are used in the evaluation of the worker’s performance.
Example of a good critical incident of a Customer Relations Officer
is: March 12 - The Officer patiently attended to a customer’s
complaint. He was very polite and prompt in attending the
customer’s problem.
Advantages of Critical Incident techniques
  This method provides an objective basis for conducting a
thorough discussion of an employee’s performance.
 This method avoids regency bias (most recent incidents are too
much emphasized)
Limitations of Critical Incident techniques
 Negative incidents may be more noticeable than positive
incidents.
 The supervisors have a tendency to unload a series of
complaints about the incidents during an annual performance
review session.
 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.
7. Checklists and Weighted Checklists
In this system, a large number of statements that describe a specific job
are given. Each statement has a weight or scale value attached to it.
While rating an employee the supervisor checks all those statements that
most closely describe the behavior of the individual under assessment.
The rating sheet is then scored by averaging the weights of all the
statements checked by the rater. A checklist is constructed for each job
by having persons who are quite familiar with the jobs. These statements
are then categorized by the judges and weights are assigned to the
statements in accordance with the value attached by the judges.
Advantages of Checklists and Weighted Checklists
 Most frequently used method in evaluation of the employee’s
performance.
Limitations of Checklists and Weighted Checklists
 This method is very expensive and time consuming
 Rater may be biased in distinguishing the positive and negative
questions.
 It becomes difficult for the manager to assemble, analyze and
weigh a number of statements about the employee’s
characteristics, contributions and behavior’s.
8. Graphic rating scale method
Graphic rating scale is one of the oldest and commonly used methods of
performance appraisal. Under this approach, the employees are
evaluated on the basis of various job performance criterions, such that
each criterion is categorically divided into poor, fairly poor, fairly good,
good and excellent. Also, these criterions carry certain score weight. The
rater ticks the category that best describes the employee and finally the
score is totaled.

Graphic rating scale is an easy and simple method of performance

appraisal as it does not require any writing skills. However, the rater’s
capricious mood may result in ineffective evaluation.
9. Behaviorally anchored rating scales (BARS)
Behaviorally anchored rating scales (BARS) is the combination of
critical incident and rating scale methods of performance appraisal.
Under this method, the scale points are defined by critical (effective or
ineffective) behaviors of the employee.
BARS usually consists of scale ranging from 5 to 9 points, each
representing continuum of statements that describes behavior of
employees ranging from unacceptable to most effective.
A BARS can be developed in following steps.
  Collecting samples of effective and ineffective job behavior from
the experts by analyzing the critical incident method
 Converting these samples into performance dimension
 Relocating the performance dimension (from unacceptable to
outstanding)
 Rating the performance dimension accordingly, starting from 1
 Finally, using the scale anchor to evaluate employee’s performance
10. Forced Choice Method:
This is another method designed to reduce bias and establish objective
standards of comparison between individuals. In this method, the rating
elements are several descriptive statements including those that best fit
the individual being rated and those that fit the least.
The rater is forced to choose among these statements, leaving no
grounds to make his own. These statements then weighed and scored by
judges other than the rater and the workers are ranked according to these
scores.
11. Management by objectives (MBO)
Management by objectives (MBO) is a modern and systematic method
of appraising employee’s performance which was jointly founded by
some experts of management science like Drucker, McGregor and
Odiorne.
Managers of present generation are aware of the fact that results of
traditional methods of performance appraisal were majorly based on the
perspective or opinion of the raters. They have realized that it is essential
to know what achievement from an employee’s point of view is.

MBO is employer-employee driven approach of performance appraisal

which involves superior and subordinates in setting goals. The
employees work upon achieving their set goals and employers keep a
record of how close they are to accomplishment of the goals. This way,
employees become clear about which path to walk on to get the goals,
subsequently increasing and improving his performance level.
MBO, at this point, does not only work as a tool for evaluating
performance but also as a motivation factor which allows the company
to extract maximum output from available human resource, permitting
employees adequate space for self-development and growth.
12. Field Review Method:
In this method, an employee is not appraised by his direct superior but
by another person usually from the HR department. This is an appraisal
by someone outside the assessor’s own department, usually someone
from the corporate office or the HR department. The basic idea is that
such a person may take a more objective view in the appraisal as he is
not under the pressure as the superior of the employee may be.
The rater also conducts the interview with the employee and his superior
for making a qualitative assessment of the employee. Field reviews are
useful and are done when comparable information is needed from
employees in different units or locations.
Disadvantages of this method are:
 An outsider is usually not familiar with conditions in an
employee’s work environment.
 An outside reviewer does not have the opportunity to observe the
employee behavior or performance over a period of time and in a
variety of situations.
13. Performance Tests and Observation
With a limited number of jobs, employee assessment may be based
upon his test of knowledge or skills. The test may be of the paper and
pencil variety or an actual demonstration of skills. The test must be
reliable and validated to be useful. Even then, the performance tests
are apt to measure potential more than actual performance. In order
for the test to be job related, observation should be made under
circumstances likely to be encountered.

REFERENCES:
1. www.2012books.lardbucket.org/books/beginning-management-of-
human-resources/s15-02-appraisal-methods.html
2. www.managementstudyguide.com/performance-appraisal-
tools.htm
3. www.courses.lumenlearning.com/wmopen-
humanresourcesmgmt/chapter/appraisal-methods/
4. www.businesstopia.net/human-resource/performance-appraisal-
methods
5. www.businessmanagementideas.com/performance-appraisal/top-8-
methods-of-performance-appraisal/3522
6. www.economicsdiscussion.net/performance-
appraisal/performance-appraisal-methods/