Table of Contents

Table of Contents 01
Assignment #1: Common Mistakes in the Selection of Employees
Cover Page 02
1.0 The selection process 03
2.0 Approach to selection process 03
3.0 Selection parameters 04
4.0 Common mistakes in the selection of employees 06
4.1 Mistake 1: Rely only on “Gut feel” 07
4.2 Mistake 2: Don’t know what company want 08
4.3 Mistake 3: Screening in vs. screening out 08
4.4 Mistake 4: Talk too much and listen to little 09
4.5 Mistake 5: Take candidates at their word 09
4.6 Mistake 6: Give in to work and market pressure 09
4.7 Mistake 7: Selling the job 10
4.8 Mistake 8: Negligent in the legal do’s and don’ts 10
4.9 Mistake 9: Go with the flow 10
4.10 Mistake 10: Listen only to candidate’s words 10
5.0 Conclusion 11
References 11
Assignment #2: Methods of Performance Appraisal
Cover Page 12
1.0 Performance management system 13
Purpose of a performance management system 13
2.0 The appraisal process 14
2.1 Establish performance standards 15
2.2 Communicate expectations 15
2.3 Measure actual performance 15
2.4 Compare actual performance with standards 16
2.5 Discuss the appraisal with the employee 16
2.6 Initiate corrective action if necessary 16
3.0 Appraisal methods 16
3.1 Unstructured appraisal 18
3.2 Traditional appraisal 18
3.2.1 Absolute standard 18
3.2.2 Relative standard 22
3.3 Modern method 24
4.0 Conclusion 26
References 27

1|Page
 Assignment
on
Common Mistakes in the Selection of Employees
2|Page
1.0 The Selection Process

Selection is the process of identifying an individual from a pool of job applicants with the
requisite qualifications and competencies to fill jobs in the organization. This is an HR process
that helps differentiate between qualified and unqualified applicants by applying
various techniques.  

The term ‘selection’ comes with the connotation of placing the right person in the right job.
Selection is the process in which various strategies are employed to help recruiters decide which
applicant is best suited for the job.

The selection process is a largely time-consuming step in an employee’s hiring experience. HR

managers must carefully identify the eligibility of every candidate for the post, being careful not
to disregard important factors such as educational qualification, background, age, etc.

2.0 Approach to Selection Process

Selection activities follow a standard pattern, beginning with an initial screening interview and
concluding with the final employment decision. The selection process typically consists of eight
steps:

(1) initial screening interview,

(2) completion of the application form,
(3) pre-employment tests,
(4) comprehensive interview,
(5) conditional job offers,
(6) background investigation,
(7) medical or physical examination, and
(8) permanent job offers.

Each step represents a decision point requiring affirmative feedback in order for the process to
continue. Each step in the process seeks to expand the organization’s knowledge about the
applicant’s background, abilities, and motivation, and it increases the information that decision

3|Page
makers use to make their predictions and final choice. However, some steps may be omitted if
they do not yield useful data, or if the cost of the step is unwarranted. Applicants should also be
advised of any specific screening, such as credit checks, reference checking, and drug tests. The
flow of these activities is depicted in following illustration.

Figure: Selection process flowchart

3.0 Selection Parameters

Following parameters are considered with highest importance while selecting a candidate:

• Educational & academic background • Positive attitude

• Relevant experience and knowledge • Learning thrust
• Professional certification • Stress tolerance
• Relevant training • Drive
• Communication skills • Result orientation
• Planning & decision-making ability • Appearance

4|Page
Figure: Sample candidate evaluation form

5|Page
The interviewers use a rating form to evaluate the important selection criteria to select the best
employee.

After conducting the final interview, the board members suggest their choice of selected
candidate based on the parameters and forwarded to top management for approval. When the
selection process is over the selected candidates are informed about the date of joining and the
documents needed to bring on the date of joining over phone or SMS.

4.0 Common Mistakes in the Selection of Employees

Selection is the most critical and significant human resources function, unless the organization
has the best available employees, it will not be able to grow and flourish in the market. The drive
and motivational levels of the employees need to be high to enable the company to attain its
goals. All the steps of the selection processes are equally important in attracting and retaining the
right talent.

Selecting the right person is a critical human resource function that drives growth. Employee
selection is the ultimate pay-me-now or pay-me-later proposition. Do it effectively now and reap
the benefits of a high-performing later. Do it fast and cheap now and you may pay the price the
later of increased turnover, underperforming teams, a chaotic culture and waste of managerial
time.

To help you reduce your turnover and improve your bottom line, below are solutions to the top
10 employee selection mistakes.

1. Rely Only on "Gut Feel"

2. Don't Know What You Want
3. Screening in vs. Screening out
4. Talk Too Much and Listen Too Little
5. Take Candidates at Their Word
6. Give in to Work and Market Pressure
7. Selling the job
8. Negligent in the Legal Do's and Don’ts

6|Page
 9. Go with the Flow
10. Listen only to candidate's words

4.1 Mistake 1: Rely Only on "Gut Feel"

More than a quarter (28 per cent) of employers say gut feeling is their main reason for hiring
someone, a survey published today has found. Having a robust hiring process in place is crucial
when recruiting, and is something that ensures all candidates are treated equally, despite the fact
they may be interviewed by different hiring managers.

Many analysis reported that relationship between years of experience hiring people and effective
selection. In several categories, the experienced manager is no more effective than the rookie
manager. In fact, experienced managers tend to rely more on gut feel and stray from validated
practices for effective selection.

7|Page
Experience and intuition are important, but so are more reliable and valid methods like testing,
simulations and work samples. No single aspect of the selection process should be relied on
exclusively; rather, each should be weighted based on the company's values and the job
requirements.

To resolve this issue, interviewer should create and train on a selection process that contains
various forms of data collection such as qualitative and quantitative. Afterwards, designing the
process and weight each selection component based on the company's values.

4.2 Mistake 2: Don't Know What Company Want

It's hard to find the "Right Person for the Right Job" when interviewer don't know what to look
for. Often managers have a general idea of what the job requires, but have not thought through
the specific skills, abilities, knowledge, experience and personal attributes needed to be
successful in the job. This ignorance can lead the selection process into hiring inappropriate
person for the vacancy. When the selection is beyond the pale, it is inevitable that company will
face confront many complications in the long run. Hiring managers with a vague concept over
the job recruitment in a specific vacancy, could not help more than running an irrational selection
process. Hiring a potential candidate having skills in business analytics; and sending him to
count product quantity day to day – is very possible when selection process is cloudy.

Like most decision-making, employee selection is fundamentally emotional. Therefore, it is

important to define and prioritize critical success factors for the job in advance. This enables
clear thinking to establish a specific position profile. It takes time, but compared to shooting in
the dark and hiring the wrong person; it's an effective use of time.

4.3 Mistake 3: Screening in vs. Screening out

Most interviewers look for characteristics that match the company culture and job requirements.
They want to find a match winner. This perspective subtly but significantly makes them filter in
good attributes and rationalize negative attributes. This approach may benefit the organization in
the long run but cause suffering in the long run.

8|Page
To resolve the issue interviewer should view the task as an investigator looking for any little
clue, any reason, why this candidate will not be successful in the job. A match winner
personality is important for the future prospect of organization but in the line of achieving
success organization may loose in some other parameter in business. Interviewer should look
into all personal and professional attributes in candidates.

4.4 Mistake 4: Talk Too Much and Listen Too Little

The reverse should be true; interviewer should have spent most of the interview listening. If
interviewers are talking more than 20% of the time, then they are selling the job instead of
screening the candidate. Talking too much is also a sign a poor preparation and lack of
behaviorally-focused questions.

Interviewer should make sure to listen 80% of the time. Remember, Interviewer’s goal is to
assess if there is a job fit. It is not to sell the job.

4.5 Mistake 5: Take Candidates at Their Word

Just because interviewers are letting the candidate do most of the talking doesn't mean they
should settle for vague or general responses. Some interviewers feel it is impolite to ask follow-
up questions to seek real behavioral support for skill or experience, so they settle for the
candidate's initial response. In most cases, that's not specific enough to make a valid assessment
of their skills.

Recruiters are on a data collection mission. Probe for detailed examples and situations where the
candidate has demonstrated the success factors company want. Let the candidate know at the
beginning of the interview that recruitment team’s goal is to fully and specifically understand
his/her capabilities.

4.6 Mistake 6: Give in to Work and Market Pressure

The vast majority of managers hire too quickly and fire too slowly. In a tight labor market, it is
not uncommon for a hiring manager to meet the candidate only once then make the offer. And

9|Page
when the candidate supply is plentiful, managers tend to miss the opportunity to sift through lots
of candidates to find the very best fit due to "lack of time."

Interviewer should use the rule of 3. Interview employees in three different times. One may
think, "All that time for one hire?" It can guarantee that company will spend much more time
than that if recruitment make the wrong hire. Therefore, in spite of, recruiting in hurry; selection
team need to invest proper amount to time for the betterment of company.

4.7 Mistake 7: Selling the job

This is another mistake that can be exacerbated in a tight labor market. Managers want to sell the
candidate on their company because they know that the candidate likely has an offer on the table
from a competing company.

The effective, long-term objective is to look for a good "fit" for the job and the company,
regardless of the labor market conditions. The approach should be "hire for attitude and train for
skill".

4.8 Mistake 8: Negligent in the Legal Do's and Don’ts

This may not prevent recruiter from making the right selection decision, but it sure will increase
company's liabilities.

Ignorance is no excuse. Know, train and enforce the law in the selection process.

4.9 Mistake 9: Go with the Flow

This comes down to lack of preparation and relying on those "favorite questions" and gut feel.
Most interviewers do not take control of the interview.

Once interviewer have identified the success factors and prioritized them, then prepare questions
and appropriate follow-up questions that will extract the necessary information from the
candidate. Remember, in the interview, Recruiter - not the candidate - set the process, timing,
roles, pace and questioning. This requires thoughtful preparation.

10 | P a g e
4.10 Mistake 10: Listen only to candidate's words

90% of all communication is nonverbal, so being attuned to the multitude of nonverbal cues
provides an interviewer with much richer information about the candidate.

Don't stop at the traditional cues: eye contact, posture, facial expression and gestures. Consider
intonation, pacing of speech, energy level, self-confidence. How did interviewer feel after the
interview? Enthused? tired, impressed? Perhaps those who work with the candidate will feel the
same way.

5.0 Conclusion

The focus of this assignment is on implicit beliefs that inhibit adoption of selection decision aids.
Understanding these beliefs is just as important as understanding organizational constraints to the
adoption of selection technologies and may be more useful for informing the design of successful
interventions. One of these is the implicit belief that it is theoretically possible to achieve near‐
perfect precision in predicting performance on the job. That is, people have an inherent
resistance to analytical approaches to selection because they fail to view selection as
probabilistic and subject to error. Another is the implicit belief that prediction of human behavior
is improved through experience. This myth of expertise results in an overreliance on intuition
and a reluctance to undermine one’s own credibility by using a selection decision aid.

Reference

[1] “Fundamentals of Human Resource Management”, by David A. Decenzo and Stephen P.

Robbins.

[2] “Fundamentals of Human Resource Management”, by Noe, Hollenbeck, Gerhart and Wright

[3] “Fairness from the Applicant's Perspective: Reactions to Employee Selection Procedures”,
by Stephen W. Gilliland. International Journal of Selection and Assessment, January 1995.

11 | P a g e
[4] “Employee selection in a total quality management context: Taking a hard look at a soft
issue”, by Christopher J. Rees &Doran Ed. Total Quality Management & Business Excellence,
September 2007.

[5] “Stubborn Reliance on Intuition and Subjectivity in Employee Selection”, by Scott

Highhouse. Industrial and Organizational Psychology, September 2008.

12 | P a g e
 Assignment Report
on
Methods of Performance Appraisal

13 | P a g e
1.0 Performance Management System

Performance appraisal plays a vital role in any organization human resource framework. There is
clear benefit from managing individual & team performance to achieve organizational
objectives. Performance appraisal is an essential tool in the hands of personal management
because this technique accomplishes the main objective of the department of the development of
people by appraising the worth of the individual.

Performance management systems involve numerous activities, far more than simply reviewing
what an employee has done. These systems must fulfill several purposes. Moreover, they are
often constrained by difficulties in how they operate.

The performance management process provides a vehicle through which employees and their
supervisors collaborate to enhance work results and satisfaction. This process is most effective
when both the employee and the supervisor take an active role and work together to accomplish
the objectives of organization. Appraisal takes place annually between the manager and the
employee. However, there are number of trends that are changing the style and relationship of
the appraisal.

1.1 Purposes of a Performance Management System

Performance appraisals must convey to employees how well they have performed on established
goals. It’s also desirable to have these goals and performance measures mutually set between the
employee and the supervisor. Without proper two-way feedback about an employee’s effort and
its effect on performance, we run the risk of decreasing his or her motivation. However, equally
important to feedback is the issue of development.

Finally comes the issue of documentation, a performance evaluation system would be incomplete
if it did not include the legal aspects of employee performance. Those job-related measures must
be performance-supported when an HRM decision affects current employees.

This critique by HRM is absolutely critical to ensure that employees are treated fairly and that
the organization is “protected”. There is also need for employees to keep copies of past
performance appraisals. If retaliation such as termination or poor job assignments occurs for

14 | P a g e
refusing a supervisor’s advances, existing documentation can show that the personnel action was
inappropriate.

If feedback, development, and documentation are to function effectively, appraisers must have a
performance system appropriate for their needs—a system that facilitates giving feedback and
development information to employees, and one that allows for employee input.

2.0 The Appraisal Process

Conducting a performance review with an employee requires skill and training on the part of the
appraiser. The negative perception that is often associated with the performance appraisal is due
in part to a feeling of being criticized during the process.

A performance appraisal is meant to be the complete opposite. Often, the culprit is in the way the
appraisal is conducted via the use of language. The way the sender of a message uses language
determines how the other person interprets the message once received. This can include tone of
voice, choice of words, or even body language.

The appraisal process can be completed through accomplishing six consecutive steps which are
noted in the following illustration.

15 | P a g e
 Figure: The appraisal Process
Because a performance appraisal is meant to provide constructive feedback, it is crucial that
appropriate language and behavior are used in the process.

2.1 Establish Performance Standards

The appraisal process begins with establishment of performance standards in accordance with the
organization’s strategic goals. These should evolve out of the company’s strategic direction—
and, more specifically, the job analysis and the job description. These performance standards
should also be clear and objective enough to be understood and measured. A supervisor’s
expectations of employee work performance must be clear enough in the employee’s mind.

2.2 Communicate Expectations

Once performance standards are established, it is necessary to communicate these expectations;

employees should not have to guess what is expected of them. Too many jobs have vague
performance standards, and the problem is compounded when these standards are set in isolation
and without employee input. Communication is a two-way street: mere information transfer from
supervisor to employee is not successful communication.

2.3 Measure Actual Performance

The third step in the appraisal process is performance measurement. To determine what actual
performance is, we need information about it. Four common sources of information frequently
used by managers address how to measure actual performance:

1. Personal observation
2. Statistical reports
3. Oral reports
4. Written reports

Each has its strengths and weaknesses; however, a combination of them increases both the
number of input sources and the probability of receiving reliable information. Selecting the
wrong criteria can produce serious, dysfunctional consequences. And what we measure
determines, to a great extent, what people in the organization will attempt to excel at. The criteria

16 | P a g e
we measure must represent performance as it was mutually set in the first two steps of the
appraisal process.

2.4 Compare Actual Performance with Standards

The fourth step in the appraisal process is the comparison of actual performance with standards.
This step notes deviations between standard performance and actual performance. The
performance appraisal form should include a list and explanation of the performance standards. It
should also include an explanation of the different levels of performance and their degree of
acceptability against the performance standard. This provides a valuable feedback tool as the
manager moves on the next step, discussing the appraisal.

2.5 Discuss the Appraisal with the Employee

One of the most challenging tasks facing appraisers is to present an accurate assessment to the
employee. The impression that employees receive about their assessment has a strong impact on
their self-esteem and, importantly, on their subsequent performance. Of course, conveying good
news is considerably easier for both the appraiser and the employee than conveying bad news. In
this context, the appraisal discussion can have negative as well as positive motivational
consequences.

2.6 Initiate Corrective Action if Necessary

The final step in the appraisal is the identification of corrective action where necessary.
Corrective action can be of two types: one is immediate and deals predominantly with
symptoms, and the other is basic and delves into causes. Immediate corrective action is often
described as “putting out fires,” whereas basic corrective action touches the source of deviation
and seeks to adjust the difference permanently. Immediate action corrects problems such as
mistakes in procedures and faulty training and gets the employee back on track right away. Basic
corrective action asks how and why performance deviated from the expected performance
standard and provides training or employee development activities to improve performance.

3.0 Appraisal Methods

17 | P a g e
In HRM there are several specific ways in which an organization can actually establish
performance standards and devise instruments to measure and appraise an employee’s output.

The various appraisal methods can be categorized according to following chart.

18 | P a g e
 Apraisal
Methods

Unstructured Traditional Modern

Appraisal Apraisal Method

Absolute Relative Phychological

Outcome
Standard Standard Appraisal

Group Order Assesment

Essay Appraisal MBO
Ranking Center

Critical Incident Individual 360 Degree

Appraisal Ranking Feedback

Human
Checklist Raired
Recourse
Appraisal Comparison
Method

Graphic Rating 720 Degree

Scale Appraisal Feedback

Forced Choice
Appraisal

BARS

Figure: Categorization of Appraisal Methods

3.1 Unstructured Appraisal

19 | P a g e
Under this old classical methods the appraiser is require to write down his impression about the
employee performance in a constructive manner in form of ACR: Annual confidential report”.
Normally while writing performance report some aspect like job performance & personality
traits are taken into consideration.

 Sense of responsibility
 Sense of Involvement
 Sense of Cooperativeness
 Sense of Judgment
 Sense of Initiative
 Sense of Regularity & punctuality

3.2 Traditional Appraisal

Traditional appraisal comprises three types of approaches:

1. Absolute Standard
2. Relative Standard
3. Outcome

3.2.1 Absolute Standard

Absolute standard means that employees are compared to a standard, and their evaluation is
independent of any other employee in a work group. This process assesses employee job traits
and behaviors.

Included in this group are the following methods:

1. Essay Appraisal
2. Critical Incident Appraisal
3. Checklist Appraisal
4. Graphic Rating Scale Appraisal
5. Forced Choice Appraisal
6. BARS

20 | P a g e
Essay Appraisal

In this method the rater writes down the employee description in detail within a number of broad
categories like, overall impression of performance, promote ability of employee, existing
capabilities and qualifications of performing jobs, strengths and weaknesses and training needs
of the employee. In this style of performance appraisal, managers/ supervisors are required to
figure out the strong and weak points of staff’s behaviors. Essay evaluation method is a non-
quantitative technique. It is often mixed with the method the graphic rating scale. The essay
method involves an evaluator's written report appraising an employee's performance, usually in
terms of job behaviors and/or results. The subject of an essay appraisal is often justification of
pay, promotion, or termination decisions, but essays can be used for developmental purposes as
well The assessor writes a brief essay providing an assessment of the strengths, weaknesses and
potential of the subject. In order to do so objectively, it is necessary that the assessor knows the
subject well and should have interacted with them. Since the length and contents of the essay
vary between assessors, essay ratings are difficult to compare.

Critical Incident Appraisal

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. This format of
performance appraisal is a method which is involved identifying and describing specific
incidents where employees did something really well or that needs improving during their
performance period. Under this method, a supervisor describes critical incidents, giving details
of both positive and negative behavior of the employee. These are then discussed with the
employee. The discussion focuses on actual behavior rather than on traits. While this technique is
well suited for performance review interviews, it has the drawback that the supervisor has to note
down the critical incidents as and when they occur. That may be impractical, and may delay
feedback to employees. It makes little sense to wait six months or a year to discuss a misdeed, a
mistake or good display of initiative.

Checklist Appraisal

21 | P a g e
In the checklist appraisal, the evaluator uses a list of behavioral descriptions and checks off
behaviors that apply to the employee. The evaluator merely goes down the list and checks off
“yes” or “no” to each question.

Once the checklist is complete, it is usually evaluated by the HRM staff, not the appraiser
completing the checklist. Therefore, the rater does not actually evaluate the employee’s
performance; he or she merely records it. An HRM analyst scores the checklist, often weighting
the factors in relationship to their importance to that specific job. The final evaluation can either
be returned to the appraiser for discussion with the employee, or someone from HRM can
provide the feedback.

The checklist appraisal reduces some bias in the evaluation process because the rater and the
scorer are different. However, the rater usually can pick up the positive and negative connections
in each item—so bias can still be introduced. From a cost standpoint, too, this appraisal method
may be inefficient and time-consuming if HRM must spend considerable time in developing
individualized checklists of items for numerous job categories.

Graphic Rating Scale Appraisal

Graphic rating scales are one of the most common methods of performance appraisal. Graphic
rating scales require an evaluator to indicate on a scale the degree to which an employee
demonstrates a particular trait, behavior, or performance result. Rating forms are composed of a
number of scales, each relating to a certain job or performance-related dimension, such as job
knowledge, responsibility, or quality of work. Each scale is a continuum of scale points, or
anchors, which range from high to low, from good to poor, from most to least effective, and so
forth. Scales typically have from five to seven points, though they can have more or less.
Graphic rating scales may or may not define their scale points.

Forced Choice Appraisal

The forced-choice appraisal is a type of checklist where the rater must choose between two or
more statements. Each statement may be favorable or unfavorable. The appraiser’s job is to
identify which statement is most (or in some cases least) descriptive of the individual being
evaluated.

22 | P a g e
The major advantage of the forced-choice method is that because the appraiser does not know
the “right” answers, it reduces bias and distortion. For example, the appraiser may like a certain
employee and intentionally want to give him a favorable evaluation, but this becomes difficult if
one is not sure of the preferred response.

On the negative side, appraisers tend to dislike this method; many do not like being forced to
make distinctions between similar-sounding statements. Raters also may become frustrated with
a system in which they do not know what represents a good or poor answer. Consequently, they
may try to second-guess the scoring key to align the formal appraisal with their intuitive
appraisal.

Behaviorally Anchored Rating Scale (BARS)

In BARS, 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. Behaviorally anchored rating scales (BARS) are rating scales whose
scale points are defined by statements of effective and ineffective behaviors. They are said to be
behaviorally anchored in that the scales represent a continuum of descriptive statements of
behaviors ranging from least to most effective. An evaluator must indicate which behavior on
each scale best describes an employee's performance.

BARS are constructed by the evaluators who will use them. There are four steps in the BARS
construction process:

 Listing of all the important dimensions of performance for a job or jobs indicating the
weight of each dimension
 Collection of critical incidents of effective and ineffective behavior
 Classification of effective and ineffective behaviors to appropriate performance
dimensions
 Assignment of numerical values to each behavior within each dimension (i.e., scaling of
behavioral anchors)

3.2.2 Relative Standard

23 | P a g e
The second general category of traditional appraisal methods compares individuals against other
individuals. These methods are relative standards rather than absolute measuring devices. The
most popular of the relative methods are as follow:

1. Group Order Ranking

2. Individual Ranking
3. Paired Comparison

Group Order Ranking

Group order ranking requires the evaluator to place employees into a particular classification,
such as the “top 20 percent”. This method, for instance, is often used in recommending students
to graduate schools. Evaluators are asked to rank the student in the top 5 percent, the next 5
percent, the next 15 percent, and so forth.

The advantage of this group ordering is that it prevents raters from inflating their evaluations so
everyone looks good or from forcing the evaluations so everyone is rated near the average—
outcomes not unusual with the graphic rating scale. The main disadvantages surface, however,
when the number of employees compared is small. At the extreme, if the evaluator is looking at
only four employees, all may be excellent, yet the evaluator may be forced to rank them into top
quarter, second quarter, third quarter, and low quarter. Another disadvantage, which plagues all
relative measures, is the zero-sum game consideration. This means that any change must add up
to zero.

Individual Ranking

The individual ranking method requires the evaluator merely to list employees in order from
highest to lowest. In this process, only one employee can be rated “best.” If the evaluator must
appraise thirty individuals, this method assumes that the difference between the first and second
employee is the same as that between the twenty-first and the twenty-second. Even though some
of these employees may be closely grouped, this method typically allows for no ties. In terms of
advantages and disadvantages, the individual ranking method carries the same pluses and
minuses as group-order ranking. For example, individual ranking may be more manageable in a

24 | P a g e
department of six employees than in one where a supervisor must evaluate the nineteen
employees who report to her.

Paired Comparison

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. This form of performance
appraisal is a good way to make full use of the methods of options. There will be a list of
relevant options. Each option is in comparison with the others in the list. The results will be
calculated and then such option with highest score will be mostly chosen.

3.2.3 Outcome

The third approach to traditional appraisal makes use of achieved performance outcomes.
Employees are evaluated on how well they accomplished a specific set of objectives determined
as critical in the successful completion of their job. This approach may be referred to as goal
setting but is more commonly referred to as management by objectives(MBO).

Management by Objectives (MBO)

The concept of management by objective (MBO) was developed by Peter Drucker in 1954. He
called it management by objectives and self-control. it is also known as work planning and
review or goal setting approach to appraisal and under that an employee is not appraised by his
individual qualities, but his performance with respect to the agreed goals and objectives. 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. It means management by objectives and the performance is
rated against the achievement of objectives stated by the management. In 2000, Weihrich
suggested a new model: the system approach to MBO (SAMBO). SAMBO comprises seven
elements: strategic planning and hierarchy of objects, setting objectives, planning for action,
implementation of MBO, control and appraisal, subsystems and organizational and management
development. Management by objectives (MBO) involves setting specific measurable goals with

25 | P a g e
each employee and then periodically discussing his/her progress toward these goals.
Management of Objective processes goes as under.

 Establish goals and desired outcomes for each subordinate

 Setting performance standards
 Comparison of actual goals with goals attained by the employee
 Establish new goals and new strategies for goals not achieved in previous year.

3.3 Modern Method

Now-a-days, the approaches of appraisal evaluation is advanced to a different level of

philosophy. The modern method of appraisal evaluation can be categorized as follows:

1. Psychological Appraisal
2. Assessment Center
3. 360 Degree Feedback
4. Human Resource Method
5. 720 Degree Feedback

Psychological Appraisal

These appraisals are more directed to assess employees’ potential for future performance rather
than the past one. It is done in the form of in-depth interviews, psychological tests, and
discussion with supervisors and review of other evaluations. It is more focused on employees
emotional, intellectual, and motivational and other personal characteristics affecting his
performance. This approach is slow and costly and may be useful for bright young members who
may have considerable potential. However, quality of these appraisals largely depends upon the
skills of psychologists who perform the evaluation.

Assessment Center

This technique was first developed in USA and UK in 1943. An assessment center is a central
location where managers may come together to have their participation in job related exercises
evaluated by trained observers. It is more focused on observation of behaviors across a series of

26 | P a g e
select exercises or work samples. Assesses are requested to participate in in-basket exercises,
work groups, computer simulations, role playing and other similar activities which require same
attributes for successful performance in actual job. The characteristics assessed in assessment
center can be assertiveness, persuasive ability, communicating ability, planning and
organizational ability, self-confidence, resistance to stress, energy level, decision making,
sensitivity to feelings, administrative ability, creativity and mental alertness etc.

360 Degree Feedback

As the name implies, this method uses multiple appraiser, including supervisor, subordinates and
peer of the targeted persons. The appraisal is 360 degree in that information is collected &
feedback is provided in full circular fashion top to bottom & back to top. It is a technique which
is systematic collection of performance data on an individual group, derived from a number of
stakeholders like immediate supervisors, team members, customers, peers and self. In fact,
anyone who has useful information on how an employee does a job may be one of the appraisers.
This technique is highly useful in terms of broader perspective, greater self-development and
multi-source feedback is useful. 360-degree appraisals are useful to measure inter-personal skills,
customer satisfaction and team building skills.

However, on the negative side, receiving feedback from multiple sources can be intimidating,
threatening etc. Multiple raters may be less adept at providing balanced and objective feedback.
The style of 360 degree performance appraisal is a method that employees will give confidential
and anonymous assessments on their colleagues.

360 degree measures are as follows

 360 degree measures manners and capacities.

 360 degree improves such skills as listening, planning and goal-setting.
 360 degree concentrates on subjective areas, for example efficiencies of teamwork,
character, and leadership.
 360 degree supplies on the way others think about a specific staff.

Human Resource Method

27 | P a g e
Human resource is valuable asset for every organization. Human resource accounting method
tries to find the relative worth of this asset in term of money. In this method the performance
appraisal of employees is judged in term of cost & contribution of employees. The cost of
employee include all the expenses incurred on them like their compensation, recruitment &
selection cost. Induction & training cost etc, whereas their contribution include the total value
added (in monetary term). The difference between the cost & contribution of employee should be
greater than the cost incurred on them.

720 Degree Feedback

Gal breath started using the 720 degree and defined it as a more intense, personalized and above
all grater review of the upper level managers that brings in the perspective of their customers or
investors, as well as subordinates. 720 degree review focuses on what matter most, which is the
customer or investors perception of their work. 720 degree approach gives people a very
different view of themselves as leaders and growing individual.

4.0 Conclusion

This brief historical review of the development of performance appraisal over the past 100 years
leads to a curious conclusion. Despite all research, there is still widespread displeasure with
performance appraisal systems, most notably in the United States and the United Kingdom.
Notwithstanding decades of trial and error, overall “the outcome has been disappointing; a small
incremental increase in what we know with respect to the performance appraisal process.” Even
internal and external HR consultants may be dubious about the usefulness of performance
appraisal systems and often find themselves “in the awkward position of fiercely promoting
performance management processes while privately fretting about their failure to work.”
Organisations need some means of ensuring performance standards are being achieved and
objectives are being met. They also need to plan for the future by setting organisational
objectives. These should be achieved through personal objectives agreed at the appraisal. This is
vital for all employees in order to maintain a competitive position, and it is important that the
method for doing this is successful. All the material in the ‘Skills of Appraisal and Performance
Review’ resource is dedicated to that end. However, underlying the methods, practices and
techniques there must be crucial managerial
28 | P a g e
thoughts, attitudes and activities. As an introduction to the training activity, the participants work
in groups to discuss what an effective performance review scheme needs. Their suggestions for a
successful scheme are discussed and they are then given a list of requirements for comparison
and discussion. Next, the participants review what an appraiser should do to make sure a
performance review scheme is successful. The training activity closes with a review of key
learning points and a final observation of performance review appraisal. An employee’s growth,
personnel development, satisfaction on the job is dependent on his performance. Similarly an
organisational growth future planning and employee’s development are contingent of employee’s
performance. The process of appraisal usually involves comparing the performance with
standards. An employee’s performance against these standards is judged by using different
methods.

Reference

[1] “Fundamentals of Human Resource Management”, by David A. Decenzo and Stephen P.

Robbins.

[2] “Fundamentals of Human Resource Management”, by Noe, Hollenbeck, Gerhart and

Wright.

[3] “A New Framework for Selection of the Best Performance Appraisal Method”, by Mostafa
Jafari, Atieh Bourouni and Roozbeh Hesam Amiri. European Journal of Social Sciences –
Volume 7, Number 3 (2009).

[4] “The dilemma of performance appraisal”, by Peter Prowse, Julie Prowse. Total Quality
Management & Business Excellence, September 2007. Measuring Business Excellence,
November 2009.

[5] “Techniques ofPerformance Appraisal-A Review”, by Ashima Aggarwal,Gour Sundar Mitra

Thakur. International Journal of Engineering and Advanced Technology, Volume-2, Issue-3,
February2013.

29 | P a g e
[6] “Performance Appraisal and it’s Effectiveness in Modern Business Scenarios”, by Punam
Singh. The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 3,
No. 4, April 2015.

30 | P a g e