A performance appraisal system judges the performance of an employee over a given period of time. It is an indication of how he has performed in the PAST, but may necessarily not be an indication of his performance in the future. Depending on his past performance, a person is rewarded suitable with an appropriate cash incentive or bonus. A potential appraisal system is done to judge the capability of the person for a future role, meaning you are trying to assess a person to see whether he has the necessary skills, aptitude, attitude and competency for an increased level of responsibility and accountability or a leadership role. It can be enhanced with giving him specific T & D, or assigning him a mentor. You are trying to judge his FUTURE performance based on the potential appraisal. Methods of Performance Appraisal
The performance appraisal methods may be classified into three categories, as shown in Figure below. [pic]
Individual Evaluation Methods
Under the individual evaluation methods of merit rating, employees are evaluated one at a time without comparing them with other employees in the organization.
1. Confidential report: It is mostly used in government organizations. It is a descriptive report prepared, generally at the end of every year, by the employee’s immediate superior. The report highlights the strengths and weaknesses of the subordinate. The report is not data based. The impressions of the superior about the subordinate are merely recorded there. It does not offer any feedback to the appraisee. The appraisee is not very sure about why his ratings have fallen despite his best efforts, why others are rated high when compared to him, how to rectify his mistakes, if any; on what basis he is going to be evaluated next year, etc. Since the report is generally not made public and hence no feedback is available, the subjective analysis of the superior is likely to be hotly contested. In recent years, due to pressure from courts and trade unions, the details of a negative confidential report are given to the appraisee. 2. Essay evaluation: 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. While preparing the essay on the employee, the rater considers the following factors: (i) Job knowledge and potential of the employee; (ii) Employee’s understanding of the company’s programmes, policies, objectives, etc.; (iii) The employee’s relations with co-workers and superiors; (iv) The employee’s general planning, organizing and controlling ability; (v) The attitudes and perceptions of the employee, in general. 3. Critical incident technique: 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 on the job. The manager maintains logs on each employee, whereby he periodically records critical incidents of the workers behavior. At the end of the rating period, these recorded critical incidents are used in the evaluation of the workers’ performance. 4. Checklists and weighted checklists: 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. 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...