Performance Appraisal Tyes

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Performance appraisal, also known as employee appraisal, is a method by which the job performance of an employee is evaluated (generally in terms of quality, quantity, cost and time). Performance appraisal is a part of career development.

Types include -

Behavioral Observation Scales

Behavioral Observation Scales is frequency rating of critical incidents that worker has performed. • The BOS was developed by Latham & Wexley (1977) who believed that both graphic rating scales and BARS require supervisors to make vague judgments. • The BOS is a list of critical incidents behaviors which the supervisor has to rate in terms of frequency.

2. Rating scales
We use 5 scales as follows to identify frequency of behavior.

• Never
• Seldom
• Sometimes
• Generally
• Always

3. Identification of critical incidents
Items indicate either desired or undesired aspects of work performance, for examples : • Worker misses workdays ________
• Worker never needs her/his work to be double checked

FORCED RANKING (Forced distribution)
Definition of forced ranking (forced distribution)
Forced ranking is a method of performance appraisal to rank employee but in order of forced distribution.

For example, the distribution requested with 10 or 20 percent in the top category, 70 or 80 percent in the middle, and 10 percent in the bottom.

The top-ranked employees are considered “high-potential” employees and are often targeted for a more rapid career and leadership development programs.

In contrast, those ranked at the bottom are denied bonuses and pay increases. They may be given a probationary period to improve their performance.

2. Application of Forced Ranking
GE, Ford Motor, Conoco, Sun Microsystems, Cisco Systems, EDS, Enron and a host of other U.S. corporations have adopted similar policies of this method

3. Advantages and disadvantages of forced Ranking

• They force reluctant managers to make difficult decisions and identify the most and least talented members of the work group. • They create and sustain a high performance culture in which the workforce continuously improves.


• They increase unhealthy cut-throat competitiveness;
• They discourage collaboration and teamwork;
• They harm morale;
• They are legally suspect giving rise to age discrimination cases.

Management By Objectives (MBO)
1. Definition of Management By Objectives (MBO)
• MBO is a process in which managers / employees set objectives for the employee, periodically evaluate the performance, and reward according to the result. • MBO focuses attention on what must be accomplished (goals) rather than how it is to be accomplished (methods).

2. Classification of Objectives
• Corporate objectives
• Functional objectives
• Individual objectives

3. Conditions of Management By Objectives
An objective must be satisfied SMART conditions:

• Specific,
• Measurable,
• Achievable,
• Relevant, and
• Time-Specific.

4. Advantages of MBO
• It is based on the assumption that the individual (employee) knows more than anyone else about her/his own capabilities, needs, strengths, weaknesses and goals. • A further advantage of MBO is that the emphasis is on the future rather than on the past. Appraisal thus becomes a means to a constructive end.

Performance Ranking
Performance ranking method in performance appraisal

1. Definition of performance ranking method
Ranking is a performance appraisal method that is used to evaluate employee performance from best to worst.

Manager will compare an employee to another employee, rather than comparing each one to a standard measurement.

2. Rating scale of ranking
• Much better – 5 points
• Slightly better – 4 points
• Equal – 3 points
• Slightly worst – 2 points
• Much worst – 1 point

3. Process of ranking
• The scaled comparison asks a rater or evaluator to compare the performance of two individuals. • Continue...
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