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Several methods and techniques are available for measurement of the performance of an employee. The methods & scales vary for many reasons:

1. They differ in the sources of traits or qualities to be appraised.

2. They differ because of the different kinds of workers who are being rated.

3. It may be because of the degree of precision attempted in an evaluation may be different.

4. They may differ because of the methods used to obtain weightings for various traits.

There is much argument on the best method to evaluate performance. Different authors have suggested different approaches. For example, Rock & Lewis classification; classification by Robbins; Strauss & Sayles classification system etc.

The most widely used categorization is given by Strauss & Sayles. They have classified performance appraisal methods into traditional and newer or modern methods.

The traditional methods lay emphasis on the rating of the individual’s personality traits such as initiative, dependability, drive, responsibility, creativity, integrity, leadership potential, intelligence, judgement, organizing ability etc.

On the other hand, newer methods place more emphasis on the evaluation of work results, job achievements etc., than on personal traits.

Traditional Methods

1. Straight Ranking Method- In this system, the rating of a man in a work group is done against that of another. simplest method of separating the most efficient from the least efficient. It is relatively easy to develop and use.

But the greatest limitation of this method is that, in practice it is very difficult to compare a single individual with another. Secondly, the task of ranking individuals is difficult when a large number of persons are rated.

2. Paired Comparison Method- By this technique, each person is compared with all other employees to be evaluated. The evaluator then checks the person he or she felt had been the better of the two on the criterion of over all ability to do the present job.

The number of times a person has been preferred is tallied and the tally developed is an index of the performances. This method is not suitable for a large group.

3. Man-to-man Comparison Method- By this method certain factors are selected for the purpose of analysis (e.g. leadership, dependability, initiative) and the rater designs a scale for each factor. Certain scores for each factor are awarded to the appraisee.

This method is used in job evaluation and is also known as the factor comparison method. It is not much use, because the designing of scales is a complicated task.

4. Grading Method- Under this system, the rater considers certain features and marks them accordingly to a scale. The scale may be: A-outstanding, B-very good, C-good or average, D-fair, E-poor and F-very poor or hopeless. The actual performance of an employee is then compared with these grade definitions and he is allotted the grade which best describes his performance.

5. Graphic/ Linear Rating Scale- It is the oldest and most widely used performance appraisal method. The rating can be a matrix of boxes or a bar graph where the evaluator checks off a location relative to the rating.

This method is easy to understand and use. It permits a statistical tabulation of scores.

One serious disadvantage is that, often the rating clusters on the high side when this method is used.

6. Forced Choice Description Method- It attempts to correct a rater’s tendency to give consistently high or consistently low ratings to all employees. Under this method, the rating elements are several sets of phrases relating to job proficiency or personal qualifications. The rater is asked to indicate which of the phrases is most and least descriptive of the employee.

7. Forced Distribution Method- This system is used to eliminate or minimize rater’s bias. A 5-point performance scale is used to rate the employees, without any descriptive statement. Employees are placed between the two extremes of ‘good’ and

‘bad’ job performances.

This method tends to eliminate or reduce bias. This method is highly simple and very easy to apply in organizations.

8. Checklist Method- Under this method, the rater does not evaluate employee performance, he supplies reports about it and the personnel department does the final rating. A series of questions are presented concerning an employee’s behaviour. The rater then checks to indicate, if the answer to a question about an employee is positive or negative.

This method suffers from bias on the part of the rater because he can distinguish positive & negative questions. This process can be very expensive & time consuming.

9. Free Essay Method- Under this method, the supervisor makes appraisal of an employee in his own words and puts down his impressions about the employee. He takes note of a number of factors like relations with colleagues, general organizing, planning ability, job knowledge, potential, attitude, development needs for future etc.

There are no common criteria for evaluation. This system requires considerable time and thought from the appraiser.

10. Critical Incident Technique- This system attempts to measure a worker’s performance in terms of certain ‘events’ or ‘episodes’ that occur in the performance of the job. These events are known as critical incidents. The collected incidents are then ranked in order of frequency and importance. This method has a limitation that negative incidents are generally more noticeable than positive incidents.

11. Group Appraisal Method- Under this method, an appraisal group rates employees, consisting of supervisors who have some knowledge of their performance.

The group then discusses the standards of performance for that job, the actual performance of the jobholder, and the causes of their particular level of performance and offers suggestions for future improvement, if any. This method is very time consuming.

12. Field Review Method- Under this method, a trainer employee from the personnel department interviews the supervisors to evaluate his subordinates. The supervisor is required to give his opinion about the progress of his subordinates, the level of the performance of each subordinate, his weaknesses, good points, ability etc.

The success of this system depends upon the competence of the interviewer. One defect is that it keeps two management representatives busy with the appraisal.

Modern Methods

1. Appraisal by Results/ Management By Objectives (MBO)- Management by objectives can be described as “a process whereby the superior and subordinate managers of an organization jointly identify its common goals, define each individual’s major areas of responsibility and contributions of each of its members.”

It strongly reinforces the importance of allowing the subordinate to participate actively in the decisions that affect him directly. Subordinates become involved in planning their own careers. MBO is result-oriented. MBO helps in increasing employee motivation. But MBO program takes a great deal of time, energy and form.

There is sometimes a “tug of war” in which the subordinate tries to set the lowest target possible and the supervisor the highest.

2. Assessment Center Method- Under this method, many evaluators join together to judge employee performance in several situations with the use of a variety of criteria.

Assessments are made to determine employee potential for promotion. The assessment centers generally measure interpersonal skills and other aspects such as:

organizing and planning, getting along with others, quality of thinking, resistance to stress, motivation to work etc.

3. 360 Degree Performance Appraisal- Some organizations have expanded the idea of upward feedback into what they call 360 degree feedback. Performance information is collected “all round” an employee. From his supervisors, subordinates peers and internal and external customers. The feedback is generally used for training and development rather than for pay increase.

4. Human Asset Accounting Method- The human asset accounting method refers to activity devoted to attaching money estima external customer goodwill. If able, well-trained personnel leave a firm, the human organization is worthless; if they join it, its human assets are increase. This method is not yet very popular.

5. Behaviorally Anchored Rating Scales (BARS)- This is a new appraisal technique.

It provides better, more equitable appraisals as compared to other techniques. Since BARS is done by persons who are expert in the technique, the results are sufficiently accurate. The technique is not biased by the experience and evaluation of the rater.