Different methods of performance appraisal are followed in different organizations to achieve the above objectives. Since some methods of performance appraisal are complicated and calls for adequate knowledge in quantitative techniques, many organizations follow traditional methods of appraisal while others consider modern methods as the basis for evaluating job performance of their employees.
Traditional methods of performance appraisal may be categorized broadly under the following heads:
1. Straight Ranking Method:
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This is the oldest and simplest method of performance appraisal by which employees are tested in order of merit, giving some numerical rank and are placed in a simple grouping. Such grouping separates employees under each level of efficiency, which may vary from the most efficient to the least efficient.
Since, it is a blunt quantification of performance; it does not account for behavioural parameters and only considers an individual employee’s level of efficiency in relation to others. For such obvious deficiency, this system does not provide any scientific basis for performance appraisal of employees.
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2. Paired Comparison Technique:
This is a somewhat better method of performance appraisal as each employee is compared with others in pairs at a time. For each performance trait, an individual employee’s performance is tallied with others in pairs, and then the rank order is decided.
This system is also not suitable in those cases where the number of employees is usually high. For better comprehension, a sample table of comparison on trait reliability is presented below:
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For Trait Reliability of Person Rated:
| As Compared To | A | B | C | D | E |
| A | X | – | – | – | – |
| B | X | + | – | + | – |
| C | + | – | X | – | – |
| D | + | – | + | X | – |
| E | + | + | – | + | X |
3. Man-to-Man Comparison:
Under this method, certain factors are selected for analysis like, leadership, initiative, interpersonal relationship, etc., and a scale is designed by a rater for each such factor. After rating such factors individually, the aggregate performance of an individual employee is decided, and such aggregative performance is also given a scale.
Likewise, an individual employee is considered with others. This method is somewhat like factor comparison method and is widely used in job evaluation. Since developing uniform rating scale is a complicated task, this factor is not much in use for performance appraisal of employees.
4. Grading Method:
Under this method, certain features worth understanding the performance of an employee are identified. Such features may be leadership, communication power, analytic ability, job knowledge, etc. The raters mark/rate such features according to a scale and match the employees’ performance in comparison to his/her own developed grade definition.
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To take an example A, B, C, D, E types of grade definitions for each feature may be developed by a rater to indicate the ratings—A= very significant, B= Significant, C = Moderate, D= Average, E= Poor. Such types of grading are of much use for selection of an employee or grading them in written examinations.
5. Graphic or Linear Rating Scale:
Such a rating scale is normally a continuous scale which enables a rater to mark somewhere along a continuum. Usually, a printed form is given to a rater along with the factors to be rated, giving a continuous scale against each such factors.
This method, therefore, enables quantification of performance scores and also helps to analyse its significance using statistical techniques. Since making a rating cluster is difficult for obvious difference in individual characteristics of each job, this system may not always ensure objective appraisal.
6. Forced Choice Description Method:
It is a combination of objective and subjective judgement on an individual employee’s performance against each rating element. Positive and negative phrases are given asking the rater to indicate applicability of such phrases as objectives in describing the employee whose performance is rated. For its obvious complexity, this system is not much in use.
7. Forced Distribution Method:
It is a method to evaluate employees’ performance according to a predetermined distribution scale. To take an example, under such a method, the rate is asked to distribute 5 per cent of the total employees on top of the scale, indicating their superior performance and promotability, 10 per cent may be put immediately under this level, indicating their good performance and future promotability. This system is easy to understand and can be applied in organizations without much hassles.
8. Checklist Method:
It is a mere process of reporting employees’ performance, compiling yes/no responses. Final rating is done by the personnel vis-a-vis HRD department based on such reports. Since this is not an objective method of appraisal, it is not free from bias.
9. Free Easy Method:
It is open-ended qualitative appraisal of employees’ performance, giving an opportunity to the rater to put down his impression in subjective form on the important job factors. Since it is descriptive and essay type, it is likely to be biased, and judgmental errors may crop in.
10. Critical Incident Method:
This method measures employees’ performance in terms of certain ‘events’ or ‘critical incidents’ instrumental for success or failure on the job. Such critical incidents are identified by the rater after in-depth study of the employees’ working. As negative incidents get more focus and since recording of incidents demands for the utmost care, this method is not free from defects.
11. Group Appraisal Method:
It is an evaluation of an employee by multiple judges. The immediate supervisor of the employee and a few other top-level personnel discuss the performance standards and then evaluate the performance of the employee. The greatest advantage of this method is that it is relatively free from bias, even though it is time consuming.
12. Field Review Method:
This type of review is conducted by the HR department by interviewing the supervisor of an employee to understand the subordinate employees’ performance. Normally, for such type of appraisal, the appraiser, i.e., the representative of the human resource department, gets equipped with certain questions and asks those questions about the employees, whose performances are to be reviewed, to their respective supervisors, more in the form of informal interview.
Since this process of appraisal is an indirect method of appraising the performance, it may not always reflect the true performance level of the subordinate employees. Such an interview always has sensitizing effect on the interview, whose responses may be some opinionated generalization.
Moreover, this method keeps the key managerial personnel always busy for appraisal. Despite such defect, organizations prefer to have this type of appraisal for lower-level employees, since this process is simple and easy to administer.