Modern Methods of Performance Appraisal

Most traditional methods of performance appraisal emphasize either on the task or the worker’s personality, while making an appraisal. In order to bring about a balance between these two, modern methods have been developed. The modern methods of performance appraisal place more emphasis on the evaluation of work results, i.e. job achievements than the personal traits. Modern methods tend to be more objective and worthwhile. These methods are briefly discussed below.

1. Behavioral Anchored Rating Scale (BARS)

The problem of judgmental evaluation inherent in the traditional methods of performance evaluation led to some organisations to go for objective evaluation by developing a technique know as BARS around 1960s. It is an approach that has received greater attention in recent years. It combines major elements of the ‘Critical Incident’ and ‘Graphic Ratings Scale’ approaches. The appraiser rates the employee on specific job behaviors derived from specific performance dimensions (on a given job rather than on general descriptions or traits). Developing a Behavioral Anchored Rating Scale (BARS) typically involves the following five steps.

  1. Generating critical incidents – Critical incidents are those which are essential for the performance of the job effectively. Persons who are knowledgeable of the job in question are asked to describe specific critical incidents of effective and ineffective performance.
  2. Developing performance dimensions — The critical incidents are then clustered into a smaller set of performance dimensions, usually five to ten. Each cluster, or say, dimensions is then defined.
  3. Reallocation incidents – Various critical incidents are reallocated dimensions by another group of people who also know the job in questions. Various critical incidents so reallocated to original dimensions are clustered into various categories, with each cluster showing similar critical incidents. Those critical incidents are retained which meet 50 to 80 per cent of agreement with the cluster as classified in step 2. .
  4. Scaling incidents — The same second group as in step rates the behavior described in each nine points scale. Then, average effectiveness ratings for each incident are determined to decide which incidents will be included in the final anchored scales.
  5. Developing final BARS instrument — A subset of the incidents is used as a behavioral anchor for the final performance dimensions. Finally, a BARS instrument with vertical scales is drawn to be used for performance appraisal.

BARS method of performance appraisal is considered better than the traditional ones because it provides advantages like a more accurate gauge, clearer standards, better feedback, and consistency in evaluation. However, BARS is not free from limitations. The research on BARS indicates that it too suffers from distortions inherent in most rating scales.

2. Management by Objectives (MBO)

This method was more popular in the writings of Peter F. Drucker as a potentially a powerful philosophy of managing and an effective way for operational zing the evaluation process. It seeks to minimize external controls and maximize internal motivation through joint goal setting between the manager and the subordinates and increasing the subordinate’s own control of his work. It emphasizes on goals and outcomes, rather than methods. The goals are set mutually by officer and the employee. It is used frequently due to its concentration on results. Employees and their officers have a clear understanding of job objectives, performance criteria and task priority. This method consists of five basic steps as follows:

  1. Set organization goals — Establish organization’s wide strategy and goals. Such goals are expressed clearly and concisely and can be measured accurately.
  2. Joint goal setting — Establish short-term performance targets between the management and the subordinates.
  3. Performance review — Organize frequent performance review meetings between the mangers and the subordinates.
  4. Set check-posts — Establish major check-posts to measure progress and direct the human efforts towards goal.
  5. Feedback — Provide frequent feedback to concern employees and motivate them to improve performance.

There are many advantages with MBO method of performance appraisal. It helps and increases motivation of employees. It also reduces role conflict and ambiguity. The process of implementing the MBO methods identifies problems better than earlier. Besides advantages, the method suffers from some limitations. It is more time consuming and also develops lack of trust.

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3. Assessment Centers

The introduction of the concept of assessment centers as a method of performance method is traced back in 1930s in the Germany used to appraise its army officers. The concept gradually spread to the US and the UK in 1940s. The concept of assessment center, traveled from the army to business arena during 1960s. This method measures an employee’s knowledge and skills (competency) by assessment centers. The centers headed by full-time personnel who are regularly assessing employees’ knowledge and skills continuously and sending feedback to respective performer. Another recent trend is that instead of individual appraisal, trends are towards a review of the performance of the team as a whole. The distinct advantages of the assessment center provide include more accurate evaluation, minimum biasedness, right selection and promotion of executives. The method is also plagued by certain limitations. It is relatively costly and time consuming, causes suffocation to the solid performers, discourages to the poor performers, breeds unhealthy competition among the assesses, and bears adverse effects on those not selected for assessment.

4. 360 Degree Appraisal

This is a systematic collection and feedback of performance data on an individual or group, derived from a number of the stakeholders in their performance. Ti is done in a systematic way via questionnaires or interviews. This formalizes people’s judgments coming from natural interactions they have with each other. There is both a collection and a feedback process. Data are gathered and fed back to the individual participant in a clear way designed to promote understanding, acceptance and ultimately changed behavior.

This method is generally used for ascertaining training and development requirements, rather than for pay increases. Under this method, staff skills, abilities and behavior, is collected ‘all round’ a staff i.e., form his/her supervisors, staffs, peers, and even customers client and also with whom he interacts in the course of his job performance. All these appraisers provide information or feedback on an employee by completing survey questionnaires designed for this purpose. All information so gathered is then compiled through the computerized system to prepare individualized reports.

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