Methods of Performance Evaluation

There is no single effective method of performance evaluation. There is no easy way of classifying all of the various kinds of performance evaluation methods. Following are the methods of performance evaluation.

1. Ranking Method

It is a simple process of placing employees in a rank in order to observe job performance. It permits comparison of all employees in any single rating group regardless of the type of work. All workers are comparing an individual’s performance with the definition of satisfactory or excellent performance. Under ranking system of performance appraisal, subordinates are rated on an overall basis
with reference to their job performance instead of individual assessment of trait. In this way, the best is placed first in the rank and poorest occupies the last rank.

Merits of Ranking Method: The ranking system is simple, natural and useful when the number of employees evaluated by the same superior is small. It can be used when ratters are unfamiliar with problems of appraisal or cannot execute the more complicated procedures.

Demerits of Ranking Method: Comparison of the various components of a person’s performance is not done. People are compared as a whole.
  • The magnitude of differences in ability between ranks is not equal at different position.
  • It is highly subjective.

2. Paired Comparison Method

The use of ranking method is difficult in large groups when the rate cannot compare several people simultaneously. In the paired comparison, every employee in a job is compared with all other employees in the group. Pairs of employees are constituted to determine which is the better worker in each pair. For instance, if there are three workers (X, Y & Z) in a job group, there will be three pairs namely x, y with z and x with z. the numbers of pairs can be determined by the formula n(n-1)/2, where n is the number of persons to be compared. The ‘scores’ of pair wise comparisons are tabulated and a rank is assigned to every employee on the basis of the number of times a person is considered superior on these scores. The paired comparison method gives a more reliable rating than the simple ranking method but the plan complicated when the number of employees in the group is large.

3. Graphic Rating Scale Method

The graphic method of rating is the most commonly used method. The employees are rated on personality characteristics and performance. The ratter is provided with a printed form for each employee to be rated. The characteristics factor s vary according to the position of the man to be rated. For a worker, rating is based on job knowledge intelligence, dependability, industriousness, quality of work etc. while for management personnel rating should be based on leadership qualities, creative abilities, organizing ability, communication skill, power of judgment etc on the basis of the above individual qualities and characteristics. An overall assessment has to be made in terms of the following ratings:
Graphic Rating Scale
Excellent rating is given only when the person is completely mastered his present job and can perform it without supervision. A person who qualifies for the excellent rating is ready for promotion. Above average rating is given when performance of a man is terms of a higher output or better quality or lesser time is above the expected standards. If this failure is due to some defects in the employee, corrective action should be taken to remedy them.

4. Forced Distribution Method

Under this method, the rates rate the man on over all job performance. The name of each employee to be rated is typed on a 3”x5” card. The rather is then asked to distribute the card into five piles which may be labeled low. Low average, average, high average and high such that 10% of the men are rated low, 20% low, 20% Low average, 40% average, 20% high average and 10% high. Research shows that this is quite a reliable method of rating employees.

5. Checklist Method

Under this method of merit rating, a list of necessary qualities for the performance of a job is prepared. The qualities of all the employees are measured on the basis of the abilities of such lists. If one employee posses that quality, the sign of (+) is marked in the list. If that quality are not possessed by on employee the sign of (-) is marked in the list. If there are a doubt regarding it, the sign of (?) are marked in the list. On the basis of these signs, the abilities of an employee are evaluated. The specimen of checking list of merit rating is as follows.
  • He tends to keep comfortably ahead of his work schedule (+) 
  • He is good steady worker (?) 
  • He is making exceptional progress (+) 
  • He is weak on planning

6. Field Review Method

This type of performance evaluation is useful for organizations and appears to overcome a number of the weakness found are many of other systems. It consist of having a trained employee form the personnel department interview line supervisors about their respective subordinates. The supervisor is asked to give his opinion about the progress of his subordinates, the level of performance of each subordinate and possible plans of action in cases requiring further consideration. The representative of the personnel department takes detailed notes of the interview. These notes are approved by the supervisor and placed in the employee’s personnel folder. The success of this system depends on the competency of the interview. If this man knows his business, he can contribute significantly to reasonably accurate appraisals. Moreover, he can help the supervisor think through his evaluations, so that bias and prejudice can be merely readily managed.

7. Confidential Report Method

In this method each employee is rated confidentially by one or more senior officers for his performance. A confidential report by immediate supervisor is stills a major determinants of the subordinate’s promotion or transfer. This report deals with the year’s work and general opinion of the ratter towards the employee. The main problem with this method is that it is not date based and the appraisal is done on the basis of impressions.

8. Assessment Center Method

An assignment center is an multiple assessment of several individuals performed simultaneously by a group of trained evaluators using a variety of group and individual exercises. Typically individuals from different departments are brought together to spend two or three days working on individual or group assignment similar to ones they will be handling if they are promoted. The pooled judgment of observers leads to an order of merit ranking for each participant.

9. Forced Choice Method

To use this method, many pairs of statements about job performance of men are selected. Each pair consists of statement expressing equally/ favourable unfavourable things about a man. These statements are then printed on a form in groups of four (a group four is called a tetrad such that two of the four statements are favourable and two others are unfavourable). The ratter is asked to check two of the four statements-the one that best and the one that ‘least’-describes the man being rated. An example of a tetrad is given below.

10. Management by Objectives Method (MBO)

The latest development in the field of performance appraisal is appraisals by results. Result oriented appraisals are the outcome of the modern management technique known as management by objectives or MBO. MBO has been described as a philosophy of management which seeks to minimize external controls and maximize internal motivation through joint goal setting between the manager and the subordinate and increasing the subordinate’s own control of his work. Management by objectives can be described as process whereby the superior and subordinate managers of an organizations jointly identify its common goals, define each individual’s major areas of responsibility in terms of results expected of him and use these measures as guides for operating the unit and assessing the contributions of each of its members.
Forced Choice Method
Objectives: MBO is intended primarily 
  1. To foster the increasing competence and growth of the subordinates. 
  2. To serve as a device for organizational control and integration. 
  3. To measure and judge performance. 
  4. To serve as a basis for judgments about salary and promotion. 
  5. To stimulate the subordinates ‘motivation’. 
  6. To classify both the job to be done and the expectations of accomplishment. 
  7. To enhance communications between superior and subordinates.
The MBO process consists of following steps:

MBO Process
Step – I Joint Goal Setting: In this step, the management in conference with subordinate, formulate clear statements of objectives.

Step – II Action Planning: It involves developing realistic action plans to attain the goals already established.

Step – III Self Control: It means systematic monitoring and measuring of performance by having the individual review his own performance.

Step –IV Periodic Progress Review: It involves corrective action when behavior deviates from the established standard.

Thus, the MBO needs a clear cut definition of the specific goals expected to be achieved by the subordinate as well as a measurement of the actual achievement of such goals by the subordinates. The goals should be tangible, measurable, verifiable and quantifiable.

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