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1. Proper Evaluators: The performance appraisal should be conducted by those who are experienced, qualified, matured and honest If necessary, proper training may be given to the evaluators so that the performance appraisal is fair and justified. If possible, performance appraisal needs to be undertaken by more than one person. Proper Timing : Performance appraisal must be conducted periodically. It is advisable to conduct performance appraisal at least ' twice in a year. If possible, performance appraisal .may be undertaken quarterly or every three months. Proper Feedback: The performance appraisal reports should be made known to the personnel. This will enable them to know their strengths and weaknesses. Accordingly, personnel may take corrective steps to correct their weaknesses and to consolidate their strengths. Proper Weightage : Proper weightage should be given to various performance factors. Certain factors such as creativity may require higher weightage as compared to quantity of work. The weightage given to the factors depends upon company to company and from one job to another. Provision of Appeal: There must be a mechanism for appeal, if an employee disagrees with a supervisor's appraisal. In other words there must be a systematic procedure to appeal against the performance appraisal reports. The procedure must be made known to the employees. Defined Job Dimensions: There should be clearly defined dimensions of job performance rather than undefined general measures of job performance. This facilitates systematic appraisal of the employees. Behaviour Based Dimensions : Performance dimensions should be behaviourally based and ratings should be supported by objective observable behaviour. Performance Appraisal Policy : There should be a formalised, standardised and objective performance appraisal policy. Everyone in the organisation shotild be made known about the performance appraisal policy. Reliability : The performance appraisal must be reliable. For any given employee, appraisals made by several raters working independently of one another should agree closely.









10. Easy to Administer : The performance appraisal system must be practical. It should be easy and convenient to administer and at the same time it should serve the purpose. PURPOSES AND USES OF PERFORMANCE APPRAISAL In general, performance appraisal serves a two-fold purpose. The purpose could be either/or evaluation (judgemental) or for development (helping):

It may also serve as a source of satisfaction and motivation. when necessary. They wish to have such information not only for the personal satisfaction but also to help them improve performance in order to qualify for organisational rewards such as promotions and merit pay. as well as how they can do better in future. Deficiencies in performance may be attributable to inadequate knowledge or skills. the organisation may decide to provide additional training to the employees. coaching. 3. Specifically. accurate. Performance Feedback : Most employees are interested to know as to how well they are doing at present. Counselling. The developmental objectives include : Diagnosing individual and organisational strengths and weaknesses. demotion. promotion. The evaluation objectives include : Provision of feedback to subordinates to know where they stand. understandable and presented in an atmosphere of cooperation and support can improve the quality of employee's future performance. etc. performance appraisals serve the following purposes : 1. Performance feedback. For managerial personnel. Validation of Selection Process : Performance appraisal provides a means of validating both internal (promotions and transfers) and external (hiring new employees from outside sources) selection . timely. that is specific. Employee Training and Development Decisions : Performance appraisal information may be used to determine whether an employee or a group of employees requires additional training and development. planning and budgeting and so on. a guide to the adjustments for performance improvement. the performance appraisal process may point to the need for additional development as a means of improving current job performance in areas such as supervisory techniques. 2. placement. career planning and motivation of subordinates. 2.1. Developing valid data for personnel decisions concerning pay. and Developing close and coordinated relations between the superior and subordinates. and. Accordingly.

interviews. employee merit (as measured by performance appraisal) is also an important factor. . As with promotions. Maintaining Good Management-Labour Relations : Performance appraisal also helps to maintain good labour relations between the management and the labour. This is more true in the case of managerial jobs and also in the case of employees in non-unionised organizations. Human Resource Planning : The appraisal process aids in human resource planning. Performance appraisal is useful in effecting transfer decisions. Organisations spend a good deal of time and money recruiting and selecting employees. transfers often involves changes in job responsibilities and it is important that employees capable of assuming such responsibilities be clearly identified. A proper performance appraisal determines the validity of the various selection devices and accordingly the company may only follow selective and suitable tests and other selection devices to recruit employees in future. Pay rise. This is because performance appraisal creates a healthy atmosphere in the organization. laid off or terminated. If there is no performance appraisal. 8. Although pay rise is a function of increases in cost of living. productivity. Identification of employees who can be transferred is possible through the reports of performance appraisal. A manager may be groomed for a higher level position if the performance appraisal reports indicate that the potential exists for him to perform well at higher position. Employees may be ordered for layoff. 7. if the need arise. 5. A means of past appraisals.programmes. Lay-off decisions: Performance appraisal is a better means in finalizing lay-off decisions. 4. Promotions : Performance appraisal gives management a means of identifying employees for promotion. then there are chances that the last but the best men in the department may be laid-off. The weakest performers are the first to be laid-off. Distinguishes Effective and Ineffective Performers : Performance appraisal helps to distinguish between effective and ineffective performers. Various tools used in the selection process are application blanks. and the financial condition of the organization. transferred. as well as a standard of comparison with his peers. Accurate and current appraisal data regarding employees may provide management with important information on which to base decisions for future employement. seniority. Effective performers can be promoted or they may be rewarded with higher pay and incentives. management is at a severe disadvantage with respect to framing various employment plans for the future of the organization. Compensation decision : Performance appraisal may also be used to compensate the employees in terms of increased pay and other incentives. when based on merit. 10. will enable management to select persons for promotion more intelligently. brings a message to the employee regarding his value to organization. demoted. 9. psychological tests. together with other background data. Necessary guidance or training can be given to ineffective performers. etc. Such tools are used to predict probable applicant's performance on the job. The better performers are often rewarded with merit pay. The effective employees are motivated to perform better and better and the ineffective employees are encouraged to do away with their weaknesses or limitations. 6. Without the knowledge of who is capable of being promoted.

This results in overall lower rating of the employee concerned. even though the ratee does not deserve such high scores. where all employees are rated too severely or strictly where very low scores are given. if a rater is unfamiliar with a rate.11. 7. Personal Bias : The way an appraiser personally feels about a ratee may drastically affect the appraiser's objectivity. 6. even without assessing such characteristics of that person. 3. Effetive Communication : Appraisal interviews and reports can be very effective means of communication to the employee and can result in improved performance. Higher Morale of Employees : Performance appraisal improves morale of the employees as they are aware that their services are recongnised and rewarded by the management. creativity and so on. where a rater assigns mostly middle range scores or values to all individuals being appraised. For instance. 4. Spillover Effect: In this case. if the rater has good relations or connections with the ratee. if forced to evaluate. Paper Work: Some supervisors complain that performance appraisal is pointless paper work. 13. 14. the present performance appraisal is greatly influenced by past performance. Problem of Leniency or Strictness : Many reters are too lenient in their ratings. the raters may evaluate on the basis of one negative quality or feature perceived. performance appraisal reports are found only in the files rather 5. than the rater may also give him high scores in respect of other traits. 2. Extremely high or low evaluations are avoided. 1. such as intelligence. counsel and assist employees in their career development. This is especially true in the case of unionised organisations. even without assessing such as intelligence. he usually may play it safe by neither condemning nor praising. Usually central tendency is caused by lack of information. creativity and so on. Also a reverse situation may take place. . Horn Effect : At times. LIMITATIONS OF PERFORMANCE APPRAISAL Halo Effect : The rater may base the entire appraisal on the basis of one positive quality or trait which was assessed earlier. Again. if a person is evaluated on one trait „emotional ability‟ and if he scores very high in the case of emotional ability. Grievance & Discipline Programmes : Performance appraisal reports can be used as an important documentary evidence in case of disciplinary action taken against some ineffective Employees. He must be lazy at work too! Central Tendency : There are instances. Career Development : Performance appraisal enables managers to coach. regardless of merit. 12. he may always tend to give higher scores to the ratee. "A person who has not done good work in the past is considered to be bad at work at present also. Such problems arise because of varying performance standards among appraisers and because of different interpretations of observed employee performances and behaviour. 8. Latest Behaviour: Rating is influenced by the most recent behaviour ignoring the commonly demonstrated behaviour during the entire appraisal period. They complain so. because many-a-times. Thus outright bias may lead to favoured treatment for some employees. “He does not shave regularly. Again. High scores may be assigned to all employees.

measurable. Performance standards depend upon the objectives of the appraisal i. supervisors tend to give above average ratings to below average performers. it is the person being evaluated rather than his performance. 11. attainable. PROCESS OF PERFORMANCE APPRAISAL (EVALUATION) Inorder to conduct systematic and effective performance appraisal. realistic and time-bound. serving any practical use.than . Setting Performance Standards Communicating Standards Measuring Performance Comparing with Standards Discussing Results Listing Corrective Measures Implementation Review 1. 9. In reality. Fear of Spoiling Relations : Performance appraisal may also affect superior-subordinate relations. they are conducted just as a formality or for name sake. rather than on the person. Some appraisers may select the most convenient and simple technique rather than the more suitable but time consuming or inconvenient technique. 13. The performance standards should be specific. These standards should be carefully indicated on the appraisal form. . Others may be time consuming. but it probably is not a reflection of a basic character fault. to appraise actual performance on the present job or to judge potential for higher jobs. • Falling short of expectations calls for renewed effort or a change in tactics. In other words. etc. Fear of Losing Valued Subordinates : Fairly low ratings may be given by the departmental heads to valued or important subordinates so that they will not be promoted out of the rater's department. the performance appraisal reports are not put to use by some organisations as. As appraisal makes the superior more of a judge rather than a coach. 10. extraordinary efforts. The Problem of Appropriate Technique : There are a number of evaluation techniques.e. so as to avoid confrontations with the latter. First Impressions : Raters may identify some specific qualities of the ratee and quickly form an overall impression about him. Setting Performance Standards: The process of performance appraisal begins with job analysis. Some techniques may be easier and economical to use. the following steps should be followed. Job analysis helps in establishing performance standards. 14. new ideas.output. inconvenient and costly. the subordinate may look upon the superior with a feeling of suspicion and mistrust. It is to be noted that failure is an event and not a person. Fear of Confrontations: Sometimes. Violation of the Cardinal Rule: A cardinal rule that is often violated is that the focus of evaluation should be on the performance . which includes job description and job specification. 12.

The standards should also be ! conveyed to the evaluators. He must also find out whether the corrective actions taken have helped to improve the performance of the employee. This will help to consolidate the strengths and overcome the weaknesses of the employees. 5. The most common methods can be broadly divided into two groups as follows: METHODS OF PERFORMANCE APPRAISAL Check List Confidential Reports Critical Incident Method Ranking Method Graphic Rating Scale Narrative Essa TRADITIONAL METHODS Role Analysis Assessment Centres MBO BARS Psychological Appraisal HRA MODERN METHODS TRADITIONAL TECHNIQUES . For instance. Review: The appraising authority must find out whether the corrective measures suggested are implemented or not. the most appropriate and suitable measure may be selected for implementation. The discussion will enable an employee to know his weaknesses and strengths. the next step is to measure the actual performance. METHODS / TECHNIQUES OF PERFORMANCE APPRAISAL There are several methods or techniques of performance appraisal. the following factors should be considered for its implementation: Duration of training programme Contents of training Method of training etc. if training and development is selected as a corrective measure. Positive deviations occur when the actual performance exceeds the standards. Measuring Performance: Once the standards are communicated to the employees. Discussing Results: The results of the appraisal are communicated to and discussed with the employees. The evaluator can use the following techniques for measuring the actual performance of the employees : Management By Objectives Assessment Centres 360° Appraisal. Comparing with the Standards: Actual performance is compared with the predetermined performance standards.2. 8. Listing Corrective Measures: The next step is to list corrective measures. Negative deviation is indicated when there is excess of standard performance over the actual performance. which includes Training and development Coaching and counselling Firing and warnings. etc. Such comparison will reveal the deviations which may be positive or negative. 4. 3. etc. Implementation: Out of the listed corrective measures. 6. 7. Communicating Standards: The next step is to communicate and explain the performance standards to the employees so that they come to know what is expected of them.

6. Ranking Methods : There are various ranking methods which are commonly used to evaluate the performance of the employees. Graphic Rating Scale : In this method. dependability. . Check List : In this case. promotions. and less expensive. Critical Incident Method : In this case. The ranking methods used are: (a) Simple ranking method. Excellent Good Average Poor The graphic scale method is simple to understand. Confidential Reports : This is an old and traditional method of appraising employees. the rater must be very familiar with the job behaviour of the employees. Narrative Essay : The most simplest method is the narrative essay. when certain incidents that take place have a direct bearing on the performance of the employee. For instance. quantity of work. the supervisor gives a brief report of things which employees did that were particularly effective or ineffective in accomplishing their jobs. together with suggestions for improvement.1. there is lot of paper work and there are chances of rater bias. MODERN TECHNIQUES 7. A confidential report is a report on the subordinate by the immediate superior and covers a limited range of aspects such as the employee's strengths. The following is an example of graphic Quality of Work Quantity of Work Dependability 5. the raters use a graphic scale to appraise certain specific factors such as quality of work. the rater describes in detail an employee's strengths and weaknesses. Ranking methods offer convenience to evaluate the performance and they are less time consuming. The greatest advantages are its simplicity. less time consuming. a list is prepared containing various statements relating to employee's behaviour on the job. However. Role Analysis : Role analysis is a process of analysing the role of a manager in relation to roles of other managers or members who are affected by his performance. 4. etc. If essays are written well. The sales supervisor may record such incident in the performance appraisal of the salesman. Naturally. There are times. (c) Paired comparison method. In this. The greatest drawback is that the statements are structured and it lacks the depth of critical incidents and essays. The rater indicates the individual performance by checking yes or no squares to various statements. easy to conduct and less time consuming. This was made possible because the salesman used his patience and tact to convince the rude and suspicious customer to buy the product. (b) Alternation ranking method. major failures or achievements and information on some personality traits and behavioural aspects. they can give detailed feedback to the subordinates in respect of their performance. 2. weaknesses. a salesman may overcome a suspicious and rude customer and finally effects a sale to the satisfaction of the customer. and potential. The confidential report is used for a variety of personnel decisions such as transfers. 3. convenience. etc.

Jointly frame plans. subordinates and peers of the employee. Assessment Centers : This technique is used more so in the case of selection rather than performance appraisal. There is joint review of plans. Psychological Appraisal Method : Psychological appraisals are conducted to find out the employees potential. 12. and with moral duties and obligations. management games. The subordinate manager implements the plan. especially belonging to managerial ranks. the process involved is as follows: The superior and subordinate managers of an organisation jointly define common goals. now-a-days. 9. Employee performance can be taken as positive when contribution is more than the cost and vice-versa. Psychological Tests. etc. In this case. Ethics in appraisal guides the action of the appraiser as well as the appraisee. The focal role can make necessary changes to improve his performance. Consultations and discussions with the employee. 2.The role set members can conduct performance appraisal of the focal role. the actual performance is measured against planned performance. There are other employees who may tend to develop a negative attitude or behaviour towards their job and as such they may make least efforts to upgrade and update their knowledge and skills to perform their activities. whereby. b) Human Skills. and they make every effort to upgrade and update their knowledge and skills to handle their activities. The cost of the employee includes cost of recruitment. 11. Ethics is a science of morality that guides and helps to achieve objectives through legal and moral means. Evaluation of the employee is conducted in the areas of a) Conceptual Skills. some firms use this technique in performance appraisal. oral presentations. Employee contribution is the money value of employee service which can be measured by labour productivity or value added by human resources. However. especially at the time of promoting managers to higher levels. etc. Human Resource Accounting (HRA): HRA deals with cost of and contribution of human resources to the organisation. 3. Psychological appraisals consists of: a) b) c) d) e) In-depth interviews. 10. 1. Reviews may be taken from others like clients about trie employee. induction. Management by Objectives (MBO) : This technique is also used to measure the performance of employees. 4. There are employees who have a positive attitude towards the job. selection. and such other various exercises. compensation. . the behaviour or attitude towards the job is appraised. In this case. The ratees are subject to various psychological tests. The ratees are asked questions and accordingly judged by the raters. Behaviourally Anchored Rating Scale (BARS) : It is a variation of simple graphic scale. training. 8. Consultations and discussions with the superiors. c) Technical Skills. ETHICS OF PERFORMANCE APPRAISAL Ethics is a social science that deals with what is good and right.

He must collect complete and relevant information about the ratee to conduct effective performance appraisal. II. The reports should enable the employees to know their strengths and weaknesses Accordingly. I. The employee traits such as 8. The prdcedure for mechanism for appeal should be made known to the employees. ETHICS ON THE PART OF APPRAISEE The appraisee should consider the following with respect to his appraisals: 6. 5. he may make an appeal against the performance appraisal reports. it would result in faulty performance appraisal. The weightage given to the factors depends upon company to company and from one job to another. Attitude Towards Ratings : The employee should have positive attitude towards the ratings as assigned to him by the rater. MERIT RATING Merit rating is a narrower term than performance appraisal. then. managers used to evaluate the qualities of an employee for compensation and promotion decisions. 4. Certain factors such as creativity may require higher weightage as compared to quantity of work. 1. . Adequate Information: The appraiser must not conduct performance appraisal for the sake. even though the ratee does not deserve such high scores. In the past. 3. The reports should place emphasis on performance improvement areas and not on punishment or penalty to employees. Such outright bias results in defective evaluation. He should focus on improving his performance. He should not criticize the rater's remarks but should have the spirit of correcting his weaknesses. ETHICS ON THE PART OF APPRAISER The appraiser should maintain ethics while evaluating the performance of the appraise. He must avoid personal bias while rating the performance of the appraisee. Correct Information : The appraisee must provide correct and adequate information to the appraiser for proper conduct of performance appraisal. If the rater has good relations or connections with the ratee. 2. The appraisal report prepared by the several raters for the given employee must closely agree with each other. The appraiser must know the performance based information and behaviour based information of the ratee. employees may take steps to consolidate their strengths and correct their weaknesses. If he disagrees with the rater. Proper Weightage : The appraiser must give proper weightage to various performance factors. Proper Feedback : The performance appraisal reports should be communicated to the concerned employees. Objective Evaluation : The rater must evaluate the ratee's performance objectively. If the information provided is false or inadequate. he may always tend to give higher scores to the ratee.I. ETHICS ON THE PART OF APPRAISER 129 The appraiser should maintain ethics while evaluating the performance of the appraisee. For any given employee. 7. Avoid Confrontation : The ratee must avoid confrontation if he receives unfavourable remarks from his rater. . then. Reliability : The performance appraisal conducted by the rater must be reliable. the rater may work with several other raters independently to find out the accurate appraisal report of the given employee.

such as qualification. The performance of an employee does not merely depends on the traits of the employee but it also depends upon other factors. For instance. Subordinates : The subordinates could be asked to rate the performance of his superior.) RECENT TRENDS IN PERFORMANCE APPRAISAL The following are the recent trends in performance appraisal: I. 1. the student may be asked to rate the performance of his teacher. It lays emphasis on input rather than on output. 2. The various parties include superiors. Immediate Superior : Generally speaking. The purpose is to help an employee to review and control his own performance and to initiate efforts for self-development. employees are evaluated by their immediate superior. Hence. 4. . training. The concerned employee may be asked to appraise his performance. 3. Self-assessment : There can be self. Merit rating focuses to measure what an employee is (traits) than what an employee does (performance). METHODS OF MERIT RATING The common methods used for merit rating are basically the traditional methods of performance appraisal. were compared with others and accordingly ranks or ratings were assigned to them. 6. 5. Check List Confidential Reports Critical Incident Method Ranking Method Graphic Rating Scale Narrative Essay (The explanation for the above points have been explained earlier in this chapter. etc. 360° APPRAISAL The 360 degree appraisal is a systematic feedback of performance of an individual or a group in an organisation by a number of stakeholders or parties. dependability. 3. subordinates. more recently emphasis has been given to measuring the results of the employee's performance.initiative. experience. etc. They are : 1. 2.assessment. personality. honesty. etc. since he has the most accurate and direct information on the work performance of the subordinate.

 Increasing emphasis on quality of performance. The customers expect better and improved products and services at all times. Customers: The customers or clients can also undertake performance appraisal of the employees with whom they interact. The feedback given by customers can be utilized to improve strengths and to minimize weaknesses of the employees. This is considered useful particularly in work situations where team work matters most.4. 5. The focal role is the manager whose role is to be analysed.  The need to maintain excellent team work for effective results. Identification of Key Position (Focal Role) : The first step is to identify focal role. Apart from the above six parties performance appraisal can also be conducted by :  Appraisal Panel  Consultants . Top Management: Top management normally may rate the senior or middle level executives who directly report to them. where only the fittest can survive. The customers are in a better position to give a feedback on the performance of those employees with whom they come into contact during the course of business transactions.  The cut throat competition in business. especially at the managerial levels. a police officer cam rate his partner who normally accompanies him on duty.  Personnel Department The 360 degree appraisal has become popular recently because of:  The changing expectations of the customers or clients. The following is the process involved in role analysis : 1. especially at higher levels to know of their strengths and weaknesses. ROLEANALYSIS Role analysis is a process of analysing the role of a manager in relation to roles of other managers or members who are affected by his performance. II. For instance. Peers : Peers or colleagues can rate each other's performance.  The openness of employees. . 6.

In this discussion. Management By Objectives (MBO) 8. Role Consensus : The discussion leads to role consensus which the focal role needs to undertake. For instance. they compare the two lists of expectations and contributions. II.Reduction in bad debts. define each individual's major areas of responsibility in terms of the results expected of them and use these measures as guides in operating the unit and assessing the contribution of each of its members. attitude. 4. 7.e.Reduction in wastages of raw material. which will lead to more and better results. Such critical attributes enable the focal role to perform his role effectively. Proper performance in key areas would enable the focal role to achieve individual as well as group objectives. marketing manager and so on. 5.Increase in market share of a product. Finance Manager . Identification of Critical Attributes : The role set members may be asked to indicate the critical attributes in the areas of knowledge. It is a fact that more of their involvement will result in more commitment. 3. The role set members are the various members in the department or organisation with whom the focal role has to interact to accomplish goals. The role consensus is arrived only after a good discussion on the expectations and contributions as stated in the two lists. The following are the some of examples of key performance areas : For R & D Manager . The members so identified are called Role Set Members..the role set members. and contributions to the Focal Role. focal role and the role set members identify 'key performance areas' in which the focal role needs to concentrate.2. In the words of George Odiorne. Review of Performance : The performance of the focal role is reviewed either by the superior of the focal role or by the role set members or any other appraising authority. skills. MBO involves subordinate managers' participation in planning and controlling activities. Listing out Expectations and Contributions: The Focal Role (Role Holder) has to write down his expectations from and his contributions to the Role Set Members. the production manager has to interact with the purchase manager. The concept of MBO was popularised by Peter Drucker in 1950s. Identification of Key Performance Areas : The group i. Discussion : The focal role and the role set members hold discussion. The Role Set Members also have to write down their expectations from. R & D manager. and behaviour required for the focal role. 6. For Marketing Manager . Identification of Role Set Members : The next step is to identify.Design and development of a product." PROCESS OF MBO: MBO process generally involves four stages: . MBO is defined as "The superior and subordinate managers of an organisation jointly define its common goals. Necessary feedback is provided to the focal role so that he can correct his weaknesses and consolidate his strengths. Production Manager .

the subordinate reviews his performance by comparing against the planned targets. 5. ADVANTAGES OF MBO 1. . At the performance review.1. marketing. Collectively monitoring performance : In the final stage. Aid in planning : MBO system determines achievable targets for subordinate managers after careful consideration. organising. the next step is selection of the best feasible plan. 2. Better utilisation of resources : MBO system facilitates optimum utilisation of physical. directing and controlling while handling their individual tasks. he may take the assistance or guidance in the implementation of the plan. The goals are set in Key Result Areas (KRAs). Normally. Collectively formulating action plan : After setting goals. Development of personnel : Subordinate managers develop good skills in planning. For instance. which the subordinate needs to achieve. the subordinate manager along with his superior formulates an action plan(s) to achieve the goals. the superior and subordinate may frame alternative plans. financial. Selection of the best plan : After cost-benefit analysis of the alternative plans. 3. such as in the area of production. If deviations occur. 3. If required. 4. 6. etc. the superior acts as a coach or a guide rather than as a judge to take stock of the results. ³e 2. and human resources towards the achievement of goals. Collectively formulating goals: The superior and subordinate jointly decide and formulate goals. Proper and clear targets enable them to design feasible plans for the organisation. They conduct cost-benefit analysis of each and every alternative. Evaluating the alternatives : If alternative plans are framed. the superior and the subordinate once again frame objectives. the superior and subordinate manager have to evaluate the alternative plans. The superior and subordinate manager would select the best plan that gives maximum benefits at minimum costs. This enables the company to promote subordinate managers to higher posts as and when such need arise. the goal for the marketing manager can be "To increase market share of a brand from present 10% to 15% during a particular period. Implementation of the plan : The subordinate implements the plan by making optimum use of the resources.

reports. It requires a large number of forms. Dominance by superiors: The superiors may dominate while setting goals. best known to superiors. goals are set in KRAs. the organisation structure is subject to periodic review and. Human Resource Accounting (The above V} Viand VIIpoints have been explained earlier in this chapter. V. Wasteful activities are avoided. 5. instruction manuals. Behaviourally Anchored Rating Scale (BARS) VI. DISADVANTAGES OF MBO MBO is subject to certain limitations as follows: 1. (d) MBO (April 2010) Assessment centers (f) Self appraisal (April 2008) Ethical aspects of employee appraisal (April 09) What are the requirements of effective performance appraisal system ? Explain the uses and purposes of performance appraisal. (a) (c) (e) (g) 2. Better Team Work : There is always an interaction between the superior and the subordinate in setting goals. Concentration on KRAs: In MBO. rewards often fall short of efforts and this frustrates the subordinates. 2. if necessary changed to suit the needs of the company. Objective Evaluation : MBO facilitates objective evaluation of subordinate managers. Rewards may not match with efforts : For various reasons. there is a possibility of class of subordinate's goals with those of other individuals or departments. Problem in goal setting: Many problems need to be sorted out before each subordinate agrees with his boss on goal setting. Paper Work : MBO involves lot of paper work. 3.) REVIEW QUESTIONS Explain the following terms and concepts : Performance appraisal (Oct. 3. MBO is result oriented : MBO places emphasis on Results and not just on activities. since performance is measured against results. 7. 6. 5. Time consuming : MBO system consumes a lot of time right from goal setting to monitoring of performance and then re-setting of goals. Psychological Appraisal VII. rather than on personality traits. . OR 1. Sound Organisational Structure: In MBO system. and in monitoring performance. etc. Activities are directed to attain the goals set in KRAs. This develops good relations and they work as a team. 8. Clash in objectives : At times. framing action plans and in monitoring performance. 4.4. 08) (b) Merit rating Role analysis . 6. It links evaluation process directly to performance.

) Explain the different methods of performance appraisal commonly used in recent times. how.Appraisal.07) (Hint: Explain modern methods of performance appraisal) Is performance appraisal required ? Why ? (April 11) 12. 11. 8. Role Analysis. 6. (April 07) OR What is the use of performance appraisal in today's complex organisation ? (Oct. (Apr. 5.09) What are the steps involved in the performance evaluation process ? OR Write a short note on process of performance appraisal. 09) 4. (Oct. Assessment Centre) Write short notes on : (a) Role analysis (b) MBO (c) Ethics of appraisal Mention any four methods of appraising the performance of individuals.“Performance appraisal is significant in all organisations. they help in maximising the potential of the employees. (Hint: Briefly explain 360°. 10. Explain.” Explain the statement. 9. (April 2008) (Hint: Explain any four methods of performance appraisal and then briefly explain its uses. (April 07) What are the different methods of performance appraisal ? What is merit rating ? What are the methods of merit rating ? Explain the recent trends in performance appraisal. 7. What are the limitations of performance appraisal ? State and explain the merits and demerits of performance appraisal. . 13.