Literature review on performance appraisal

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I. Contents of getting literature review on performance

appraisal
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Performance appraisals are one of the most frequently criticized talent management practices.
The criticisms range from their being an enormous waste of time to their having a destructive
impact on the relationship between managers and their subordinates.
Criticizing performance appraisals has a long history. For decades, the literature on talent
management has pointed out the flaws in most performance management systems and in some
cases recommended completely abandoning them. The problem with abandoning them is that
they are vital to effective talent management.
I cannot imagine a company doing a good job of managing its talent without gathering
information about how well individuals perform their jobs, what their skills and knowledge are,
and what their responsibilities and performance goals are for the future. These types of data are
simply fundamental to the effective management of the talent of any organization (and to its
overall management).
A decade ago, I did a study on performance management in over fifty firms and found that every
firm had a performance management system. In some cases they were functioning reasonably
well. There were, of course, organizations that did not have an effective system and were saying
that they expected to either redesign their system or cease doing performance appraisals. The
latter is what you would expect organizations to do if they followed the advice of many of the
critics of performance appraisals.

Recently, I took another look at whether organizations are doing performance appraisals. The
results of the survey of one hundred relatively large U.S. corporations provide some interesting
data on whether organizations are doing performance appraisals. The bottom line is that every
company responded that they do have a performance management system, and only six percent
said that they are considering getting rid of performance appraisals for some or all of their
employees. In short, the death of performance appraisals is not occurring and is unlikely to
occur.
Companies reported that on average ninety-three percent of their salaried employees receive a
performance appraisal, and typically they receive at least one every year. Only one company
reported that they had recently stopped doing evaluations for fifty or more of their employees.
The survey did find that, on the average, companies are not more satisfied with their
performance management systems than they were ten years ago. However, the vast majority,
about eighty-five percent, report that their system is at least moderately effective.
The obvious conclusion is that companies will continue to do performance appraisals despite
their shortcomings and despite the many criticisms of them that appear in the management
literature. In my opinion, organizations have no choice. Instead of wasting our time debating
whether to eliminate performance appraisals, we should be talking about how to make them
more effective. The key is to make them part of a complete performance management system,
which includes goal setting, development, compensation actions, performance feedback and a
goals-based appraisal of performance.

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III. Performance appraisal methods

1. Essay Method

In this method the rater writes down the employee

description in detail within a number of broad categories
like, overall impression of performance, promoteability
of employee, existing capabilities and qualifications of
performing jobs, strengths and weaknesses and training
needs of the employee. Advantage It is extremely
useful in filing information gaps about the employees
that often occur in a better-structured checklist.
Disadvantages It its highly dependent upon the writing
skills of rater and most of them are not good writers.
They may get confused success depends on the memory
power of raters.

2. Behaviorally Anchored Rating Scales

statements of effective and ineffective behaviors
determine the points. They are said to be
behaviorally anchored. The rater is supposed to
say, which behavior describes the employee
performance. Advantages helps overcome rating
errors. Disadvantages Suffers from distortions
inherent in most rating techniques.

3. Rating Scale
Rating scales consists of several numerical scales
representing job related performance criterions such as
dependability, initiative, output, attendance, attitude etc.
Each scales ranges from excellent to poor. The total
numerical scores are computed and final conclusions are
derived. Advantages Adaptability, easy to use, low cost,
every type of job can be evaluated, large number of
employees covered, no formal training required.
Disadvantages Raters biases

4. Checklist method

Under this method, checklist of statements of traits of

employee in the form of Yes or No based questions is
prepared. Here the rater only does the reporting or
checking and HR department does the actual evaluation.
Advantages economy, ease of administration, limited
training required, standardization. Disadvantages Raters
biases, use of improper weighs by HR, does not allow
rater to give relative ratings

5.Ranking Method
The ranking system requires the rater to rank his
subordinates on overall performance. This consists in
simply putting a man in a rank order. Under this method,
the ranking of an employee in a work group is done
against that of another employee. The relative position of
each employee is tested in terms of his numerical rank. It
may also be done by ranking a person on his job
performance against another member of the competitive
group.
Advantages of Ranking Method
Employees are ranked according to their
performance levels.
It is easier to rank the best and the worst
employee.
Limitations of Ranking Method
The whole man is compared with another
whole man in this method. In practice, it is very difficult
to compare individuals possessing various individual
traits.
This method speaks only of the position where an

employee stands in his group. It does not test anything

about how much better or how much worse an employee
is when compared to another employee.
When a large number of employees are working,
ranking of individuals become a difficult issue.
There is no systematic procedure for ranking
individuals in the organization. The ranking system does
not eliminate the possibility of snap judgements.

6. Critical Incidents Method

The approach is focused on certain critical behaviors of
employee that makes all the difference in the
performance. Supervisors as and when they occur record
such incidents. Advantages Evaluations are based on
actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases,
chances of subordinate improvement are high.
Disadvantages Negative incidents can be prioritized,
forgetting incidents, overly close supervision; feedback
may be too much and may appear to be punishment.

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