Performance Appraisal- Meaning, definition, process, methods,essentials and problems.

viii. Critical Incident Method

  • An appraiser keeps a diary to record critical incidents involving effective and ineffective job behaviours.
  • Appraisers pay attention to exceptional behaviours in some performances areas at certain times and in other areas at different times.
  • These critical incidents are later used as criteria for evaluating employee’s performance.
  • For example, a fire, a sudden breakdown of machinery, a serious   accident, etc. may be identified as critical  incidents for the working of a factory.
  • It is very time consuming and  cumbersome for the superior to maintain a written  record  for each employee during  every major
  • Critical incidents occur infrequently and therefore, a continuous record of performance might not be available.

The following tables illustrates   the  behaviour  of five workers  during   machine breakdown.





Informed supervisor immediately.



Became anxious of loss of output.



Tried to repair the machine.



Was happy to get forced rest.



Complained of poor maintenance.


ix. Group Appraisal

  • In this method, an employee is appraised by a group of appraisers. This group consists of the immediate supervisor of the employees, other supervisors who have close contact with the employee’s work, manager or head of the department and consultants.
  • The immediate supervisors enlightens other members about the job characteristics, demands, standards of performance, etc.
  • Then the group appraises the performance of the employee, compares the actual performance with standards, find out deviations, discusses the reasons therefore, suggests ways for improvement of performance, prepares an action plan, studies the need for change in the job analysis and standards and recommended changes, if necessary.
  • This method eliminates personal bias to large extent, as performance is evaluated by multiple raters.

x. Field Review method

  • In this method, a training officer from  the human resource  department   interviews  line  supervisors  to  evaluate  their   respective subordinates.
  • The interviewer prepares in advance the questions to be asked.
  • By answering these questions  a  supervisor  gives  his  opinions  about   the  level  of performance of his subordinate, the subordinate’s work progress, his strengths and weaknesses, promotion  potential, etc.
  • The evaluator takes  detailed notes  of the answer which are then approved by the concerned supervisor. These are then placed in the employee’s personal service file.
  • It is time consuming and a skilled and competent interviewer is required.

b) Modern Methods

i. Assessment Centre Method

  • An assessment center is a multiple assessment of several individuals performed simultaneously by a group of trained evaluators using a variety of group and individual exercises like role playing, business games and inbasket exercises.
  • Experienced managers   with  proven ability serve  as
  • Employees are evaluated on job-related  characteristics   considered important  for job
  • The evaluators  observe and  evaluate employees as  they perform jobs.  Assessments  are  done  generally to determine  employee potential for promotion.
  • The evaluators  prepare  a summary  report   and  feedback is administered on  a face-to-face basis   to the  employees who  ask  for
  • Assessment centres  are  not  only  a method  of appraisal  but  help  to determine training and  development  needs   of employees and  provide data  for human  resource planning.
  • The main tools used in assessment centers are:

1. Psychometric Tests

          Three types of tests or questinnaires such as aptitude tests, ability test and personality test are employed. These tests are selected keeping in                    view:

  • Measurement of objectives
  • Reliablity and validity
  • Time required for administration
  • Cost involved

2. Interviews

Structured interviews are used to probe background, critical incidents, and situational and behavioural event of the employees.

3. Leadership Group Discussion

A small group of employees are given a problem to solve and are instructed to arrive at a group decision within a specified time frame.

4. In-basket Exercise

The in-basket exercise or in-tray represents day to day decision making situation which a manager is likely to face. The in-tray consists of various written messages and communications from customers, suppliers, government authorities, internal departments, seniors management etc. The objective is to assess an employee’s activity level, problem analysis skills, planning and organizing skills, time management, delegation etc. The in-tray materials are given keeping in view the job duties and competencies required of each employee.

5. Business Games/Simulation Exercises

A real life situation such as running a manufacturing operation, stock trading etc. is simulated to the entire group of employees. The complexities varies in these games, the common denominator is the relatively unstructured nature of interactions among the participants and the variety of actions that can be taken by all participants. The interactive nature of the business game provides opportunities to assess dimensions such as strategic planning, teamwork, team skills, leadership and analytical ability.

6. Role playing

It is the method of human interaction which involves realistic behavior in an imaginary or hypothetical situation. Role playing tends to evaluate the human relations processes and personal attitudes and behavior in a particular role such as conflict management, leadership skills, group problem solving, team skills, communication, interpersonal skills etc.

7. Presentations

Presentations on vision, organizational issues, case studies etc. are extensively used for assessing employees/participants.

  • Assessment center method is suitable for senior or middle management levels.
  • It is costly and needs experts to carry out the processes.
Performance Appraisal- Meaning, definition, process, methods,essentials and problems.

2 thoughts on “Performance Appraisal- Meaning, definition, process, methods,essentials and problems.

    1. Please visit Entrance Exam Section on our website. We have uploaded notes and MCQS on HRM for first three units.Soon will be uploading rest of the units.

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