Modern Methods of Performance Appraisal by Results

1. Management by Objectives (MBO)

MBO is used to measure the performance of the managers.

Here the following process is used :-

1. The superior and subordinate managers jointly fix common objectives.
2. The superior and subordinate managers jointly make plans for achieving the objectives.
3. The subordinate manager implements the plans.
4. Then the actual performance of the subordinate manager is compared with the objectives and the deviations are found out.
5. Necessary Corrective Action is taken or the plans are modified.

MBO is a very good method of performance appraisal because the subordinates are involved in their appraisal.

Image Credits © Joakim K E Johansson

2. Assessment Centres

This method is mostly used for selecting employees and managers. However, now-a-days this method is used for performance appraisal. It is used to decide which manager to promote to a higher level. The ratees are given many psychological tests, management games, oral presentations and other exercises. They are asked questions and they are judged by the raters.

3. Behaviourally Anchored Rating Scales (BARS)

BARS method is a variation of simple graphic scale method. Here, the behaviour or attitude of the employee towards his job is rated. Some employees have a positive attitude towards their job. They continuously try to upgrade (improve) their knowledge and skills. However, some employees have a negative attitude towards their job. They do not try to upgrade and update their knowledge and skills So, the employees can be divided into two groups based on their behaviour towards their job.

4. Role Analysis

The role analysis method involves two parties, viz., the focal role and the role set members. The focal role is the ratee. That is, he is a manager whose performance is appraised. The role set members are the raters. That is, they are the managers who come in close contact with the focal role while he is doing his job. The role set members will judge the performance of the focal role. As per their judgements, the focal role will make changes in his performance.

5. Human Resource Accounting (HRA)

Human Resource Accounting HRA measures the cost and contribution of human resources in the organisation. The cost includes the cost of recruitment, selection, induction, training, salaries and other facilities, etc. Contribution is the money value of the service of the employees. This service is measured by labour productivity. If the contribution is more than the cost, then the employee performance is positive and vice-versa.

6. Psychological Appraisal Method

Psychological appraisal is done to find out the conceptual skills, human skills, technical skills, etc. of the employee. It is done by different methods, such as in-depth interviews, psychological tests, consultations and discussions with the employees, superiors, subordinates and others, who are working with the employee.