What Is Performance Appraisal Methods Essay

Performance appraisal is the technique of appraising employees. Under this method, performance of employees are at first documented then evaluated with the mutually set performance standards.

Companies have been practicing various methods of appraising employee performance, among which some popular ones are described below.

  1. Essay method
  2. Comparative evaluation
  3. Rating
  4. Forced distribution method
  5. Forced choice method
  6. Graphic rating scale method
  7. Field review method
  8. Checklist
  9. Confidential report
  10. Critical incident method
  11. Management by objectives (MBO)
  12. Behaviorally anchored rating scales (BARS)
  13. Cost accounting method
  14. 360-degree appraisal

Essay method

It is a traditional and judgmental approach under which employee is evaluated and a descriptive essay is written on him/her. The essay describes in detail about the strengths, weaknesses, potential, nature, etc.

Essay method helps in collecting a lot of information about the employees as the evaluators are not confined to appraise the employees in rigidly defined criteria. The process is unrestricted and flexible, permitting the employers to emphasize on any issues or traits that they feel relevant.

However, this method is tedious and difficult to manage as it demands more description than other methods of appraisal. The reports being descriptive in nature, it is difficult to compare and contrast them or withdraw any conclusion. Besides, the evaluator must have good writing skills, or else the whole process is distorted.

Comparative evaluation

Comparative evaluation is a technique of appraising employees by comparing and contrasting issues and traits of an employee with another. There are basically two ways to conduct comparative evaluation; they are:

Under this method, the pairs of employees of same job post or level are formed, following which they are evaluated on the basis of performance of each other. Subjects like skills, experience, team player, behavior, etc. are evaluated by the raters and picks the best performing employee.

To be precise, the raters are provided with a bunch of slips, each containing a pair of names of employees. The employee whom raters consider to be the best is given a tick mark and the process is repeated for all pairs. At the end, the employee who succeeds to get the most tick is considered to be the best while the employee getting least ticks is comparatively considered poor.

Paired comparison is a good method for evaluating employee performance. However, it becomes very difficult for companies with large number of employees to form pairs as the pairs are formed by applying the formula:

N (N-1) ÷ 2, where N = No. of employees

For an example, if there are four employees, the number of pairs formed will be six.

Ranking is one of the simplest methods of performance appraisal. Under this method, employees are ranked from the best to the worst according to their performance level.

The best performing employees are ranked #1 and the least performing one is ranked the last. Based on these rankings, the companies may take any actions, from promotion to termination.

Although ranking method of performance appraisal is considered to be an easier approach, it becomes problematic and full of issues when conducted in a large scale. Also, this method of performance appraisal is criticized because it is unsystematic and results are often drawn on the basis of snap judgment.


Rating is a commonly used traditional method of performance appraisal. Under this approach, an employee is numerically rated from 1 to 10 on various job performance criterions like attendance, attitude, performance, output, sincerity, dependability, initiative, etc.The employee may be rated by his/her superiors, colleagues or even customers, depending upon the nature of job. Scores of all criterions are finally calculated, and results are withdrawn.

Rating method of performance appraisal is commonly used because it is economic in nature and raters do not require to have high skills to use it. Also, it is applicable in almost all types of job and even with large workforce.

There is, however, a drawback of this method, i.e. employees might be incorrectly rated due to rater’s biasedness.

Forced distribution method

Employers or raters are found to have tendency to rate their employees near average or above average performing categories. In around late 90s, Tiffen introduced a new method of performance appraisal call forced distribution, in an attempt to eliminate the flaws of the raters.

Under this method, raters are forced to divide his employees evenly into certain categories which vary from organization to organization. The categories can be poor, average, good and excellent or percentile based like 10% poor, 40% fairly good, 40% good and 10% excellent.


This method is widely applied and has been considered effective in service-driven companies. However, the method also has some drawbacks. They are:

  • It creates false competition between employees.
  • All employees might not fit neatly into a category, leading to their placement in such a category that does not reflect their true image.
  • Raters may end up placing more visible employees in superior categories and less visible ones in poor category, irrespective of their job performance.

Forced choice method

Forced choice method of performance appraisal was introduced by J.P. Guilford. It is one of the most systematic and reliable approach to evaluate employees accurately.

Under this approach, the HR manager, at first, prepares a set of positive as well as negative statements. The statements are then forwarded to the rater, following which the rater indicates which of the given statements suits the employee. Once the rater finishes evaluating all employees, the report is sent to the HR manager for final assessment.

Some examples of positive and negative statements are

  • Communicates well with superiors.
  • Plays active role in meetings and other office events.
  • Consistently over-promises and under-delivers.
  • Isn’t punctual, often comes late to the office.

Each of such statements, both positive as well as negative, carries certain score set by the HR manager, which is not even revealed to the rater. It makes the process more objective. The scores are at last summed up and conclusion is withdrawn. The employees with high scores are ranked at the top while least scoring employees are ranked at the bottom.

Some critics have, however, noted that this method is time consuming and it is very challenging to construct pertinent evaluative statements.

Graphic rating scale method

Graphic rating scale is one of the oldest and commonly used methods of performance appraisal. Under this approach, the employees are evaluated on the basis of various job performance criterions, such that each criterion is categorically divided into poor, fairly poor, fairly good, good and excellent. Also, these criterions carry certain score weight. The rater ticks the category that best describes the employee and finally the score is totaled.

Graphic rating scale is an easy and simple method of performance appraisal as it does not require any writing skills. However, the rater’s capricious mood may result in ineffective evaluation.


Field review method

Field review method of performance appraisal is conducted by the rater who does not belong to the employees’ department. The rater is someone from the corporate, especially from HR department.

Use of this technique to evaluate employees’ performance is helpful in completely eliminating issues that arise due to rater’s biasedness. However, this method is not widely used because of the drawbacks. They are

  • The rater is not familiar with employees, making it impossible for him to observe their actual behavior.
  • The rater might feel aggrieved in cases when employees try to clarify any matter.


Checklist method is another of the easiest methods of appraising employee’s performance. Under this method, a checklist is prepared by the HR manager and is forwarded to the rater. The checklist may include list of questions (depicting behavior and job performance of employee) and the rater has to answer them in just ‘YES’ or ‘NO’ form.

The rater analyzes the question and the employee, and based on his views, he answers them. Such questions also carry some scores (equal or different), depending upon the nature or importance, which is totaled at the end of the procedure by the HR manager.

This method is helpful not only in evaluating employee’s job performance but also in evaluating degree of uniformity of the rater by giving him two similar questions in different manner. In the given figure, question no. 3 and 6 are differently asked same questions.


Confidential report

Confidential report is the method of evaluating employee’s performance and taking necessary actions without giving any feedbacks to the employees. Confidential report should only be viewed by authorized personnel. Therefore, it is not send openly but in sealed envelope. Generally, such method of performance appraisal is conducted yearly and employees are appraised on the following traits:

  • Attendance
  • Team work
  • Dependability
  • Leadership
  • Behavior with superior, colleagues and junior workers
  • Discipline
  • Integrity and honesty
  • Quality and quantity of output, etc.

Confidential report usually highlights the strengths and weaknesses of the employees. Despite the fact, it is used only in government organizations and not in other forms of organization as it does not provide any feedback to the employees. Employees are deprived of information such as how is he evaluated, why his ratings have fallen, why he is underrated, what mistakes are to rectify, how to improve his performance, etc. Employees have to directly face the consequence (either positive or negative) of the appraisal.

Critical incident method

Generally, all employees perform alike during normal situations but there are very few who can maintain their performance during unfavorable time as well. Critical incident method is used to evaluate the ability of employees to work during such situation.

Under this method, the rater keeps record of effective as well as ineffective behaviors of individual employee at the workplace.Such appraisal is conducted periodically. And at the end of every assessment, the HR manager or some experts evaluate the behavior and score them, depending upon which the best scoring employees and poor scoring employees are identified.

An example of effective behavior: A customer angrily stormed into the shop, complaining that the product he ordered was damaged. The sales executive patiently listened to the complaint and promptly replaced it, apologizing for the customer’s inconvenience.
An example of ineffective behavior: The sales clerk went on a leave during the festive season, during which 80% of the sales happened. He provided no logical reason for the leave and stopped responding to the phone calls.

Maintaining logs of employee’s critical incident behavior helps in preparing checklist too. The group of experts evaluates the behaviors of employees collectively and they prepare checklist, whenever necessary.Critical incident method evaluates job performance of an employee, rather than his personality. However, this method has some drawbacks. They are:

  • Ineffective behavior or negative response of employees is easily noticed than positive ones
  • It is time consuming
  • It requires very close supervision which is disliked by the employees
  • Recording detailed information about every employee is problematic
  • Raters may forget to mention any important incidents

Management by objectives (MBO)

Management by objectives (MBO) is a modern and systematic method of appraising employee’s performance which was jointly founded by some experts of management science like Drucker, McGregor and Odiorne.

Managers of present generation are aware of the fact that results of traditional methods of performance appraisal were majorly based on the perspective or opinion of the raters. They have realized that it is essential to know what achievement from an employee’s point of view is.

MBO is employer-employee driven approach of performance appraisal which involves superior and subordinates in setting goals. The employees work upon achieving their set goals and employers keep a record of how close they are to accomplishment of the goals. This way, employees become clear about which path to walk on to get the goals, subsequently increasing and improving his performance level.

MBO, at this point, does not only work as a tool for evaluating performance but also as a motivation factor which allows the company to extract maximum output from available human resource, permitting employees adequate space for self-development and growth.

Behaviorally anchored rating scales (BARS)

Behaviorally anchored rating scales (BARS) is the combination of critical incident and rating scale methods of performance appraisal. Under this method, the scale points are defined by critical (effective or ineffective) behaviors of the employee.

BARS usually consists of scale ranging from 5 to 9 points, each representing continuum of statements that describes behavior of employees ranging from unacceptable to most effective.

A BARS can be developed in following steps.

  1. Collecting samples of effective and ineffective job behavior from the experts by analyzing the critical incident method
  2. Converting these samples into performance dimension
  3. Relocating the performance dimension (from unacceptable to outstanding)
  4. Rating the performance dimension accordingly, starting from 1
  5. Finally, using the scale anchor to evaluate employee’s performance

Cost accounting method

Cost accounting method of performance appraisal is the process of evaluating monetary benefits yield to the organization from the job performance of an employee. In other words, this method is used to analyze the cost of keeping the employee and the benefits the company derives from his/her presence and / or absence.

There are some major points which are considered while evaluating employee under this approach. They are:

  • Average value of unit cost of production of goods and services
  • Quality of the goods and services produced
  • Overhead cost incurred (lighting, electricity, equipment, etc.)
  • Extra-expenses (accident, error, damage, wear and tear of tools and equipment)
  • Relationship with customers and clients
  • Cost of the time spent by the supervisor in appraising the employee

360-degree appraisal

360-degree appraisal is a modern technique to evaluate employee’s performance which was developed in the early 90s in the U.S.A.

Under this method, an employee’s job performance is appraised by the help of the factors that are present around him at the workplace. Such factors may be superiors, colleagues, subordinates and even clients, customer or spouse.

An evaluator asks various questions to these factors and collects their feedback. The gathered information is then assembled through computerized system and individual reports are prepared. Such reports are finally distributed to the employees, following which they can communicate with their appraiser in regards with their opinion about how to improve his performance.

360-degree method is considered to be the most effective way of appraising employee’s performance as information and feedback is collected from all around.

[Related Reading: Purposes of Performance Appraisal]

Filed Under: Human resource

Learning Objective

  1. Be able to describe the various appraisal methods.

It probably goes without saying that different industries and jobs need different kinds of appraisal methods. For our purposes, we will discuss some of the main ways to assess performance in a performance evaluation form. Of course, these will change based upon the job specifications for each position within the company. In addition to industry-specific and job-specific methods, many organizations will use these methods in combination, as opposed to just one method. There are three main methods of determining performance. The first is the trait method, in which managers look at an employee’s specific traits in relation to the job, such as friendliness to the customer. The behavioral method looks at individual actions within a specific job. Comparative methods compare one employee with other employees. Results methods are focused on employee accomplishments, such as whether or not employees met a quota.

Within the categories of performance appraisals, there are two main aspects to appraisal methods. First, the criteria are the aspects the employee is actually being evaluated on, which should be tied directly to the employee᾿s job description. Second, the rating is the type of scale that will be used to rate each criterion in a performance evaluation: for example, scales of 1–5, essay ratings, or yes/no ratings. Tied to the rating and criteria is the weighting each item will be given. For example, if “communication” and “interaction with client” are two criteria, the interaction with the client may be weighted more than communication, depending on the job type. We will discuss the types of criteria and rating methods next.

Graphic Rating Scale

The graphic rating scale, a behavioral method, is perhaps the most popular choice for performance evaluations. This type of evaluation lists traits required for the job and asks the source to rate the individual on each attribute. A discrete scale is one that shows a number of different points. The ratings can include a scale of 1–10; excellent, average, or poor; or meets, exceeds, or doesn’t meet expectations, for example. A continuous scale shows a scale and the manager puts a mark on the continuum scale that best represents the employee’s performance. For example:


The disadvantage of this type of scale is the subjectivity that can occur. This type of scale focuses on behavioral traits and is not specific enough to some jobs. Development of specific criteria can save an organization in legal costs. For example, in Thomas v. IBM, IBM was able to successfully defend accusations of age discrimination because of the objective criteria the employee (Thomas) had been rated on.

Many organizations use a graphic rating scale in conjunction with other appraisal methods to further solidify the tool’s validity. For example, some organizations use a mixed standard scale, which is similar to a graphic rating scale. This scale includes a series of mixed statements representing excellent, average, and poor performance, and the manager is asked to rate a “+” (performance is better than stated), “0” (performance is at stated level), or “−” (performance is below stated level). Mixed standard statements might include the following:

  • The employee gets along with most coworkers and has had only a few interpersonal issues.
  • This employee takes initiative.
  • The employee consistently turns in below-average work.
  • The employee always meets established deadlines.

An example of a graphic rating scale is shown in Figure 11.1 “Example of Graphic Rating Scale”.

Essay Appraisal

In an essay appraisal, the source answers a series of questions about the employee’s performance in essay form. This can be a trait method and/or a behavioral method, depending on how the manager writes the essay. These statements may include strengths and weaknesses about the employee or statements about past performance. They can also include specific examples of past performance. The disadvantage of this type of method (when not combined with other rating systems) is that the manager’s writing ability can contribute to the effectiveness of the evaluation. Also, managers may write less or more, which means less consistency between performance appraisals by various managers.

Checklist Scale

A checklist method for performance evaluations lessens the subjectivity, although subjectivity will still be present in this type of rating system. With a checklist scale, a series of questions is asked and the manager simply responds yes or no to the questions, which can fall into either the behavioral or the trait method, or both. Another variation to this scale is a check mark in the criteria the employee meets, and a blank in the areas the employee does not meet. The challenge with this format is that it doesn’t allow more detailed answers and analysis of the performance criteria, unless combined with another method, such as essay ratings. A sample of a checklist scale is provided in Figure 11.3 “Example of Checklist Scale”.

Figure 11.1 Example of Graphic Rating Scale

Figure 11.2 Example of Essay Rating

Figure 11.3 Example of Checklist Scale

Critical Incident Appraisals

This method of appraisal, while more time-consuming for the manager, can be effective at providing specific examples of behavior. With a critical incident appraisal, the manager records examples of the employee’s effective and ineffective behavior during the time period between evaluations, which is in the behavioral category. When it is time for the employee to be reviewed, the manager will pull out this file and formally record the incidents that occurred over the time period. The disadvantage of this method is the tendency to record only negative incidents instead of postive ones. However, this method can work well if the manager has the proper training to record incidents (perhaps by keeping a weekly diary) in a fair manner. This approach can also work well when specific jobs vary greatly from week to week, unlike, for example, a factory worker who routinely performs the same weekly tasks.

Work Standards Approach

For certain jobs in which productivity is most important, a work standards approach could be the more effective way of evaluating employees. With this results-focused approach, a minimum level is set and the employee’s performance evaluation is based on this level. For example, if a sales person does not meet a quota of $1 million, this would be recorded as nonperforming. The downside is that this method does not allow for reasonable deviations. For example, if the quota isn’t made, perhaps the employee just had a bad month but normally performs well. This approach works best in long-term situations, in which a reasonable measure of performance can be over a certain period of time. This method is also used in manufacuring situations where production is extremely important. For example, in an automotive assembly line, the focus is on how many cars are built in a specified period, and therefore, employee performance is measured this way, too. Since this approach is centered on production, it doesn’t allow for rating of other factors, such as ability to work on a team or communication skills, which can be an important part of the job, too.

Ranking Methods

In a ranking method system (also called stack ranking), employees in a particular department are ranked based on their value to the manager or supervisor. This system is a comparative method for performance evaluations.The manager will have a list of all employees and will first choose the most valuable employee and put that name at the top. Then he or she will choose the least valuable employee and put that name at the bottom of the list. With the remaining employees, this process would be repeated. Obviously, there is room for bias with this method, and it may not work well in a larger organization, where managers may not interact with each employee on a day-to-day basis.

To make this type of evaluation most valuable (and legal), each supervisor should use the same criteria to rank each individual. Otherwise, if criteria are not clearly developed, validity and halo effects could be present. The Roper v. Exxon Corp case illustrates the need for clear guidelines when using a ranking system. At Exxon, the legal department attorneys were annually evaluated and then ranked based on input from attorneys, supervisors, and clients. Based on the feedback, each attorney for Exxon was ranked based on their relative contribution and performance. Each attorney was given a group percentile rank (i.e., 99 percent was the best-performing attorney). When Roper was in the bottom 10 percent for three years and was informed of his separation with the company, he filed an age discrimination lawsuit. The courts found no correlation between age and the lowest-ranking individuals, and because Exxon had a set of established ranking criteria, they won the case (Grote, 2005).

Another consideration is the effect on employee morale should the rankings be made public. If they are not made public, morale issues may still exist, as the perception might be that management has “secret” documents.

Fortune 500 Focus

Critics have long said that a forced ranking system can be detrimental to morale; it focuses too much on individual performance as opposed to team performance. Some say a forced ranking system promotes too much competition in the workplace. However, many Fortune 500 companies use this system and have found it works for their culture. General Electric (GE) used perhaps one of the most well-known forced ranking systems. In this system, every year managers placed their employees into one of three categories: “A” employees are the top 20 percent, “B” employees are the middle 70 percent, and “C” performers are the bottom 10 percent. In GE’s system, the bottom 10 percent are usually either let go or put on a performance plan. The top 20 percent are given more responsibility and perhaps even promoted. However, even GE has reinvented this stringent forced ranking system. In 2006, it changed the system to remove references to the 20/70/10 split, and GE now presents the curve as a guideline. This gives more freedom for managers to distribute employees in a less stringent manner1.

The advantages of a forced ranking system include that it creates a high-performance work culture and establishes well-defined consequences for not meeting performance standards. In recent research, a forced ranking system seems to correlate well with return on investment to shareholders. For example, the study (Sprenkel, 2011) shows that companies who use individual criteria (as opposed to overall performance) to measure performance outperform those who measure performance based on overall company success. To make a ranking system work, it is key to ensure managers have a firm grasp on the criteria on which employees will be ranked. Companies using forced rankings without set criteria open themselves to lawsuits, because it would appear the rankings happen based on favoritism rather than quantifiable performance data. For example, Ford in the past used forced ranking systems but eliminated the system after settling class action lawsuits that claimed discrimination (Lowery, 2011). Conoco also has settled lawsuits over its forced ranking systems, as domestic employees claimed the system favored foreign workers (Lowery, 2011). To avoid these issues, the best way to develop and maintain a forced ranking system is to provide each employee with specific and measurable objectives, and also provide management training so the system is executed in a fair, quantifiable manner.

In a forced distribution system, like the one used by GE, employees are ranked in groups based on high performers, average performers, and nonperformers. The trouble with this system is that it does not consider that all employees could be in the top two categories, high or average performers, and requires that some employees be put in the nonperforming category.

In a paired comparison system, the manager must compare every employee with every other employee within the department or work group. Each employee is compared with another, and out of the two, the higher performer is given a score of 1. Once all the pairs are compared, the scores are added. This method takes a lot of time and, again, must have specific criteria attached to it when comparing employees.

Human Resource Recall

How can you make sure the performance appraisal ties into a specific job description?

Management by Objectives (MBO)

Management by objectives (MBOs) is a concept developed by Peter Drucker in his 1954 book The Practice of Management (Drucker, 2006). This method is results oriented and similar to the work standards approach, with a few differences. First, the manager and employee sit down together and develop objectives for the time period. Then when it is time for the performance evaluation, the manager and employee sit down to review the goals that were set and determine whether they were met. The advantage of this is the open communication between the manager and the employee. The employee also has “buy-in” since he or she helped set the goals, and the evaluation can be used as a method for further skill development. This method is best applied for positions that are not routine and require a higher level of thinking to perform the job. To be efficient at MBOs, the managers and employee should be able to write strong objectives. To write objectives, they should be SMART (Doran, 1981):

  1. Specific. There should be one key result for each MBO. What is the result that should be achieved?
  2. Measurable. At the end of the time period, it should be clear if the goal was met or not. Usually a number can be attached to an objective to make it measurable, for example “sell $1,000,000 of new business in the third quarter.”
  3. Attainable. The objective should not be impossible to attain. It should be challenging, but not impossible.
  4. Result oriented. The objective should be tied to the company’s mission and values. Once the objective is made, it should make a difference in the organization as a whole.
  5. Time limited. The objective should have a reasonable time to be accomplished, but not too much time.

Setting MBOs with Employees

(click to see video)

An example of how to work with an employee to set MBOs.

To make MBOs an effective performance evaluation tool, it is a good idea to train managers and determine which job positions could benefit most from this type of method. You may find that for some more routine positions, such as administrative assistants, another method could work better.

Behaviorally Anchored Rating Scale (BARS)

A BARS method first determines the main performance dimensions of the job, for example, interpersonal relationships. Then the tool utilizes narrative information, such as from a critical incidents file, and assigns quantified ranks to each expected behavior. In this system, there is a specific narrative outlining what exemplifies a “good” and “poor” behavior for each category. The advantage of this type of system is that it focuses on the desired behaviors that are important to complete a task or perform a specific job. This method combines a graphic rating scale with a critical incidents system. The US Army Research Institute (Phillips, et. al., 2006) developed a BARS scale to measure the abilities of tactical thinking skills for combat leaders. Figure 11.4 “Example of BARS” provides an example of how the Army measures these skills.

Figure 11.4 Example of BARS

Figure 11.5 More Examples of Performance Appraisal Types

How Would You Handle This?

Playing Favorites

You were just promoted to manager of a high-end retail store. As you are sorting through your responsibilities, you receive an e-mail from HR outlining the process for performance evaluations. You are also notified that you must give two performance evaluations within the next two weeks. This concerns you, because you don’t know any of the employees and their abilities yet. You aren’t sure if you should base their performance on what you see in a short time period or if you should ask other employees for their thoughts on their peers’ performance. As you go through the files on the computer, you find a critical incident file left from the previous manager, and you think this might help. As you look through it, it is obvious the past manager had “favorite” employees and you aren’t sure if you should base the evaluations on this information. How would you handle this?

How Would You Handle This?


The author discusses the How Would You Handle This situation in this chapter at: https://api.wistia.com/v1/medias/1360849/embed.

Table 11.3 Advantages and Disadvantages of Each Performance Appraisal Method

Type of Performance Appraisal MethodAdvantagesDisadvantages
Graphic Rating ScaleInexpensive to developSubjectivity
Easily understood by employees and managersCan be difficult to use in making compensation and promotion decisions
EssayCan easily provide feedback on the positive abilities of the employeeSubjectivity
Writing ability of reviewer impacts validity
Time consuming (if not combined with other methods)
Checklist scaleMeasurable traits can point out specific behavioral expectationsDoes not allow for detailed answers or explanations (unless combined with another method)
Critical IncidentsProvides specific examplesTendency to report negative incidents
Time consuming for manager
Work Standards ApproachAbility to measure specific components of the jobDoes not allow for deviations
RankingCan create a high-performance work culturePossible bias
Validity depends on the amount of interaction between employees and manager
Can negatively affect teamwork
MBOsOpen communicationMany only work for some types of job titles
Employee may have more “buy-in”
BARSFocus is on desired behaviorsTime consuming to set up
Scale is for each specific job
Desired behaviors are clearly outlined

Key Takeaways

  • When developing performance appraisal criteria, it is important to remember the criteria should be job specific and industry specific.
  • The performance appraisal criteria should be based on the job specifications of each specific job. General performance criteria are not an effective way to evaluate an employee.
  • The rating is the scale that will be used to evaluate each criteria item. There are a number of different rating methods, including scales of 1–5, yes or no questions, and essay.
  • In a graphic rating performance evaluation, employees are rated on certain desirable attributes. A variety of rating scales can be used with this method. The disadvantage is possible subjectivity.
  • An essay performance evaluation will ask the manager to provide commentary on specific aspects of the employee’s job performance.
  • A checklist utilizes a yes or no rating selection, and the criteria are focused on components of the employee’s job.
  • Some managers keep a critical incidents file. These incidents serve as specific examples to be written about in a performance appraisal. The downside is the tendency to record only negative incidents and the time it can take to record this.
  • The work standards performance appraisal approach looks at minimum standards of productivity and rates the employee performance based on minimum expectations. This method is often used for sales forces or manufacturing settings where productivity is an important aspect.
  • In a ranking performance evaluation system, the manager ranks each employee from most valuable to least valuable. This can create morale issues within the workplace.
  • An MBO or management by objectives system is where the manager and employee sit down together, determine objectives, then after a period of time, the manager assesses whether those objectives have been met. This can create great development opportunities for the employee and a good working relationship between the employee and manager.
  • An MBO’s objectives should be SMART: specific, measurable, attainable, results oriented, and time limited.
  • A BARS approach uses a rating scale but provides specific narratives on what constitutes good or poor performance.


  1. Review each of the appraisal methods and discuss which one you might use for the following types of jobs, and discuss your choices.

    1. Administrative Assistant
    2. Chief Executive Officer
    3. Human Resource Manager
    4. Retail Store Assistant Manager

1“The Struggle to Measure Performance,” BusinessWeek, January 9, 2006, accessed August 15, 2011, http://www.businessweek.com/magazine/content/06_02/b3966060.htm.


Doran, G. T., “There’s a S.M.A.R.T. Way to Write Management’s Goals and Objectives,” Management Review 70, no. 11 (1981): 35.

Drucker, P., The Practice of Management (New York: Harper, 2006).

Grote, R., Forced Ranking: Making Performance Management Work (Boston: Harvard Business School Press, 2005).

Lowery, M., “Forcing the Issue,” Human Resource Executive Online, n.d., accessed August 15, 2011, http://www.hrexecutive.com/HRE/story.jsp?storyId=4222111&query=ranks.

Phillips, J., Jennifer Shafter, Karol Ross, Donald Cox, and Scott Shadrick, Behaviorally Anchored Rating Scales for the Assessment of Tactical Thinking Mental Models (Research Report 1854), June 2006, US Army Research Institute for the Behavioral and Social Sciences, accessed August 15, 2011, http://www.hqda.army.mil/ari/pdf/RR1854.pdf.

Sprenkel, L., “Forced Ranking: A Good Thing for Business?” Workforce Management, n.d., accessed August 15, 2011, http://homepages.uwp.edu/crooker/790-iep-pm/Articles/meth-fd-workforce.pdf.

This is a derivative of Human Resource Management by a publisher who has requested that they and the original author not receive attribution, which was originally released and is used under CC BY-NC-SA. This work, unless otherwise expressly stated, is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

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