Definitions

According to Newstrom, It is the process of evaluating

the performance of employees, sharing that information with them and searching for ways to improve their performance.

Meaning
Performance appraisal is the step where the management finds out how effective it has been at

hiring and placing employees .

A Performance appraisal is a process of

evaluating an employees performance of a job in terms of its requirements.

Objectives of Performance Appraisal

According to:
Employee concrete and tangible particulars about their work assessment of performance Organization measuring the efficiency maintaining organizational control.

Aims at:
Personal development work satisfaction involvement in the organization.

mutual goals of the employees & the organization. growth & development increase harmony & enhance effectiveness

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Advantages of rating scale method

The greatest advantage of rating scales is that they are structured and standardised. This allows ratings to be easily compared and contrasted - even for entire workforces.

Each employee is subjected to the same basic appraisal process and rating criteria, with the same range of responses. This encourages equality in treatment for all appraises and imposes standard measures of performance across all parts of the organization. Rating scale methods are easy to use and understand. The concept of the rating scale makes obvious sense; both appraisers and appraises have an intuitive appreciation for the simple and efficient logic of the bipolar scale. The result is widespread acceptance and popularity for this approach.

Disadvantages of rating scale method

Systemic Disadvantage

There is an assumption that all the true and best indicators of performance are included, and all false and irrelevant indicators are excluded.

This is an assumption very difficult to prove in practice. It is possible that an employee's performance may depend on factors that have not been included in the selected traits. Such employees may end up with ratings that do not truly or fairly reflect their effort or value to the organization. Employees in this class are systemically disadvantaged by the rating scale method.

Disadvantages of rating scale method

Perceptual Errors This includes various well-known problems of selective perception (such as the horns and halos effect) as well as problems of perceived meaning. Selective perception is the human tendency to make private and highly subjective assessments of what a person is "really like", and then seek evidence to support that view (while ignoring or downplaying evidence that might contradict it). This is a common and normal psychological phenomenon. All human beings are affected by it. In other words, we see in others what we want to see in them. An example is the supervisor who believes that an employee is inherently good (halo effect) and so ignores evidence that might suggest otherwise. Instead of correcting the slackening employee, the supervisor covers for them and may even offer excuses for their declining performance. On the other hand, a supervisor may have formed the impression that an employee is bad (horns effect). The supervisor becomes unreasonably harsh in their assessment of the employee, and always ready to criticize and undermine them. The horns and halo effect is rarely seen in its extreme and obvious forms. But in its more subtle manifestations, it can be a significant threat to the effectiveness and credibility of performance appraisal.

Disadvantages of rating scale method

Rating Errors

The most common rating error is central tendency. Busy appraisers, or those wary of confrontations and repercussions, may be tempted to dole out too many passive, middle-of-the-road ratings (e.g., "satisfactory" or "adequate"), regardless of the actual performance of a subordinate. Thus the spread of ratings tends to clump excessively around the middle of the scale.

SELF APPRAISAL
Self-appraisal is a method of performance appraisal that is done by employee (appraisee).
Advantages of self appraisal
If done properly and tactfully, encouraging employees to self evaluation or self appraise at any time during the year, including around the actual review meetings, help convey the message that the process of performance management and appraisal is a team effort, and not something the manager does to the employee. Whey self appraisal is an accepted and integrated part of the performance management process, it encourages employees to self evaluate throughout the year. Self-ratings are particularly useful if the entire cycle of performance management involves the employee in a self-assessment.

Disadvantages of self appraisal

Research shows low correlations between self-ratings and all other sources of ratings, particularly supervisor ratings. The self-ratings tend to be consistently higher. This discrepancy can lead to defensiveness and alienation if supervisors do not use good feedback skills. Self-ratings should focus on the appraisal of performance elements, not on the summary level determination.A range of rating sources, including the self assessments, help to round out the information for the summary rating. Sometimes self-ratings can be lower than others. In such situations, employees tend to be self-demeaning and may feel intimidated and put on the spot.

Advantages
provide a record of performance over a period of time.

Can be motivational with the support of a good reward and compensation

provide an opportunity for a manager to meet & discuss performance

Provide an opportunity for an employee to discuss issues and to clarify expectations

Provide the employee with feedback about their performance

Disadvantages
If not done appropriately, can be a negative experience. very time consuming, especially for a manager subject to rater errors & biases. If not done right can be a complete waste of time.

Can be stressful for all involved

360 degree performance appraisal

It is a systematic collection of performance data on an individual or group. It is derived from number of stakeholders The stakeholders the immediate superiors, the team members, the customers, and the peers, including the individual himself. In fact, anyone who has useful information on how an employee does his job may be one of the appraisers.

Advantages of 360 degree performance appraisal

1. It provides a broader perspective about an employees performance 2. It facilitates greater self development of the employees 3. It enables an employee to compare his or her perception about self with perceptions of others 4. It provides a formalized communication link between an employee and his or her customers 5. It makes employee to feel much more accountable to his or her internal or external customers 6. It is helpful in assessing soft skill of an employee 7. It identifies and measures interpersonal skills, customer satisfaction, and team building skills