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Effective goal alignment and performance management lets you establish a true pay-forperformance culture at your company by providing the foundation for closely linking reward
systems with individual and team performance, thereby allowing you to hold on to your high
performing employees.
Deploy Talent and Resources Appropriately
By using a performance appraisal system, you ensure that everyone keeps their projects on track
based upon established goals that are aligned with company goals. Additionally, management has
the tools to make informed business decisions based upon the completion or non-completion of
these recognized goals. Why waste precious human capital pursuing goals not aligned with those
of the company? This is a waste of resources that could be focused on contributions that lead to
achieving true business goals.
More than performance reviews
However, a performance appraisal system is more than simply a database for annual performance
reviews. Developing internal talent can be a significant source of savings considering external
recruitment and training can be twice as expensive as finding internal successors. Managers can
analyze their employees' skill sets within a performance appraisal system to forecast readiness
for promotion and find potential successors and design training programs to assist those
employees found with gaps in required skill sets. The information that is gathered can be
analyzed and used to make informed business decisions regarding promotions, rewards, and
succession planning for internal candidates while supporting difficult decisions when layoffs
loom during challenging economic times.
Create Best Practices
Why reinvent the wheel? Employees with similar job descriptions and, therefore, similar goals
should share best practices company-wide to improve everyone's performance in that area. For
example, when one employee has a system that works efficiently, and is considered an "expert",
others can be trained to follow those best practices and be successful.
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1. Essay Method
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
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