Advantages and disadvantages of performance appraisal

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I. Contents of getting advantages and disadvantages of

performance appraisal
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Your small business's success depends heavily on the performance of your employees. To
assess the performance of each employee and provide feedback, it may be necessary to
implement a job appraisal system. A periodic appraisal lets the employee know what he is doing
well and what needs improvement. Appraisals offer a number of advantages as well as potential
disadvantages.
Status Reports
Many workers like to know where they stand regarding their job performance and their role with
a company. A periodic performance appraisal allows you to provide positive feedback as well as
identifying areas for improvement. You can also lay the groundwork for a developmental plan so
employees can improve their skills.
Building Rapport
As a business owner, you may not always have time to engage in an extended conversation with
your employees. According to the Entrepreneur website, an advantage of an employee
performance appraisal is that it allows you to have a candid one-on-one chat with your
employees, which can give you a better idea of what makes them tick as well as the chance to
build rapport.

Identifying Opportunities
During the appraisal process, you may discover that the employee possesses a specific skill or
has an interest in an important aspect of your business such as marketing or management. As a
result, you may be able to reassign the employee to a role where she offers more value to your
business.
Using Valuable Time
A possible disadvantage of performance appraisals is that they use up precious time.
You'll need to take the time to prepare for the appraisal as well as actually conduct it. It
also means downtime for your employees, resulting in lost productivity.
Potential for Inaccuracy
To conduct a fair and accurate performance appraisal, you'll need to keep accurate records
and documentation throughout the appraisal period. If you're not in the habit of making
notes when an event occurs, it can be easy to forget about the incident or record it at a later time
when your memory isn't as fresh. As a result, you may judge your employees unfairly.
Different Interpretation
According to the Mind Tools website, a disadvantage of the performance appraisal is that you
and your employee may have a different interpretation of the appraisal's outcome. What
you perceive as a chance to point out areas for improvement may instead result in your employee
feeling that the appraisal was nothing more than a "chewing out" session, causing reduced
morale.
==================

III. Performance appraisal methods

1. Essay Method

In this method the rater writes down the employee

description in detail within a number of broad categories
like, overall impression of performance, promoteability
of employee, existing capabilities and qualifications of
performing jobs, strengths and weaknesses and training
needs of the employee. Advantage It is extremely
useful in filing information gaps about the employees
that often occur in a better-structured checklist.
Disadvantages It its highly dependent upon the writing
skills of rater and most of them are not good writers.
They may get confused success depends on the memory
power of raters.

2. Behaviorally Anchored Rating Scales

statements of effective and ineffective behaviors
determine the points. They are said to be
behaviorally anchored. The rater is supposed to
say, which behavior describes the employee
performance. Advantages helps overcome rating
errors. Disadvantages Suffers from distortions
inherent in most rating techniques.

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

Under this method, checklist of statements of traits of

employee in the form of Yes or No based questions is
prepared. Here the rater only does the reporting or
checking and HR department does the actual evaluation.
Advantages economy, ease of administration, limited
training required, standardization. Disadvantages Raters
biases, use of improper weighs by HR, does not allow
rater to give relative ratings

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

employee stands in his group. It does not test anything

about how much better or how much worse an employee
is when compared to another employee.
When a large number of employees are working,
ranking of individuals become a difficult issue.
There is no systematic procedure for ranking
individuals in the organization. The ranking system does
not eliminate the possibility of snap judgements.

6. Critical Incidents Method

The approach is focused on certain critical behaviors of
employee that makes all the difference in the
performance. Supervisors as and when they occur record
such incidents. Advantages Evaluations are based on
actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases,
chances of subordinate improvement are high.
Disadvantages Negative incidents can be prioritized,
forgetting incidents, overly close supervision; feedback
may be too much and may appear to be punishment.

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