Performance appraisal theories

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I. Contents of getting performance appraisal theories

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Behavioral management theory was developed in response to the need to account for employee
behavior and motivation. The shift moved management from a production-orientation (classical
leadership theory) to a leadership style focused on the workers' human need for work-related
satisfaction and good working conditions.
A Shift in Theories
Long before theorists started writing about employee satisfaction and good working conditions,
management considered classical leadership, with its sole interest in high production and
efficiency, to be the most important to an organization's success. Later, it was concern for worker
satisfaction and good working conditions that formed the foundation for behavioral management
theory.
Behavioral management theory relies on the notion that managers will better understand the
human aspect to workers and treat employees as important assets to achieve goals. Management
taking a special interest in workers makes them feel like part of a special group.
As time went on, thinking shifted, and management started looking at employee satisfaction and
working conditions as a way to increase productivity. Theorists like Elton Mayo and others
studied employee productivity under different conditions to determine a connection.
Mayo's Hawthorne experiment provides a good example of this. In the Hawthorne experiment, a
group of telephone line workers were separated and observed working in a private room. During

their workday, the group members were given special privileges, like freedom to leave their
workstations, changes in pay rates, and even company-sponsored lunch. What they discovered
was the control group produced more than the other employees. The rationale for this increased
production was that the group felt that management was interested in their well-being.
This began the human relations movement for management. If all management had to do was
spend time, express interest in workers' personal well-being, and reward them for a job well
done, workers would feel motivation to work harder. In fact, behavior towards work would be
positive.
Behavior and Motivation
Let's see how behavioral management theory works in a modern day telephone line company.
Total Telephone Line Company workers perform the monotonous job of weaving telephone lines
together. Managers know the work is boring and often results in poor productivity and
absenteeism.
Percy oversees the workers as they weave away, making sure each set of wires is perfect.
Workers like Lucy and Marcy chit-chat during most of their shift, getting very little done.
Daphne daydreams about working as a fashion designer and uses much of her workday sketching
haute couture on lunch napkins.
Percy used to yell at the ladies and banish them to silence. Daphne even had her pencils taken
away from her on several occasions. But productivity did not increase. In fact, it decreased.
Percy knew she had to try something new. She had a tough challenge. She is responsible for high
productivity. After all, Total Telephone Wire is profit motivated.
Percy researched ways to improve productivity and came across a book on behavioral
management theory. She found that a greater concern for employee needs leads to higher
satisfaction levels and better overall performance, which leads to behavioral changes in their
response to work.
Percy changed the way she managed the ladies. She asked questions about their work
environment. She even took suggestions about how they can perform their job more efficiently.
What Percy discovered is that the more she connected with the ladies, the more motivated they
were to perform and do a good job. This changed their behavior towards Percy's drilling orders,
and it increased their productivity.
Behavior is defined as the way a person conducts themselves towards others. When workers are
treated as humans rather than machines, they respond to their particular work situation in a
positive way - by increasing individual productivity.

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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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