PERFORMANCE APPRAISAL METHODS

The Critical Incidents File

The critical incidents file is a performance appraisal method in which the manager writes down positive and
negative performance behavior of employees throughout the performance period. The critical incidents file is a form of
documentation that is needed in this litigious environment.

The Rating Scale

The rating scale is a performance appraisal form on which the manager simply checks off the employee’s level of
performance. Some of the possible areas evaluated include quantity of work, quality of work, dependability, judgment, attitude,
cooperation, and initiative.

Behaviorally Anchored Rating Scales (BARS)

BARS is a performance appraisal method combining rating and critical incidents. It is more objective and accurate
than the two methods separately. Rather than having excellent, good, average, and so forth, the form has several statements
that describe the employee’s performance, from which the manager selects the one that best describes the employee’s
performance for that task. Standards are clear when good BARS are developed.

Ranking
Ranking is a performance appraisal method that is used to evaluate employee performance from best to worst. Under
the ranking method, the manager compares an employee to another employee, rather than comparing each one to a standard
measurement. An offshoot of ranking is the forced distribution method, which is similar to grading on a curve. A
predetermined percentage of employees are placed in performance categories: for example, excellent—5 percent, above
average—l5 percent, average—GO percent, below average—l5 percent, and poor—5 percent.

Management by Objectives (MBO)

MBO is a process in which managers and their employees jointly set objectives for the employee, periodically
evaluate the performance, and reward according to the results (review Chapter 6 for details).

The Narrative Method

The narrative method requires the manager to write a statement about the employee’s performance. The system can
vary. Managers may be allowed to write whatever they want, or they may be required to answer questions about employees’
performance. The narrative is often combined with another method.

Which Performance Appraisal Method Is the Best?

Determining the best appraisal method depends upon the objectives of the system. A combination of the methods is usually
superior to any one method. For developmental objectives, critical incidents and MBO work well. For administrative
decisions, a ranking method based on rating scales or BARS works well. The real success of performance appraisal does not
lie in the method or form used; it depends upon the manager’s human relations skills.