Page 128 - DCOM202_COST_ACCOUNTING_I

Cost Accounting – I

Notes (vi) Co-operation, honesty and integrity,
(vii) Sense of judgment,

(viii) Experience, skill, knowledge and aptitude for work or job,
(ix) Extraordinary personal features, and
(x) Attendance and regularity.
In ordinary words, merit rating is the impartial evaluation of merit and qualities of each person
of a work group. Different authors have defined it in different ways. Here are some definitions:
According to Edwin B. Flippo, “Merit rating is a systematic periodic and so far as humanly
possible, an impartial rating of our employee’s excellence in matters pertaining to his present job
and to his potentialities for a better job”.
According to Scot, Clotheir and Spriegal, “Merit rating of an employee is the process of evaluating
the employee’s performance on the job in terms of the requirements of the job”.

According to Allford and Beatty, “Employees or personnel rating is the evaluation or appraisal
of the relative worth to the organisation of a man’s services on his job”.

Methods of Merit Rating

For effective evaluation of any employee, these methods are generally followed:
(i) Straight Ranking Method: This is the oldest method. Here, employee is not separately treated
from his job. One person is compared with the other. This separates the efficient from the
inefficient but this is not practical as all persons have separate qualities. If a person is efficient
in one job, the other is efficient for the other; hence comparison is difficult between the two.
To solve the problem persons are evaluated in pairs. This is known as paired comparison
method. This is evaluation of a person with pair or other persons of the group.
This method is simple but it is defective. Firstly, to compare one person is difficult with the
other as every person has his own personal qualities. Secondly, one group’s persons are
compared but they are not compared with other groups if this is possible any how, then
efficiency and inefficiency is known but no measure of efficiency is possible. Thirdly, there is
no basis for serial assessment, hence there is partiality. Hence, this method is not used much.
(ii) Man-to-man Comparison: In this method for merit rating more variables are ascertained
like leadership, qualifications faithfulness. After this, for each variable, a master scale is
prepared in which for execution of each job, 5 strata are maintained according to qualities.
For that work most efficient and least efficient person are selected. These two persons are
the two ends of the scale. After that as a medium point, an average person is selected.
Later on the two points are market below and over the average. In this way five points are
ascertained. Comparing these points, other person’s qualities are known.
In performance appraisal, though this method is used to know the qualified person by the
comparison of variables but the preparation of master scale is a difficult problem.
(iii) Graphic Rating Method: In this method, a form is used which an index of the qualities
for performance of work is given. A scale is given in front of each merit on which this
evaluation is noted that this merit is found in the employee to what quantity and how
much of it he uses in working. On this basis, a progress report is made ready. This method
is like that of used in Montessori classes, used for their progress evaluation. This is more
used in Eastern countries.
(iv) Checklist Method: This is also known as Questionnaire Method. In this method, for the
accomplishment of job, an index is prepared of the necessary merits. Evaluator reads that

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