Page 67 - DMGT517_PERFORMANCE_MANAGEMENT_SYSTEM

Performance Management System

Notes The merit-rating scales are frequently criticized form the standpoints of clarity in standards,
differing perceptions, excessive leniency or strictness, the central tendency, the halo effect, and
the impact of an individual’s job. The basic criticism of the traditional performance rating is
concerned with its emphasis on personality traits instead of job performance. Such rating is
highly subjective in the absence of objective standards.

6.2 Newer Rating Methods

Because of several inadequacies in the traditional rating scale, attempts have been made to devise
new procedures which are less susceptible to the above weaknesses. Among these included rank
order, paired comparison, forced distribution forced choice, critical incident and fi eld review.
These methods are discussed below:
1. Rank-order Procedure: It is effective where ten or lesser number of individuals are to be
evaluated. According to this procedure, each individual is assigned such ranks as fi rst,
second, third and so on. If the evaluation process involves several traits, the ranking is made
separately for each trait. Although this method is simple to understand and easy to apply,
this technique becomes cumbersome and difficult when a large number of employees are

to be evaluated in the organization.
2. Paired-comparison System: Under this, each individual is compared with every other
individual. The appraiser is required to put a tick-mark against the name of the individual
whom he consider better on the trait in question. The final ranking is determined by the

number of times he is judged better than the other. This method becomes complicated
when the number of individuals for evaluation is large.

3. Forced Distribution Procedure: It is form of comparative evaluation in which an evaluator

rates subordinates according to a specified distribution. Here judgments are made on a
relative basis i.e., a person is assessed relative to his performance in the group he works.
This procedure can be used for numerous traits if required by evaluating the individuals
separately on each trait. The forced distribution method is primarily used to eliminate
rating errors such as leniency and central tendency.
4. Forced Choice Technique: It forces to select from a series of several statements or traits, the

one which best fits the individual and one which least fits, and each of these statements
is assigned a score. Since the appraiser does not know the score value of statements,
this method prevents the rater from deliberately checking only the most favorable trait.
Moreover, the appraiser is unable to introduce personal bias into the evaluation process
because he does not know which of the statements is indicative of effective performance.
This enhances the overall objectivity of this procedure.
5. Critical Incident Method: This technique of performance appraisal was developed by
Flanagan and Burns. Under this procedure, attempts are made to devise for each job a list of
critical job requirements. Superiors are trained to be on the lookout for critical incidents on
the part of the subordinates in accomplishing the job requirements. The superiors enlist the
incidents as they happen and in the process, tend to build up a record of each subordinate
with debit on the minus side and credit on the plus side. The merit of this procedure is that
all evaluations are based on objective evidence instead of subjective rating.
6. Field Review: It is an appraisal by someone outside the employee’s own department,
usually someone form the corporate office or form the employee’s own human resources

department. The field review process involves review of employee records, an interview
with the employee, and sometimes with the employee’s superior. Field review as an
appraisal method is used primary in making promotion decisions at the managerial level.
Field reviews are also useful when comparable information is needed from employees in
the different units or locations.

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