Techniques of Performance Appraisal

Comparison of Appraisal Techniques

It is important to consider which appraisal technique or set of techniques may be most appropriate for a given situation. Although there is no simple answer to this question, we can consider the various strengths and weaknesses of each technique. This is done in  Table 8.6. It is important to keep in mind that the appropriateness of a particular appraisal technique is in part a function of the purpose for the appraisal. For example, if the purpose of the appraisal is to identify high potential executives, then assessment centers are more appropriate than rating scales.

Major Strengths and Weaknesses of Appraisal Techniques
  Rating Scales Critical Incidents BARS BOS MBO Assessment Centers
Meaningful dimensions Sometimes Sometimes Usually Usually Usually Usually
Amount of time required Low Medium High Medium High High
Development costs Low Low High Medium Medium High
Potential for rating errors High Medium Low Low Low Low
Acceptability to subordinates Low Medium High High High High
Acceptability to superiors Low Medium High High High High
Usefulness for allocating rewards Poor Fair Good Good Good Fair
Usefulness for employee counseling Poor Fair Good Good Good Good
Usefulness for identifying promotion potential Poor Fair Fair Fair Fair Good

Table 8.6

As would be expected, the easiest and least expensive techniques are also the least accurate. They are also the least useful for purposes of personnel decisions and employee development. Once again, it appears that managers and organizations get what they pay for. If performance appraisals represent an important aspect of organizational life, clearly the more sophisticated - and more time-consuming - techniques are preferable. If, on the other hand, it is necessary to evaluate employees quickly and with few resources, techniques such as the graphic rating scale may be more appropriate. Managers must make cost-benefit decisions about the price (in time and money) they are willing to pay for a quality performance appraisal system.


Concept Check

  1. What are the techniques and scales used in performance appraisals?
  2. What are MBOs, and how do they relate to performance appraisals?
  3. What are assessment centers?