Meaning: - Performance appraisal is a process of evaluating work performance of employees. The purpose of appraisal is to individual and organizational effectiveness.

Definition: - “Performance appraisal is the systematic description of an employee’s job relevant strengths and weaknesses.”
                                                                                                                                             Defined be …………… (Wayne Cascio)
There are several methods or techniques of Performance appraisal. The most common method can be broadly divided into two 1. Traditional Method                                                            groups.                                                                 2. Modern Methods

1.            Check List: - A list is prepared containing various work related statements such as: Quality of work, speed of work, attitude towards work, etc. Against the list, the employees are rated. The rater may mark against the yes or No various statements. The main advantages are its simplicity, convenience, less time consuming and less expensive.

2.            Confidential Reports: -This is an old and traditional method of appraising employees. A confidential report is a report on the subordinate’s strength and weaknesses. The confidential report is used for variety of personal decisions such as transfers, promotion, etc.

3.            Critical Incident Method: -In this method, the rater records important incidents involving the ratee. If the ratee performs well in such incidents, then he gives high scores and vice-versa.

4.            Ranking Method: -There is various ranking method which are commonly used to evaluate the performance of the employees. Ranking methods offer convenience to evaluate the performance and they are less time consuming. The ranking methods used are:  1. Simple ranking method.   2. Alternation ranking method.   3. Paired comparison method. method

4.            Graphics Rating Scale: - In this method, the raters use a graphic scale to appraise certain specific factors such as quality of work, quantity of work, dependability, etc. the graphic scale method is simple to understand. Easy to conduct and less time consuming.

5.            Narrative Essay: - The simplest method is the narrative essay. In this, the rater describes in detail an employee’s strengths and weaknesses and potential, together with suggestions for improvement.

7.            Role Analysis: - Role analysis is a process of analyzing the role of a manager in relation to roles of other managers who are affected by his performance. The role set members can conduct performance appraisal of the focal(crucial) role. The focal (important) role can make necessary changes to improve his performance.

8.            Assessment Center: - This technique is used for performance appraisal as well as selection and training. Some firms use this technique of performance appraisal, especially at the time of promoting managers to higher levels.

9.            Management by Objectives (MBO): - This technique can be used to measure the performance of subordinate or lower level managers. In MBO, the processes involved are as follows: 1. Superior and subordinate managers jointly define common goals. 2. Jointly frame plans. 3. Subordinate manager implements the plans. 4. Joint review of the plans.

10.          Behaviorally Anchored Rating Scale (BARS): -It is a variation of simple graphic scale. In this case, the behavior or attitude towards the job appraised. Employees who have a positive attitude towards the job may make every effort to upgrade and update their knowledge and skills to handle their activities. Such employees would be given higher performance appraisal.

11.          360 Degree Appraisal: - Performance Appraisal is conducted by various parties such as superiors, subordinates, clients, colleagues, panel of experts, etc. this technique gives a balanced performance appraisal  of the ratee. All the raters try to be as objective as possible in their rating.

12.          Human Resource Accounting (HRA): - HRA deals with cost and contribution of human resources to the organization. The cost of the employee includes cost of selection, training, compensation, etc. employee contribution is the money value of employee service to the organization. Employee performance can be rated as positive when contribution is more than the cost and vice versa.