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Discuss the modern methods of performance appraisal.
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(1) Assessment Centre Method—The purpose of this method is to test candidates in a social situation, using a number of assessors and variety of procedures. The feature of the assessment centre method is job related simulations. These simulations involve characteristics that managers feel are the important to the job success. The evaluators observe and evaluate participants as they perform activities commonly found in these higher level jobs.
(Under this method, many evaluators join together to judge employee performance in several situations with the use of a variety of criteria) It is used mostly to help select employees for the first level (the lowest) supervisory positions. Assessments are made to determine employee potential for purposes of promotion. The assessment is generally done with the help of a couple of employees and involves a paper- and-pencil test, interviews and situational exercises. Some of the other features of this system are:
(i) The use of situational exercises (such as an in-basket exercise, business game, a role-playing incident and leaderless group discussion);
(ii) Evaluators are drawn from experienced managers with proven ability at different levels of management;
(iii) They evaluate all employees, both individually and collectively, and each candidate is given one of the four categories; more than acceptable, less than acceptable and unacceptable;
(iv) A summary report is prepared by the members, and a feedback on a face-to-face basis is administered to all the candidates who ask for it.
Purpose of Assessment Centres
Assessment centres arc used for the following purposes:
To measure potential for first level supervision, sales and upper management positions; and also for higher levels of management for development purposes.
To determining individual training and development needs of employees.
To select recent college students for entry level positions.
To provide more accurate human resource planning information.
To make an early determination of potential.
To assist in implementing affirmative action goals.
To make this method successful, it is necessary that heavy emphasis must be placed on clear statement of goals, the obtaining of top management commitment, job analysis, assessor training etc.
Human Asset Accounting Method —
(The human asset accounting method refers to activity devoted to attaching money estimates to the value of a firm's internal human organisation and its external customer goodwill. If able, well-trained personnel leave a firm, the human organisation is worthless; if they join it, its human assets are increased. If distrust and conflict prevail, the human enterprise is devalued. If teamwork and high morale prevail, the human organisation is a very valuable asset.
The current value of a firm's human organisation can be appraised by developed procedures, by undertaking periodic measurements of "key causal" and "intervening enterprise" variables. The key causal variables include the structure of an organisation's management policies, decisions, business leadership, strategies, skills and behaviour. The intervening variables reflect the internal state and health of an organisation. They include loyalties, attitudes, motivations, and collective capacity for effective interaction, communication and decision-making. These two types of variable measurements must be made over several years to provide the needed data for the computation of the human asset accounting.
This method is not yet very popular.
(3) Behaviourally Anchored Rating Scales (BARS) —This is a new appraisal technique which has recently been developed. Its supports claim that it provides better, more equitable appraisals as compared to other techniques. The procedure for BARS is usually five stepped.
1. Generate Critical Incidents—Persons with knowledge of the job to be appraised (job holders/ supervisors) are asked to describe specific illustrations (critical incidents) of effective and ineffective performance.
2. Develop Performance Dimensions—These people cluster the incidents into a smaller set of performance dimensions. Each cluster is then defined.
3. Reallocate Incidents—Any group of people who also know the job then reallocate the original critical incidents. They are given the cluster's definitions, and critical accidents, and asked to redesign each incident to the dimension it best describes. Typically a critical incident is retained if some percentage (usually 50 lo 80%) of this group assigns it lo the same cluster as the previous group did.
4. Scale of Incidents—This second group is generally asked to rate (7 or 9 point scales are typical) the behaviour described in the incident as to how effectively or ineffectively it represents performance on the appropriate dimension. „
5. Develop Final Instrument—A subset of incidents (usually 6 or 7 per cluster) are used as "behaviour anchors" for the performance dimensions. 
Though BARS technique is more time-consuming and expensive than other appraisal tools, yet it has got certain advantages, such as:
1. A more accurate gauge, since BARS is done by persons expert in the technique, the results are sufficiently accurate.
2. Clear Standards. The critical incidents along the scale help to clarify what is meant by "extremely good" performance, "average" performance and so forth.
3. Feedback. The use of critical incidents may be more useful in providing feedback to the people being appraised.
4. Independent dimensions. Systematically clustering the critical incidents into 5 or 6 performance dimensions, helps in making the dimensions more independent of one another.
5. Rater - Independence. The technique is not biased by the experience and evaluation of the rater.
(4) Management by Objectives: This is result-oriented appraisal. The approach of merit rating is based on the quantitative measurable performance goals often agreed jointly by superior and subordinates. Instead of asking the superior to rate his subordinates under this approach each subordinate is requested to set for himself short-term goals by which may improve his own efficiency and that of his department. The senior executive will also help his subordinates to set goals for themselves. Senior officer will discuss with his subordinate what is required to meet their goals and adjust them consistent with goals of other subordinates and the organisations as a whole. This approach was suggested by Peter F. Drucker.
