A LITERATURE REVIEW ON PERFORMANCE APPRAISAL METHODS / TECHNIQUES PJAEE, 18(8) (2021)

A LITERATURE REVIEW ON PERFORMANCE APPRAISAL

METHODS/ TECHNIQUES

Ms. Archana V. Gaur1, Dr. Shendge Rajendra2

1Ph.D Student.
2Research Guide Punyashlok Ahilyadevi Holkar Solapur University, Solapur.

Ms. Archana V. Gaur , Dr. Shendge Rajendra , A Literature Review On Performance

Appraisal Methods/ Techniques , Palarch’s Journal Of Archaeology Of
Egypt/Egyptology 18(8), 4279-4283. ISSN 1567-214x.

Key words: Performance Appraisal, Employee satisfaction.

Abstract
Performance appraisal (PA) is a crucial technique for improving the skills of employees and
organisations. Organizations have implemented performance appraisal to monitor and
supervise relationships, growth, and development of individuals and organisations to increase
overall productivity and job satisfaction. The human resource department is tasked with
employee recruitment, selection, and retention. Retaining personnel, particularly those who
are talented and competent, has become a major challenge. Motivation initiates, guides, and
maintains an individual's goal-oriented behaviour. Employee retention is mostly determined
by motivation. To inspire and retain employees, PA guidelines are used to assess workers,
develop their competence, improve their performance, and issue awards. The focus of this
research is on a survey of several performance appraisal systems used in organisations and
the need of training. This paper focuses and analyses the literature findings on
methods/techniques of performance Appraisal and its results.

Introduction:
In this changing environment, all firms have a variety of chances to seize as well as a variety
of problems to overcome. To sustain in the change the role of management is to make
necessary changes at the workplace in accordance with the job requirements. Management
must modify policies, rules, and laws in order to stay competitive and meet the standards.
Organizations are under a lot of pressure in terms of competency for a skilled workforce, for
always improving production techniques, for attracting innovative technology entrants, and
for employees who want to attain work-life balance. Any organization's performance is
determined by the quality of its workforce, till now many firms face a number of challenges
in maintaining that workforce quality.

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Performance appraisal is the managerial activity concerned with determining the productive
contribution of the employee to the organisation. Once ascertained this information can be
used variously for determining compensation decisions, deciding on promotions, identifying
training requirements, providing feedback to the employee, transfer, demotion etc.Human
Resource Development focuses on building the best employees possible to aid the
organization's continued growth. All employees must be valued, and they must always put in
combined efforts in the labour market. This can only be accomplished by implementing a
performance appraisal system, employee training, and development programmes in a
systematic and orderly manner. Employee development in career-enhancing abilities is
constantly valued, which leads to employee motivation and retention. There is no doubt that a
motivated well trained and developed staff will be a valuable asset to the company and
thereby will increase the chances of their efficiency and effectiveness in discharging their
duties.

Literature Review
1) Venclova Katerina (2013)The article focuses on employee performance appraisal
methods used in Czech agricultural enterprises. The first section of the article looks into the
theoretical underpinnings of the term "formal appraisal" as well as employee performance
appraisal methodologies as described by Czech and international experts. Furthermore, the
paper provides staff performance appraisal methodologies that are regarded relevant for
agricultural enterprises in the Czech Republic, based on a questionnaire study. The purpose
of this paper is to determine the current condition of formal employee appraisal in a sample
group of agricultural enterprises, as well as to investigate the relationships between various
qualitative qualities. Predetermined goal-based performance appraisal, predefined standard
outcome-based performance appraisal, and assessment interviews are the most often utilised
techniques of employee performance review in agricultural enterprises, according to the
findings. Agricultural firms use these methods in particular because the results are applied to
other aspects of human resource management, such as the reward system and staff planning.
In statistical terms, the relationship between agricultural organisations' approach of employee
performance appraisal based on predefined goals and personnel planning (a human resources
management area) has been established (p-value: 0.03, Phi coefficient: 4.578).
2) Ashima Aggarwal, Gour Sundar Mitra Thakur (2013)performed a review of
performance appraisal methods Ranking, Graphic Rating Scale, Critical Incident, Narrative
Essays, Management By Objectives, Assessment Centers, BARS, 360 Degree, and 720
Degree are some of the performance appraisal approaches discussed, as well as their benefits
and drawbacks. The traditional method of performance appraisal or the modern method of
performance appraisal are used by the organisations. Organizations utilise a performance
appraisal system to assess the efficacy and efficiency of their personnel. Because each
individual approaches their task differently, a performance appraisal system is required.
Workplace performance, communication objectives, estimating employee potential, and
employee counselling are all benefits of performance appraisal. After the research, the
authors came to the conclusion that determining whether methodology is better than another
is challenging because it relies on the nature and size of the organisation. Each methodology
has its advantages and disadvantages.
3) Peter R. Scholtes (1993)the research is based on a comparison of total quality or
performance appraisals. TQM and performance appraisal, according to the author, are
incompatible. Customer awareness, systems thinking, a grasp of variance, teamwork

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appreciation, mastery of improvement methodologies, and a comprehension of the process of

personal motivation and learning are all required for TQM. TQM's very requirements are
thwarted by performance appraisal. TQM necessitates that we comprehend, control, and
improve processes in order to benefit the consumer. The goal of performance appraisal is to
ensure that an individual's behaviour is controlled to the satisfaction of his or her boss.
Managers must choose between the two approaches: one or the other, but not both.
4) Rocio de Andres (2010)looked into Distance function approaches are used to evaluate
performance. Some companies use performance appraisal to analyse their employees'
efficiency and production in order to plan their promotion, wage, and layoff policies, among
other things. Initially, only the executive staff carried out this procedure, but it has since
grown into an evaluation process based on the opinions of many reviewers, supervisors,
collaborators, consumers, and the employees themselves (360-degree method). Reviewers
analyse several signs connected to an employee's performance appraisal in such a process.
The authors of this research proposed an evaluation system in which diverse groups of
reviewers participate in the evaluation process. Given that reviewers have varying levels of
knowledge about the employee being evaluated, it appears reasonable to provide a flexible
framework in which reviewers can express their opinions on multiple finite scales based on
their expertise. The ultimate goal is to create a global appraisal for each employee that the
management team may use to make decisions about human resources strategy. In this way,
the authors suggested a mechanism for aggregating individual valuation in a framework
measure in order to achieve a global evaluation for each employee. The underlying
optimization problems can be simplified to a fairly simple Extended Goal Programming
formulation in this application.
5) Yee C. C. and Y.Y.Chen(2009)The Multifactorial Evaluation Model was studied in
relation to the Performance Appraisal System. Employee performance evaluation is critical in
managing an organization's human resource. Maintaining talented knowledge workers is
crucial as the economy shifts to information-based capitalism. However, deciding whether a
performance is "excellent," "bad," or "average" is a difficult issue for management.
Furthermore, in the absence of a formal appraisal system, superiors may prefer to rate their
subordinates' work performance informally and arbitrarily. The authors of this work
suggested a performance appraisal system that uses a multifactorial evaluation model to deal
with appraisal grades that are frequently expressed in ambiguous linguistic ways. The
proposed methodology is for assessing employee performance based on predetermined
performance appraisal criteria. The project was a partnership with one of Malaysia's leading
information and communication technology companies on its performance rating procedure.
6) Angelo DeNisi & Caitlin E. Smith(2014)Researched the design and implementation of
performance assessment and management systems to improve efficiency. The study focuses
on a model that demonstrates how enhanced performance requires solid HR practises, fair
assessment systems, effective performance management, and a clear understanding of an
organization's overall strategic goals. The model is supported by three pillars: motivation,
evaluation, and results management. The model depicts a perception of a relationship
between effort put in and expected outcomes, as well as a perception of a relationship
between the achieved result and the expected level of assessment, and a perception of a link
between the level of evaluation and the evaluation's outcome. These connections lay the
groundwork for figuring out how assessment and input might lead to better results. After
analysing the academic and practise classes, the researcher determined that utilising a
motivating method was the best way to incorporate the numerous minutes and parts that had
been obtained, and offered a research framework based on the findings. Using an expectancy-

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based motivational model, a set of study plans centred on contextual and system variables
that would help with appraisals and performance management, resulting in increased
individual performance, were established.
7) Rafiqul (2006) According to this notion, an effective performance evaluation system is a
tool for evaluating employee performance and recommending ways to increase individual
and organisational efficiency. Employee performance evaluations using the AHP (analytic
hierarchy process) on ISMS personnel are the topic of this case study. AHP can be used to
assess employee output in terms of quantity and quality of work, planning and organisation,
initiative and commitment, collaboration and cooperation, communication, and external
influences. The usage of AHP in the ISMS Company has a number of benefits, including the
fact that it is quick and easy to adopt due to its standardisation, and it may meet subjective
needs. It instantly assembles a team of decision-makers to address a specific issue.
8) Abteen Ijadi Maghsoodi (2018)The selection of appropriate Performance Appraisal (PA)
techniques and financing scales for organisations in today's dynamic and agile environments
is a challenging subject. Performance appraisal has evolved into a strategic strategy to
merging company policies with human resource activities in modern enterprises. Finding the
best PA approach is more difficult due to the presence of various elements in the decision-
making process. The current study uses a multiple criteria decision analysis method,
MULTIMOORA integrated Shannon's entropy significant coefficient, to examine PA
methods. Using correlation coefficients of the final entropy values, the final rankings of the
organizational components are compared to TOPSIS and TOPSIS incorporated Shannon's
entropy approaches.A case study on the optimal PA method selection is analysed by
identifying the criteria and alternatives based on the literature and expert comments of the
case study using two approaches, MULTIMOORA and Entropy MULTIMOORA. Finally,
the selected optimal method used in the case study and results are displayed and detailed with
a thorough example after determining the ideal PA technique, which is 360-degree feedback.
9) Manish Khanna(2014) Performance appraisal is significant since it is an important part of
any company's human resource strategy. Managing individual and team performance to
accomplish corporate goals has a clear value. Performance appraisal is a significant
instrument in the hands of personal management because it achieves the department's major
goal of appraising the individual's worth, which is the major goal of the department of people
development. Employees and their supervisors can collaborate to improve job results and
satisfaction through the performance management process. When both the employee and the
supervisor take an active role and work together to achieve the organization's goals, this
approach is most effective. The management and the employee meet once a year for an
appraisal. However, various trends are altering the appraisal's style and interaction. The
authors reviewed certain unstructured appraisal methodologies, classic methodologies, and
new performance appraisal strategies in this paper.
10) Yoganandan, Saravanan and Priya (2013) A pilot study of 56 employees focused on
the performance evaluation system and the organization's growth. It looked at how the
present PAS aids employee career development as well as employee participation in the
performance evaluation process. The current evaluation method, which uses the IBHAR
software, is well received by employees. Participation of employees in the development of
performance assessment goals and priorities. The value of an employee's strengths and faults
is underlined during the appraisal process. The result is good, indicating that employees are
always improving in order to reach the company's growth goals.

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Conclusion:
Employees are in charge of running and steering organisations. Employee performance
contributes to the organization's growth and stability. Performance appraisal is a crucial
technique for evaluating personnel. The performance appraisal is always done by and for the
people (managers, employees). The evaluation technique is determined by the organisation,
and the manager's job is to implement it by gathering relevant data from the employee and
providing an output that is without any biases. The papers were examined with the goal of
learning about the various tactics and procedures used by organisations for performance
evaluation. The results of a performance appraisal provide the organisation with
recommendations for making administrative and developmental decisions. Performance
appraisal assessments are linked to decisions about an employee's promotion, awards,
transfer, training, and career planning, etc. As a result, organisations must implement an
appraisal process that aids in individual career development as well as organisational growth.

References:
1. Venclová, K., Salkova, A., & Kolackova, G. (2013). Identification of employee
performance appraisal methods in agricultural organizations. Journal of
Competitiveness, 5(2).
2. Aggarwal, A., & Thakur, G. S. M. (2013). Techniques of performance appraisal-a
review. International Journal of Engineering and Advanced Technology (IJEAT), 2(3), 617-
621.
3. Scholtes, P. R. (1993). Total quality or performance appraisal: choose one. National
Productivity Review, 12(3), 349-363.
4.De Andres, R., García-Lapresta, J. L., & González-Pachón, J. (2010). Performance
appraisal based on distance function methods. European Journal of Operational
Research, 207(3), 1599-1607.
5. Yee, C. C., & Chen, Y. Y. (2009). Performance appraisal system using multifactorial
evaluation model. World Academy of Science, Engineering and Technology, 53(2009), 231-
235.
6. DeNisi, A., & Smith, C. E. (2014). Performance appraisal, performance management, and
firm-level performance: A review, a proposed model, and new directions for future
research. Academy of Management Annals, 8(1), 127-179.
7. Islam, R., & bin Mohd Rasad, S. (2006). Employee performance evaluation by the AHP: A
case study. Asia Pacific Management Review, 11(3).
8. Maghsoodi, A. I., Abouhamzeh, G., Khalilzadeh, M., & Zavadskas, E. K. (2018). Ranking
and selecting the best performance appraisal method using the MULTIMOORA approach
integrated Shannon’s entropy. Frontiers of Business Research in China, 12(1), 1-21.
9. Khanna, M., & Sharma, R. K. (2014). Employees performance appraisal and its
techniques: a review. Asian Journal of Advanced Basic Sciences, 2(2), 51-58.
10. Yoganandan, G., Saravanan, R., Priya, N., & Ruby, N. (2013). A study on performance
appraisal system in EID Parry (India) Ltd, Pugalur, Tamil Nadu, India. IJSR-International
Journal of Scientific Research, 2(8), 142-145.

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