Relative Standards Methods and Outcomes Methods

Relative Standards Methods

In this appraisal method, evaluating an employees performance by comparing the employee with other employees. The important relatives methods are ranking, and paired comparison.

Ranking Method

This is the simplest and oldest method of merit rating. This method requires the evaluator merely to list employees in order form highest to lowest.

Paired Comparison

This method compares each employee with all others in the group, one at a time. After all the comparisons on the basis of the overall comparisons, the employees are given the final rankings.

The paired comparison method is calculated by taking the total of [N(N-10] / 2.A score is obtained for each employee by simply counting the number of pairs in which the individual is the preferred member. It ranks each individual in relationship to all others on a one-on-one basis.

Outcomes Methods

Employees are evaluated on how well they accomplished a specific set of objectives determined as critical in the successful completion of their job.

Management by objectives (MBO)

MBO represents a modern method of evaluating the performance of personnel. Thoughtful managers have become increasingly aware that the traditional performance evaluation systems are characterized by somewhat antagonistic judgments on the part of the rater.

There is a growing feeling nowadays that it is better to make the superior work with subordinates in fixing goals. This would inevitably enable subordinates to exercise self- control over their performance behaviors.

The concept of ‘Management by Objectives’ (MBO) was first given by Peter Drucker in 1954. It can be defined as a process whereby the employees and the superiors come together to identify common goals, the employees set their goals to be achieved, the standards to be taken as the criteria for measurement of their performance and contribution and deciding the course of action to be followed.