Here is a compilation of term papers on ‘Performance Appraisal’ for class 11 and 12. Find paragraphs, long and short term papers on ‘Performance Appraisal’ especially written for school and college students.

Term Paper on Performance Appraisal

Term Paper Contents:

  1. Term Paper on the Meaning and Objectives of Performance Appraisal
  2. Term Paper on the Methods of Performance Appraisal
  3. Term Paper on the Goal-Setting Approach to Performance Appraisal
  4. Term Paper on the Requirements of Effective Performance Appraisal
  5. Term Paper on the Merits of Performance Appraisal
  6. Term Paper on the Limitations of Performance Appraisal

Term Paper # 1. Meaning and Objectives of Performance Appraisal:

Performance Appraisal refers to rating or evaluation of worth or merit or effectiveness. It implies formal and systematic evaluation of performance on the job. This is done by the supervisor or any other person trained and well versed in the technique of personnel appraisal. It compares the individual employee in a work group in terms of personnel qualities end drawbacks and the requirements of their jobs. It refers to the task of rating or assessing the performance of employees.


This is also known by other names like Employee appraisal, merit rating, personnel rating, Efficiency rating. Every individual is different in his abilities and aptitudes. These differences are natural to a great extent and cannot be eliminated even by giving the same basic education and training to them. There is bound to be differences in the quantity and quality of performance of employees on the same job.

So it is necessary for the management to spot out talents to reward better performers and rectify wrong placements and motivate performers below par. This is done with the object of improving performance and to develop future managers.

According to Edwin B. Flippo, “Merit rating is a systematic, periodic and, so far as humanly possible, an impartial rating of an employee’s excellence in matters pertaining to his present job and his potentialities for a job.”

In the words of Dale S. Beach performance appraisal is “The systematic evaluation of the individual with respect to his performance on the job and his potential for development.”


From these definitions the following features can be identified:

a. It is a systematic appraisal undertaken periodically.

b. It is a scientific evaluation of performance and quality designed in the objective standards. It is an impartial review of performance.

c. It is a continuous process undertaken on regular basis, normally a year.


d. Both personal qualities and performance on the job are correlated. This is with the object of spotting talents and to develop employee’s potentials.

e. This is done both for managers and employees at various levels.

The objectives of performance appraisal are:

a. To provide a record of each employee’s performance for the purpose of determining wages and his incentive pay.


b. To know that the employees are appointed for suitable jobs and to effect a transfer wherever necessary.

c. To know the quality of performance of each employee and to improve their performance by identifying their strength and weaknesses.

d. To design a suitable training programme for improving performance.

e. To identify employees who have adequate potential for promotion and development.


f. To facilitate the employee to know his performance and give him an opportunity to improve his potentials.

Term Paper # 2. Methods of Performance Appraisal:

The methods of Performance Appraisal may be broadly classified into two categories:

a. Appraisal based on traits of employees.

b. Appraisal by results.


The various methods of performance appraisal based on traits are listed below:

1. Straight ranking method

2. Man-to-man comparison method

3. Grading method


4. Graphic scales method

5. Check-list method

6. Forced choice description method

7. Critical incidents method

8. Descriptive evaluation method

9. Group appraisal method


10. Field review method.

1. Straight Ranking Method:

It is a simple process of placing employees in a rank according to their job performance. The employees are ranked in a descending order on their overall performance on the job. This method is the best provided the number of employees is very small and the work done is of quantitative nature.

This method is objected to on the following grounds:

(a) It is very difficult rather undesirable to compare human beings as they are incomparable and comparison is a complicated process.

(b) The system does not indicate the degree of difference between human beings.


A variation of the ranking method is “Paired Comparison.” In this method each employee is compared with other man in pairs. For example, there are five employees A, B, C, D and E. A’s performance is compared with that of B, C, D and E individually. The results of the decisions are tabulated and a rank is allotted from the number of times each person is considered to be superior.

The paired comparison method gives a more reliable rating thank the rank method. The limitation of this method is that this is more tedious to construct and use. It cannot be used for periodic employees ratings as it does not make evaluation of any improvement in the employees that might have been made over a period of time.

2. Man-to-Man Comparison Method:

Other name factor comparison method. In this method certain factors are selected for the purpose of comparison like leadership initiative, dependability, reliability etc., A five point master scale is designed for each factor by the rater. A scale of man is also created for each factor putting the best at the lop and the worst at the bottom, the average man is in the middle of the scale, and one below the average and one above the average.

After establishing the scale the employee is compared with the man in the scale and certain score for each is awarded to him. So each employee is compared with the key man. In the scale for each factor, one factor at a time, instead of comparing the man as whole. The limitation of this method is the designing of a master scale for this purpose is a complicated affair.

3. Grading Method:


In this system, certain categories of worth are established in advance and these are carefully designed. Actual Performance of each employee is then compared with these grade definitions, and each person is allocated to the grade which describes his performance.

The grading system is modified into a forced distribution system in which certain percentage is fixed for each grade like 10% of the total personnel must go in to the top grade, 20% to the second and so on. It also taxes the rater’s performance. This is not applicable for a small group.

4. Graphic Scale Method:

In this method, scales are established for a number of specified factors and qualities. Numerical values are assigned to each quality on the scale. Three to five degrees are possible for each factor. The selection of factors to be measured is the most important aspect of the system.

There may be two types of factors:

(1) Employee characteristics and


(2) Employee contributions.

The employee characteristics denote the quality of the person like dependability, ability, initiative, leadership etc.; contribution refers to quality and quantity of performance of employees, assumption of responsibilities and specific per­formances. The number of factors used varies from nine to twelve. The rates are to evaluate and report the performance of personnel.

The main drawbacks of this method are:

(a) It imposes a heavy burden on the supervisor.

(b) The evaluation of the rater is biased.

(c) Ratings tend to cluster on the high side under this system.


(d) A supervisor may tend to rate his men high to avoid criticism.

5. Check List Method:

Other name Questionnaire method. In this method a check list questionnaire is prepared in the form of series of questions concerning the employee and his behaviour. The employee answers the questions ‘Yes or no’. Based on the answers the rating is made by the personnel department. Weight or values are attached to the individual traits and rating up to this level is gathered on the rating sheet.

The weights are averaged and the employee is evaluated. The preparation of weighted check list is to be entrusted to persons who are thoroughly acquainted with the job and perfect in preparing weighted statements. After completing the process the ratings are placed on separate cards for future reference.

The limitations of this method are:

(a) It employees a lengthy procedure of evaluating employees.

(b) It is a costlier method and it involves more strain on the financial resources of the organisation.

(c) Establishing a separate procedure for each job is required for evaluating diverse jobs.

(d) The system is subject to bias or prejudice of the rater.

6. Forced Choice Description Method:

The main object in this method is to reduce or eliminate the possibility of rater’s bias. This is attempted by forcing the rater to choose among descriptive statements. The statements may be favourable or unfavourable.

The rater may feel that neither of the two statements in the pair is applicable but he must select the one that is more descriptive. Only one of the statements is correct in identifying the better performance and the scoring is kept secretly from the raters.

The merits of this method are:

a. It is easy to understand and administer.

b. Eliminates the room for subjective judgement.

c. Ratings are spread out in the form of normal distribution and it is open to criticism.

The limitation of this method is the system is very costly to install, lengthy and time consuming as well.

7. Critical Incident Method:

The basic assumption of this approach is that they are certain key acts of behaviour of the employee that make the difference between success and failure on the job. The rater records such events which occur in the performance of rate’s job. A critical incident means a significant act by an employee exceeding or failing any of the requirements of the job.

Such incidents may be:

(a) Resisted the implementation of a change.

(b) Became upset over work.  

(c) Refused to help a fellow worker.

(d) Suggest improvements in work method.

(e) Convince fellow workers to accept management decision.

(f) Accept new ideas.

(g) Refused a chance to take further training.

The incidents so collected are weighted and ranked in the order of frequency and importance. This provides a sound basis for the appraisal of an employee by the personnel department. This method requires every supervisor to record all such significant incidents in each employee’s behaviour which indicate effective or successful action and those which indicate ineffective or poor behaviour. The recording is made in a separate notebook specially designed for this purpose.

The problems which act as limitations are:

(a) The occurrence of critical events is not frequent.

(b) It will be difficult to rate an employee if the critical incident does not occur.

(c) It may be difficult for a supervisor to decide what is critical or exceptional incident.

(d) Here again the human bias may appear in recording the critical incident.

8. Descriptive Evaluation Method:

The rater prepares a written descriptive report on the performance of the employee on the job. This includes the factual and concrete description of his personality of behaviour, quality and quantity of work performed by him and his work level. The report of the supervisor gives a complete description of what the supervisor thinks of the employee.

This system is applicable for senior managerial positions. The rater in this method should be more observant and analytical. The main defect of this method is that it demands more time than average.

9. Group Appraisal:

As the name the appraisal is made by a group of supervisors who sit together and evaluate the performance of the employee. The group consists of immediate supervisor and two or three supervisors of higher managerial staff. They have knowledge about employee, job and organisation. This method is objective in appraisal and constructive in approach and eliminates bias. The system is time-consuming.

10. Field Method:

Other Name Interview. In this method the supervisors are interviewed by an expert from the personnel department. Such expert questions the supervisor to obtain all pertinent information on each employee and makes a record.

They are also asked to give suggestions for improvement in employee’s performance. These notes are sent to supervisor concerned for his approval or modifications. So the employee rated completely. This is suitable for large organisations provided the interviewer is competent and supervisors co-operate with the interviewer.

Term Paper # 3. Goal-Setting Approach to Performance Appraisal:

This is also known as Management by Objectives or “Work planning and review”. This is the behavioural approach to subordinate appraisal. The essential feature of this approach is mutual establishment of job objectives and performance of employees is measured against those predetermined objectives.

The application of goal setting approach to performance appraisal involves the following steps:

(a) The subordinate discusses his job descriptions with his superior and agree on the contents of his job and the key result areas.

(b) The subordinates prepares his plan for specified period may be for six months to one year. Goals or targets are set which are to be achieved at the end of the period by the subordinates.

(c) The subordinate and superior have mutual consultations regarding evaluating criteria and the factors for evaluation is mutually discussed and arrived at.

(d) Establish check points for the evaluation of progress and the ways for knowing progress are selected.

(e) Superiors discuss the results and his evaluation with the subordinates. Deviations are noted, corrective actions if necessary, are suggested and mutually agreed targets are fixed for the next period.

This approach to performance appraisal based on clear and time bound standards mutually agreed upon by the superior and subordinate. In performance evaluation quantitative terms are fixed. Where quantitative terms cannot be established it is better to have qualitative standards.

This approach can be successfully applied provided the following elements are present:

(i) Good job descriptions are available to help setting goals for different positions.

(ii) Superior has trust in subordinates as to establish meaningful goals.

(iii) The emphasis should be on problem solving rather than critical discussion of the performance of the subordinates.

The main advantages of appraisal by results are:

(a) It is an improvement over trait approach because it is not subjective and is free from basis.

(b) The approach is operational because appraisal is a part of manager’s job.

(c) The superior and the subordinate are engaged in goal setting and evaluating performance. So this leads to greater satisfaction, agreement, greater comfort and less tension and hostility between employee and management.

(d) Its emphasis is on training and development of individuals. It is a problem solving approach rather than tell and sell approach.

(e) This approach has a built-in device of self-appraisal by subordinates because they know their goals and the standards by which their performance will be measured.

(f) The involvement of an employee in setting his own goals will improve his conceptual skill. He will have better understanding of what is expected of him. This will improve his job performance.

The goal setting approach suffers from the following limitations:

(a) This approach is not applicable where goal setting is not possible in quantitative terms.

(b) Goal setting approach focuses only on work achievement and it does not consider the fact that performance is influenced by some external factors. No discount is allowed for external factor by this approach.

(c) This is not easy to administer as it involves considerable time, thought and contact between superior and subordinate. In case of large span they do not have time to discuss and set standards.

(d) The emphasis of this approach is training and development. It is urged that critical evaluation and modification to improve are incompatible. But, in practice, it is not possible to forego the critical aspect of performance appraisal.

(e) This approach of appraisal is appropriate for managers and supervisory staff who can understand this approach.

(f) The basic assumption of goal setting is to develop mutual trust and confidence throughout the organisation. But in practice status differentials and cautious attitudes of people do not permit an open dialogue between superiors and subordinates. This reduces the effectiveness of the approach.

Term Paper # 4. Requirements of Effective Performance Appraisal:

An effective performance appraisal programme must fulfill the following requirements:

1. Determination of Purpose:

Before initiating a programme of performance appraisal it is essential to determine its objectives. The objective of the appraisal programme may be either to appraise actual performance of individuals on their present jobs or to determine the potential of individuals to do higher jobs or both. Sometimes performance appraisal programmes are associated with specific objectives like training and development, transfer and promotion, increase in pay etc.

2. Selection and Training of Appraiser:

The rater in appraisal is the superior who is conversant with the individual and his job. But this approach is subject to personal bias. To avoid bias and subjectivity the rater is to be trained properly. It is also suggested that the appraisal is to be conducted by two persons independently to have objective results. Further merit rating is to be done on objective factors covering knowledge of work, ability to do the work, quality and quantity of output, personal and special qualities of em­ployees.

3. Establishing Standards of Performance:

For evaluating the performance of each individual on their jobs standards are to be established to measure performance. The standards are to be laid down in clear-cut terms and reduced to writing. The subordinates should be made to understand the standards for evaluation. The criteria used for measurement of performance will vary from job to job. The commonly used criteria are- optimum utilisation of resources, productivity, reduction in cost, improvement in profitability, realisation of enterprise objectives, improvement in quality of product and services.

4. Frequency of Appraisal:

This is a continuous process for the supervisor. In many organisations this may be conducted once or twice in a year. The frequency is to be determined by the objectives of appraisal and the level of employees to be appraised.

5. Designing of Proper Forms:

It is essential to keep a record of performance appraisal as it facilitates decisions regarding transfer, promotion etc. So the organisation is to develop suitable forms for various types of employees like clerical, supervisory, operative and managerial. The contents of the forms are to be determined by the objectives of appraisal.

Term Paper # 5. Merits of Performance Appraisal:

Performance appraisal is a very significant activity in organisations. It provides data about past, present and expected performance of the employees which is helpful in taking decisions on selection, training and development increase in pay, promotion, transfer etc.

The advantages of performance appraisal are:

1. If helps the supervisor to evaluate performance systematically and periodically. This facilitates him in the assignment of duties.

2. This facilitates the guiding and correction of employees with the object of improving their performance.

3. The ability of the staff is recognized and they can be suitably rewarded.

4. This can be used as a basis for promotion and transfer. Promotion is considered in cases if the performance is better.

5. Ratings can also be used to evaluate training programmes. Weaknesses of employees are revealed by merit rating and training programmes can be modified accordingly.

6. Merit rating acts as an incentive to employees to better their performance and helps to improve their rating.

7. Scientific and systematic merit rating can minimise grievances and develop a confidence among employees as they understand impartial evaluation. The records protect the management against any un­necessary changes of discrimination.

Term Paper # 6. Limitations of Performance Appraisal:

The limitations of performance appraisal are:

1. The inclusion of assessment factors is irrelevant the results of merit rating may be inaccurate.

2. Giving proper weightage to many different qualities may lead to problems.

3. Factors like initiative and personality of the employees are highly subjective. So actual rating may not be scientific.

4. To make the ratings to be free from bias the supervisors must have the critical ability to assess objectively the performance of subordinates. Otherwise it will be a failure.