Discuss the advantages and disadvantages of different performance appraisal methods.


CSS Solved Business Administration 2021 Past Paper | Discuss the advantages and disadvantages of different performance appraisal methods.

The following question is attempted by Miss Nimra Masood, the top scorer in CSS Business Administration papers. Moreover, the answer is written on the same pattern, taught by Sir to his students, scoring the highest marks in compulsory subjects for years. This solved past paper question is uploaded to help aspirants understand how to crack a topic or question, how to write relevantly, what coherence is, and how to include and connect ideas, opinions, and suggestions to score the maximum.

Topic Breakdown
Topic: Performance Appraisal
Subject: Human Resource Management.

Human Resource Management is one section of Business Management. For the past three years CSS examiner has continuously focused on Performance Appraisal; therefore, students cannot ignore this area if they want maximum marks on the paper.


Human resource management is divided into four broad areas: Planning, Recruiting, Training and Appraisal. To deliver goods and services company requires human resources. Individuals work for the organization to gain personal benefits; monetary or non-monetary. Thus companies look forward to different performance appraisal methods to get the most out of their available human resource. Compensations and benefits are tools used by companies to motivate their human resource to achieve performance targets.

Definition of Performance Appraisal

“Performance Appraisal is the process through which managers ensure that employee activities and output are congruent with the organizational goals.


“It is the process through which an organization gets information on how well an employee is doing his or her job.”

Performance Appraisal

Employees are an integral part of every organization. It is human resources that make, implement and deliver policies and strategies of every organization. Performance appraisal is about giving employees feedback about their performance. Performance appraisal helps identify loopholes and achievements in performances of individuals. There are many ways in which performance appraisal is done. Each way has its own benefits and drawbacks.

Picture by Miss Nimra Masood

Advantages and Disadvantages of Different Performance Appraisal Methods

I- Comparative method

This method compares the performance and output of employees working on a similar rank with the same tasks and duties.

  • Ranking:
    It is the simplest method in which employees are rated from highest to lowest performer.
  • Forced Distribution:
    The rater is asked to assign individuals to workgroups with a limited number of categories.
  • Paired Comparison:
    The manager compares every employee with every other employee in the workgroup

Advantages of the Comparative method

  1. It creates an atmosphere of good and healthy competition among employees.
  2. This method does maximum to reduce personal bias and recent behaviour bias.
  3. It provides a statistical analysis of the performance

Disadvantages of the Comparative Method

  1. Lack of objectivity is the biggest in this method
  2. It overlooks the Psychological factors of Employees
  3. It does not take into account the impact of internal and external environments on the employee performance
  4. It overlooks the fact that every employee has a different level of access to company resources.
  5. Every Employee has a varying level of skills and strengths.

II- Attribute Approach Method:

This approach follows the attribute and characteristics model.

  • Graphic Rating Scale:
    A list of traits is evaluated on a five-point rating scale.
  • Mixed Standard Scale:
    efine relevant performance dimensions and then develop statements representing good, average and poor performance along each dimension
  • Essay:
    Rater simply writes a brief narrative describing the employee’s performance.
  • Forced Choice:
    Appraiser is given a series of statements about an individual, and the rater, in turn, indicates which items are most or least descriptive of the employee.

✓ Advantages of the Attribute Approach Method:

  1. This model takes into account Psychological factors and attributes.
  2. It takes into account the different skills level that every individual has
  3. It empowers the rater to give a more analytical and reality-based appraisal.

Disadvantages of the Attribute Approach Method:

  1. Halo Error: when the evaluator perceives one factor to be of paramount importance; therefore, judgment is based on that one factor.
  2. Central Tendency: all the employees are incorrectly rated along the average scale.
  3. Personal bias is one of the biggest hurdles in this method. The supervisor has a bias towards any one personal trait such as gender, colour and religion
  4. Rigidity: Apart from the essay, all its evaluation techniques are rigid, only giving a few options to select from.

III- BehavioralApproach:

  • Critical Incident:
    It requires that a manager keeps a record of specific examples of effective and ineffective performance.
  • Behaviorally Anchored Rating Scale:
    It combines elements of the traditional rating scale and the critical incident method
  • Assessment Center:
    any evaluators judge an employee’s performance on a number of dimensions

Advantages of Behavioral Approach:

  1. It overcomes the hurdle of personal bias by using more than one evaluator.
  2. It is a combination of both output and psychological factors.
  3. It is very convenient in matter dimension that it is not rigid. It is more qualitative-based rather than quantitative.
  4. It accounts for different dimensions rather than relying on any area.

Disadvantages of the Behavioral Approach:

  1. Recent Behavior Bias: it is the natural tendency of an individual to remember the most recent behaviour of an individual. Whereas the performance appraisal is based on a certain time period. This means that employee performance should be judged for the whole assessment period instead of the recent past.
  2. Manipulating the Evaluation: supervisor, in reality, controls all the dimensions of the appraisal process; hence, they are in a position to pollute the whole process.

IV- Result Approach Method:

  • Management by Objectives:
    Top management defines goals for the employees that must be achieved for performance appraisal. The amount of targets achieved is the criteria for judging performance.
  • Productivity Measurement and Evaluation System:
    Certain goals are set for performance appraisal. Employees are motivated to achieve these targets so that they could get a good appraisal.

Advantages of Result-Based Approach:

  1. This is the best of the approaches available for performance appraisal.
  2. It involves input from employees apart from the supervisor
  3. It involves both internal and external customers in setting performance standards.
  4. Its focus is on the Psychological factors of employees to get results

Disadvantages of the Result-Based Approach:

  1. It does not account for the impact of monetary rewards on the performance of employees
  2. It overlooks the impact of the environment and work conditions.


To conclude, there are various approaches to performance appraisal, each has its own benefits and drawbacks. With innovation and technology, the appraisal process has continued to evolve, filling in many loopholes. The most effective of the techniques is the result-based approach. This technique takes into account different dimensions that could influence the performance of an employee. But there is still room for improvement to ensure that the appraisal depicts the true picture of employee performance.

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