What are the modern methods of appraisal in accounting?

Appraisal methods are categorised into two types. Each method has its own merits and de-merits. One of the methods used by companies are modern methods which are divided into following types

MBO

• MBO means Management by Objectives. This concept was developed by Peter F.Drucker in 1954. It is the process where, both superior and subordinates identifies goal for each individual and define those by identifying their areas of responsibilities.

• This method follows goal setting, performance, comparison and reviews. Its main drawbacks are setting un measurable goals, time taking, no trust.

Behaviour anchored

• It varies with performance dimensions. Benefits are combinations of narratives, critical and quantified. It involves generating incidents, developing dimensions, reallocating, scaling and developing finial BARS.

Assessment centres

• In this method, all managers participate in designed simulated exercises. The assesse conduct various activities like basket exercise, simulations, role playing etc. These are essential for job performance. Feedback consists of strength and weaknesses and are given at the end of the exercise.

• This method provides accurate evaluation in selecting and promoting executives. These are time taking and discouraging for others. Sometimes, it provides unhealthy environment among competitors.

360 degree

• 360-degree appraisals evaluate skills, abilities, behaviours and necessary information from their superiors, sub-ordinates, clients, customers and from peers. All this information is gathered, computerised and individual reports are prepared and rated.

• This method will provide appropriate and realistic information.

• On the other hand, employee can provide false information regarding others.

Cost accounting

• In this method, performance is evaluated based on monetary benefits.

• Factors considered while evaluating this process are unit wise average value of service, quality of product rendered, incurred overhead cost, relationships with others, damages, wastage and time spent by supervisor in appraising in terms of monetary side.