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Problem statement: Performance appraisal is a crucial activity of HR department in any organization. Employees are appraised for several reasons, not only for reward and punishment but much more than. Most important of which is to realize the best use of human resources and to plan for future needs Two methods for performance appraisal that are discussed in this study are Management By Objective (MBO) and Assessment Centre techniques. Assessment Centre evaluation or Management by Objective is valuable because it allows a candidate to concentrate on the task at hand. Approach: The literature review and arguments were conducted to provide a systematic discussion of the study. Results: In Assessment Centre Appraisal, the different outcomes for particular tasks can be evaluated and management can assess employee’s relative proficiencies in terms of these tasks. In MBO, employees are obliged to deal with overcoming challenges. MBO and Assessment both require consistency in criteria for comparison and standardization. Conclusion: Difference organizational culture and motives for appraisal have an impact on result of both the appraisal methods. Outcomes of tasks given for assessment may different and involve different level of risks. In assessment center method employee is separated from others to appraise his performance. At times Management by Objective is effective method for comparison and judging employee performance in changing environment.

Performance Appraisal-Management by Objective and Assessment Centre–Modern Approaches to Performance Appraisal