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Critical Incident Appraisal - Meaning & Example

Published by MBA Skool Team in Human Resources Terms Last Updated: May 13, 2024Read time:

What is Critical Incident Appraisal?

Critical Incident Appraisal is a performance appraisal technique, where the employer keeps a log of negative and positive behavior (critical incidents) of his/her subordinates. After a specific period, say every 6 months, superiors and subordinates meet to discuss the subordinate’s behavior and performance using the recorded incidents as examples. Critical incident appraisal takes into account the qualitative behavior of an employee.

Companies use the critical incident method of appraisal for evaluating the employees as a part of the performance appraisal process. Some managers ask their employees to record their own critical behaviors. This makes the employers’ job easy as he doesn’t have to be present everywhere. After compiling these incidents, the superior can provide examples of good or bad behavior and rate his subordinates accordingly. This helps the supervisor appraise his subordinates based on concrete examples of his performance. It also takes into account the behavior of a particular employee throughout the year and not just the recent performance. Critical Incident Appraisal also helps the employees know about their behavior and they can work on the deficiencies to improve their overall performance.

Limitations of Critical Incident Appraisal

1. No numerical base

2. Difficult to compare the performances of all the employees

3. Difficulty in making salary decisions

Example of Critical Incident Appraisal

The objective for a manager was to reduce the costs of the stored goods. However, there was a 15% increase in the inventory cost. The following can be undertaken to ensure that costs be saved:

Continuing Duties


Critical Incidents

Schedule production for plant

90% utilization of labor and machineries in plant; orders are to be delivered on time.

This instituted new production scheduling system; decreased late order delivery by 10% last month; increased utilization of machinery in the plant by 20% from last month.

Supervise procurement of raw materials and inventory control

Minimize inventory cost but also keep adequate supplies in hand

Inventory storage cost Increased by 15% last month; over ordered parts “A” and “B”, and under ordered part “C”.

Supervise machinery maintenance

No shutdowns should be there due to faulty machinery

Instituted new preventive maintenance system for plants; prevented a machine breakdown by discovering a faulty part.

Hence, this concludes the definition of Critical Incident Appraisal along with its overview.

This article has been researched & authored by the Business Concepts Team which comprises of MBA students, management professionals, and industry experts. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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