Under this method certain categories of abilities are defined in advance such as excellent, verygood, average, poor, very poor, outstanding etc.

The correct answer is: B. Grading method

A grading method is a performance appraisal method that uses a scale of predetermined categories to rate employee performance. The categories are typically defined in advance and may include terms such as “excellent,” “good,” “average,” “poor,” and “very poor.” The rater then assigns the employee to one of the categories based on their performance.

Grading methods are relatively easy to use and understand, and they can be used to compare the performance of employees within a group. However, they can be subjective and may not accurately reflect an employee’s true performance.

The other options are incorrect because:

• A ranking method is a performance appraisal method in which employees are ranked against each other.
• A paired comparison method is a performance appraisal method in which employees are compared two at a time.
• A graphic rating scale is a performance appraisal method in which employees are rated on a scale of predetermined categories.