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Disadvantages of performance appraisal

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I. Contents of getting disadvantages of performance appraisal

Performance-appraisal systems can become a key component of a small business's performancemanagement program. These systems consist of appraisal forms and instructions for supervisors
to use in their annual evaluations of their employees' work. Although performance-appraisal
systems offer several benefits, there can be disadvantages to the systems and the manner in
which they're used.
Leadership Training
Before a business launches its performance-appraisal system or when it hires a new supervisor or
manager, the company provides leadership training on how to effectively evaluate job
performance. Leadership training consists of how to write a performance-appraisal document as
well as how to conduct a performance appraisal meeting. However, one of the disadvantages of
performance-appraisal systems is that the employer-provided training is woefully inadequate for
preparing supervisors to provide unbiased feedback to employees in a manner that motivates
workers to strive for higher performance ratings. Companies might train supervisors on the
mechanics of a performance appraisal system and disregard the importance of using performance
feedback to inspire team members.
Negative Approach
Supervisors and employees might come to dread performance-appraisal season. Supervisors who
work for small businesses might feel the time it takes to prepare an employee's performance
appraisal could be better spent on other job tasks. Small businesses often have to make do with
limited staff or a smaller workforce. This puts supervisors in a bind when they have to devote too

much time to preparing for an employee appraisal. Employees might fear receiving an appraisal
that contains mostly neutral or negative feedback about their job performance -- not
overwhelmingly complimentary feedback or positive strokes. Being on the receiving end of
negative feedback is as nerve-wracking as being the supervisor who has to give negative
feedback, which makes for an uncomfortable appraisal meeting. Also, in a small business, postappraisal interaction between a supervisor and employee can be tense, particularly if the
employee believes she was rated unfairly. The tense interaction between supervisors and
employees is likely to be heightened because of the close proximity within which employees and
supervisors often work in a small business setting. For many employees, news about a salary
increase is about the only positive aspect of a performance appraisal. The dread with which
supervisors and employees view performance appraisals puts a negative spin on the entire
Supervisor Bias
Intentional or unintentional biases can destroy the integrity of the performance-appraisal system.
Biases occur when supervisors overlook poor employee performance during the early part of an
evaluation period and focus solely on the most recent performance. Supervisor bias can occur
when supervisors feel it's too much work to produce a quality performance appraisal, resulting in
a less than properly constructed appraisal, according to Tulane University business school
professor Jasmijn Bol. In addition, supervisors who were promoted from staff positions might
have a difficult time rating the job performance of employees who were once their peers. This is
a serious disadvantage of performance-appraisal systems that can have a lasting effect on an
employee's status with the company, even to the point of termination if the supervisor bias is
pervasive enough to render performance ratings that are abysmally low.
Performance appraisals don't always receive the priority they deserve. Employees must receive
timely feedback to learn whether they're performing their job functions according to
expectations. Absent informal or formal feedback provided by a performance-appraisal system,
employees might not realize how they can improve their processes or their behaviors and
attitudes about work. A supervisor's failure to conduct timely performance appraisals
demonstrates poor leadership skills and can put a strain on the supervisor-employee relationship.
This is particularly true when an employee's salary raise depends on finalizing the performance
appraisal. Late appraisals mean untimely wage increases.

III. Performance appraisal methods

1. Essay Method
In this method the rater writes down the employee
description in detail within a number of broad categories
like, overall impression of performance, promoteability
of employee, existing capabilities and qualifications of
performing jobs, strengths and weaknesses and training
needs of the employee. Advantage It is extremely
useful in filing information gaps about the employees
that often occur in a better-structured checklist.
Disadvantages It its highly dependent upon the writing
skills of rater and most of them are not good writers.
They may get confused success depends on the memory
power of raters.

2. Behaviorally Anchored Rating Scales

statements of effective and ineffective behaviors
determine the points. They are said to be
behaviorally anchored. The rater is supposed to
say, which behavior describes the employee
performance. Advantages helps overcome rating
errors. Disadvantages Suffers from distortions
inherent in most rating techniques.

3. Rating Scale
Rating scales consists of several numerical scales
representing job related performance criterions such as
dependability, initiative, output, attendance, attitude etc.
Each scales ranges from excellent to poor. The total
numerical scores are computed and final conclusions are
derived. Advantages Adaptability, easy to use, low cost,
every type of job can be evaluated, large number of
employees covered, no formal training required.
Disadvantages Raters biases

4. Checklist method
Under this method, checklist of statements of traits of
employee in the form of Yes or No based questions is
prepared. Here the rater only does the reporting or
checking and HR department does the actual evaluation.
Advantages economy, ease of administration, limited
training required, standardization. Disadvantages Raters
biases, use of improper weighs by HR, does not allow
rater to give relative ratings

5.Ranking Method
The ranking system requires the rater to rank his
subordinates on overall performance. This consists in
simply putting a man in a rank order. Under this method,
the ranking of an employee in a work group is done
against that of another employee. The relative position of
each employee is tested in terms of his numerical rank. It
may also be done by ranking a person on his job
performance against another member of the competitive
Advantages of Ranking Method
Employees are ranked according to their
performance levels.
It is easier to rank the best and the worst
Limitations of Ranking Method
The whole man is compared with another
whole man in this method. In practice, it is very difficult
to compare individuals possessing various individual

This method speaks only of the position where an
employee stands in his group. It does not test anything
about how much better or how much worse an employee
is when compared to another employee.
When a large number of employees are working,
ranking of individuals become a difficult issue.
There is no systematic procedure for ranking
individuals in the organization. The ranking system does
not eliminate the possibility of snap judgements.

6. Critical Incidents Method

The approach is focused on certain critical behaviors of
employee that makes all the difference in the
performance. Supervisors as and when they occur record
such incidents. Advantages Evaluations are based on
actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases,
chances of subordinate improvement are high.
Disadvantages Negative incidents can be prioritized,
forgetting incidents, overly close supervision; feedback
may be too much and may appear to be punishment.

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