Obstacles in Performance Appraisal:

Every organization undertakes performance appraisal, either formally or informally. There

are certain barriers, which work against effective appraisal systems. Some of them are more

pronounced and need to be identified so that suitable measures can be taken to reduce their
impact to a minimum level.

These barriers have been grouped into three categories:

1. Faulty assumptions.

2. Psychological blocks.

3. Technical pitfalls.

1. Faulty Assumptions:
The germinating faulty assumptions between the superior and the subordinate create
problems during the appraisal.

i) The managers naturally wish to make fair and accurate appraisal of their subordinates. Both

superior and the subordinate show tendencies to avoid formal appraisal processes, as well as

to heed them in their respective work roles. Their assistance lies partly in their psychological

characteristics, partly in their organizational roles and partly in technical deficiencies and the
unwise management of appraisal policies and procedures.

ii) The managers consider that the method they have selected for appraisal is the best one and

shall work for years. They expect too much from it and rely too much on it. It should be

recognized that no system can provide perfect, absolutely defensible appraisals devoid of
subjectivity.

iii) Sometimes managers believe that personal opinion is better than formal appraisal and

they find little use of systematic appraisal and review procedures. However, this

‘management by instinct’ is not valid and leads to bias, subjectivity and distorted decisions
based on partial or inaccurate evidence.
iv) Some managers feel that it is not valid to tell subordinates frankly about their performance

and how can it be improved. As such they tend to defeat the basic purpose of appraisal by
providing camouflaged information as far as possible.

2. Psychological Blocks:
The value of any tool lies on the skills of the user. Therefore the utility of performance

appraisal depends upon the psychological characteristics of the managers. However research

tells us more about the inhibiting characteristics rather than facilitating characteristics of

people. There are several psychological blocks, which hinder the effectiveness of the
performance appraisal.

These are like:

i) Feeling of insecurity.

ii) Considering appraisal as an extra burden.

iii) Being excessively modest or skeptical.

iv) Feeling to treat subordinates failures as their deficiency.

v) Disliking of resentment by subordinates.

Because of these psychological barriers, managers do not tend to become impartial or

objective in evaluating their subordinates thereby defeating the basic purpose of appraisal.

3. Technical Pitfalls:
The main technical, difficulties in appraisal fall into two main categories the criterion
problem and distortions

Criterion problem:
A criterion is the standard of performance the manager desires of his subordinates and against

which he compares their actual performance. Criteria are hard to define in measurable term or
objective term. Ambiguity, vagueness and generality of criteria are difficult hurdles for any
process to overcome.

Distortions:
Distortions occur in form of biasness and errors in making the evaluation.

An appraisal system has the following distortions:-

i) Halo effect:
This distortion occurs when the rater is influenced by rate’s one or two outstanding good or

bad performances and he evaluates complete performance accordingly. The ‘Halo’ effect

refers to the tendency to rate an individual consistently high or low or average on the various
traits, depending upon whether the rater’s overall impression of the individual is favorable or

not. This means that the halo effect allows one characteristics, observation or occurrence
(good or bad) to influence the rating of all performance factors.

The halo effect arises when the traits are unfamiliar, ill defined and involves personal

relations. This often occurs when the employee is more conscientious and dependable, that

the appraiser might become biased toward that individual to the extent that the appraisers

rates him high on many desired attributes or when the employee is more friendly to the
appraiser.

Another type of halo effect occurs where the work team or informal group with which a

subordinate is associated influences the rater’s judgement. If the group is not well liked, this
attitude may work in the rating of the individuals, apart from the actual performance.

For e.g.:
The students may rate a faculty as ‘outstanding’ on all criteria preferably on the basis of few

appreciable things while they may appraise a lecturer as ‘lousy’ on the basis of being slow or
extremely demanding.

The halo effect problem can be minimized by:

a) Providing training for 5-10 minutes to the evaluators.

b) Restructuring the questions by requiring the evaluator to consider each questioning

dependently.

c) Ask the evaluator to appraise all rates on each dimension before switching to the next
dimension.

(ii) Central Tendency:

This error occurs when the rater marks all the rate’s as average. He fails to discriminate

between superior and inferior persons. The reason behind this may be lack of knowledge
about the behaviour of individuals, carelessness, lack of time or to avoid chaos.

(iii) First Impression (Primacy effect):

The appraisers first impression of a candidate may affect his evaluation of all subsequent

behaviour. In a positive primacy effect, the employee can do nothing wrong and in negative
primacy effect, employee can do nothing right.

(iv) Horn effect:

The rater’s bias is in the other direction, where one negative quality of the employee is being
rated harshly. For E.g, the rate rarely smiles; therefore he cannot work in teams.

(v) Constant errors:

Every evaluator has his own value system, which acts as a standard against which he makes

his appraisals. There are easy raters and tough raters. Relative to the actual performance some

raters have the tendency to give ‘high values’ to their employees while some assign ‘low

values’ The former is called as Positive leniency error and later is known as ‘Negative
leniency error’. In such a situation, the results of two raters are hardly comparable.

Holding meetings or training sessions for raters so that they may understand what is desired
from them can avoid the tendency.
(vi) Raters liking and disliking:
Managers being human beings have strong liking or disliking for people, particularly close
associates.

The rating is influence by personal factors and emotions and raters may weigh personality

traits more heavily than they realize. Raters give higher rating to whom they like and vice
versa.

(vii) Miscellaneous biases:

Biasness against employees on ground of sex, race, religion or position is also a common

error. The rater may be influenced by organizational influence and give higher ratings to
those holding higher positions.

(viii) Social differentiation:

Rating is sometimes impeded by the evaluator’s style of rating behaviour. Rater’s can be high

differentiators-i.e., using all or most of the scale or low differentiators-i.e., using a limited

range of the scale. Low differentiators tend to ignore or suppress difference, perceiving the

universe as more uniform than it really is. High differentiators tend to utilize all available

information to the utmost extent and thus, are better able to perceptually deny anomalies and
contradictions than low differentiators.

(ix) Stereotyping:
Stereotyping is a mental picture, which an individual holds about a person because of that

person’s sex, age, religion, caste, etc. On such basis the rater grossly overestimates or

underestimates a person’s performance. For E.g. A person who has sophisticated urban

background and considers rural background as negative may rate employees from rural India
low.

(x) Recency effect:

Tine rater gives greater weightage to recent occurrences than earlier performance. For e.g., an
excellent performance that may be 6 or 7 months old is conveniently forgotten while giving a
poor rating to an employee ‘s performance which is not so good in recent weeks.

Alternatively, the appraisal process may suffer due to a ‘spill over effect”, which takes place
when past performance influences present ratings.

(xi) Poor Appraisal forms:

The appraisal process might also be influenced by the following factors relating to the

forms that are used by raters:

a. The rating scale may be quite vague and unclear.

b. The rating form may ignore important aspects of job performance.

c. The rating form may contain additional, irrelevant performance dimensions.

d. The forms may be too long and complex.

(xii) Lack of rater preparedness:

The raters may not be adequately trained to carry out performance management activities.

This becomes a serious limitation when the technical competence of a rate is going to be

evaluated by a rater who has limited functional specialization in that area. The raters may not

have sufficient time to carry out appraisals systematically and conduct thorough feedback
sessions.

Sometimes the rate may not be competent to do the evaluations owing to a poor self-image

and lack of self- confidence. They may also get confused when the objectives of appraisal are
somewhat vague and unclear.