NAME: AMINA AMIR

ROLL NO: 18013005-040

SUBJECT: HUMAN RESOURCE MANAGEMENT
SUBMITTED TO: USMAN RIAZ MIR
PERFORMANCE APPRAISAL:
Performance appraisal or performance review is defined as evaluation of an employee’s
performance in relation to established standards and his overall contribution to the
organization. Job analysis is the base of performance management. The performance is
measured on certain factors such as job knowledge, quality and quantity of output, leadership
abilities etc.

LIMITATIONS OF PERFOMANCE APPRAISAL:

Performance appraisal sometimes lead to unfair evaluations. Some of the major limitations of
performance appraisal are:
1. Prone to biasness
Biasness can be either in a positive or negative way.

 Halo effect
Halo effect is the biggest weakness of performance appraisal method. It occurs when a
manager develops an overly positive judgment of a particular employee on the base of a single
trait. Sometimes manager commit halo effect on the base of a recent incident and forget all the
past events in which the performance of employee was highly appreciated. Halo effect depicts a
picture of the rater impressions on the rating person. It impacts the objectivity of reviews and
managers fails to recognize the area of improvement by continuously providing high ratings.
For example: The manager was so satisfied by the speed of Ali’s work that they overlook his
rudeness to customers and failure to call back clients within in the time they requested.

 Horn effect
The flip side of halo effect is horn effect. In this effect managers rate employees low in one or
two areas of performance on the base of a specific trait due to which they tend to receive a
poorer rating overall.
For example: the manager rated the employee poorly in all areas of performance because once
he misbehaved with him at the workplace.
2. Varying standards
Different managers have different standards for the rating purpose due to which they have
their own view about different employees
3. Leniency and strictness:
Leniency is the tendency to rate outstanding rather than true assessment of performance.
Strictness is the tendency to rate low rather than true assessment of performance. The ratings
can be high or low depending upon the nature of the evaluator. This problem is especially
severe with graphic rating scale. The supervisors rate the person high or low without keeping in
view the present and past performance. Employees who deserve promotion lose due to strict
bosses while other who do not deserve are easily offered promotion due to linnet boss.
4. Similar to me error:
In similar to me error the rating of the evaluator is biased towards the employee who he thinks
has similar characteristics as him personally or professionally. This error result in biasness and
affects the rating of the employees and leads to imbalanced judgment.
For example: a manager possesses good sense of humor so the worker with this similar trait
will be rated high.
.
5. Central tendency:
Central tendency is the rater’s tendency to avoid making extreme judgments and to place most
items in the middle of the rating scale. In this form of biasness, the appraiser is afraid to mark
low or high rating because of the negative response of the employees in return. Average rating
problems leads to distortion of evaluation purpose and subsequently not getting a clear picture
of an employee’s strengths and weakness.
For example: on 10 points scale the manager place most of his employees on the middle (4-7).

HOW TO MANAGE AND IMPROVE APPRAISAL SYSTEM:

Performance management can be time consuming and overwhelming for managers but is very
important for every organization as its is helps to boost employee engagement and
productivity. as described above the drawbacks can be improved.

 Proper training should be provided to employees to cover gap where they lack
 All the actions should be performed transparently and everyone should be treated
the same whether management like them or not
 The manager must take notes on all aspect of performances throughout the year
which gives a well-rounded view of employee’s performance.
 360-degree feedback should be used for balanced and proper evaluation.
 The feedback questions should be valid and reliable.
 Continuous feedback and interviews should be conducted for updated news.
 In order to avoid unclear standards, key performance indicators should be improved.
 First understand the performance appraisal problem and according to it right
appraisal tool should be used.
Conclusion
Performance appraisal is the regular view of an employee’s job performance and overall
contribution to a company. Continuous feedbacks and trainings are helpful for an achieving
desired result. Key performance standards must be powerful and clear to avoid ambiguity.