PROBLEMS IN PERFORMANCE APPRAISAL

Performance appraisal has come under a heavy barrage of

criticism. Problem areas in appraisals.

1. Subjectivity
A potential weakness of traditional performance appraisal
methods is that they lack objectivity. In the rating scales
method, for example, commonly used factors such as attitude,
appearance, and personality are difficult to measure. In
addition, these factors may have little to do with an
employee’s job performance. While subjectivity will always
exist in appraisal methods, employee appraisal based
primarily on personal characteristics may place the evaluator
and the company in an untenable position.

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 PROBLEMS IN PERFORMANCE APPRAISAL

2. Bias
A bias can be either positive or negative. Halo error occurs when a
manager generalizes one positive performance feature or incident to
all aspects of employee performance resulting in a higher rating.
The opposite phenomenon is known as “horns effect”. Either way,
the bias distorts the appraisal and destroys its value. Rater bias can
make the appraisal more like gambling than an objective
observation process.

3. Rejection
The central issue in appraisal is whether the appraisers and
appraisees really take the process on board, and whether they work
together towards the aims of the scheme and develop the necessary
skills to get the most out of it. Many appraisal schemes simply do
not work, and many managers and employees do not take them
seriously.

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 PROBLEMS IN PERFORMANCE APPRAISAL
4. Time and Resource Constraints
Performance appraisal schemes demand substantial amount
of time from managers. Formal performance appraisals
obviously require frequent managerial observation of
employee’s performance. However, with time, resources and
workload constraints, managers find it difficult to observe the
performance of their employees closely.

5. Wide Variation in Standards and Ratings

Due to lack of communication, employees may not know how
they are rated. The standards by which employees think they
are being judged are sometimes different from those
managers actually use. No performance appraisal system can
be very effective for management decisions, individual
development, or any other purpose until the people being
appraised know what is expected of them and by what criteria
they are being evaluated

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 PROBLEMS IN PERFORMANCE APPRAISAL

Rating Problems

Performance appraisals are subject to a wide variety of

inaccuracies and biases referred to as ‘rating errors’. These
errors occur in the rater’s observations, judgment, and
information processing, and can seriously affect assessment
results. The most common rating errors are:

1. Leniency or severity 2. Central tendency

3. Halo effect 4. Horns effect
5. Rater bias 6. Primacy and recency effects
7. Stereotyping 8. Performance dimension order
9. Spill-over effect 10. Status effect
11. Same as Me 12. Contrast effect
13. Perceptual set 14. Sympathy effect

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Reducing performance errors

To reduce performance errors, organizations adopt various alternative

forms of performance assessment like :

➢ Direct Observation
➢ Open Ended Questions
➢ Set up a Working Group
➢ Consolidation of views from multiple raters
➢ Define the Objectives
➢ Design Methods and Procedure with detailing
➢ Draft Documentation
➢ Communication
➢ Pilot Project
➢ Training
➢ Full Implementation
➢ Individual Follow-up
➢ Validation
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Diagnosing Poor Performance at the right time

Poor performance may be either for lack of

ability or for poor motivation level.
Incorrect diagnoses of poor performance can
lead to problems, as based on such incorrect
identification of causes of poor performance,
organizations initiate corrective actions.

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