Errors In Rating

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Agenda
In this video, we discuss the following topics:

• Errors that impact the performance appraisal process

• Steps that can be taken to make the performance appraisal process more effective

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Errors in Rating

Introduction
• Like many other human resource practices and procedures, performance appraisal is also imperfect.

• Problems occur, not so much from the method used but how it is used to evaluate performance of the
employees.

• Often, problems occur because supervisors and managers are largely untrained to appraise employee
performance.

• Even when appraisers are trained, they frequently find it difficult to accurately and effectively assess the
accomplishments of their subordinates.

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Errors in Rating (Cont.,.)

• Purfunctoriness: Most managers and supervisors, performance appraisal is difficult, unpleasant and time
consuming activity and some of them see it as an unnecessary administrative function required by the HR. So it is
not unusual to find the appraisal handled superficially. Incomplete forms are submitted, and the discussion is
cursory and performance appraisal is sometimes handled in a fashion that suggests it is not important.

• Lack of objectivity: Rating scales, for example, commonly use personality traits or characteristics such as attitude,
loyalty, appearance, resourcefulness, and personal conduct, which are not only difficult to measure, but are also
open to completely subjective interpretation.

• Central Tendency: One of the most common errors in appraising performance is central tendency: rating all
employees as average or at the middle value of a numerical scale. Appraisers committing central tendency errors
are seeking to avoid controversy, criticism, or lengthy discussions.

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Errors in Rating (Cont.,.)

• Halo & Horn Effects: A halo effect refers to the tendency to rate an employee high on all aspects of performance,
even though actual performance may not been uniformly high. This happens because the evaluator places an
extraordinary importance on just one factor, The horns effect is the direct opposite of the halo effect. Poor
performance on one highly valued aspect of performance leads to lower than deserved ratings on all other
performance factors.

• Leniency and Strictness: Leniency, sometimes referred to as evaluation inflation, is the giving of undeserved high
ratings. Part of the process is that evaluators are required to discuss evaluations with employees face-to-face,
there is a tendency to overrate actual performance. In many instances, the evaluator simply gives the employee
the benefit of the doubt about performance. Leniency eliminates the necessity to discuss any unpleasant aspects
of performance with the employee. Strictness refers to the problem of being unduly critical of an employee’s
work performance.

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Errors in Rating (Cont.,.)

• Personal Biases: An appraiser’s feelings about the appraisee can significantly affect the ratings given during the
performance appraisal. Appearance, mode of dress, hair styles, mannerisms, and a host of other factors may
cause an evaluator to like or dislike particular employees and produce positively or negatively skewed appraisals,
respectively. Individuals of particular religious affiliations, ethnic groups, sex, age, or disability status, although
protected by law, do not always receive fair evaluations because of personal biases of the supervisor conducting
the appraisal. Personal biases are often subconscious prejudices that are difficult to eliminate or control

• Guessing: In the absence of quantitative, objective performance measures, evaluators may resort to guessing
about what an employee has or has not done during the appraisal period. Lacking sufficient documentation
relative to accomplishments, appraisers may simply make assumptions about an individual’s performance.
Usually, these guesses are incorrect.

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Errors in Rating (Cont.,.)

• Recent Behaviour Bias: This type of bias occurs when the appraiser takes into account only the latest
performance of the employee and fails to consider the performance over the entire evaluation period.

• Since the normal appraisal period is one year, it is difficult, in the absence of detailed documentation, to
remember what has happened in the earlier part of the period; thus, the appraiser tends to focus on the most
recent and easiest to remember aspects of performance.

• Employees also contribute to this problem. Most employees are very aware of when they are scheduled for a
performance review, and while their actions may not be intentional, their behavior and productivity tend to
improve right before the scheduled evaluation.

• Consequently, the supervisor’s memory of recent behavior is even more positively reinforced.

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Errors in Rating (Cont.,.)

• Use Bias: The way in which performance appraisal is used in an organization may also introduce bias into the
process.

• If the primary purpose of the evaluation is for awarding merit pay increases, appraisers may display a tendency to
rate poor performers as average so as not to deny them raises. In times of high inflation, supervisors also tend to
overrate performance so employees receive raises that are more commensurate with inflation rates.

• Conversely, where the emphasis of performance appraisal is on helping the employee to develop and improve his
or her job skills, evaluators may tend to be more stringent in their performance assessments because they are
concerned with assisting employees to develop their talents more fully.

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Errors in Rating (Cont.,.)

• Lack of Documentation: There can be times, when the feedback is given to the employees it may not be
documented and when it does exist it can be inadequate or incomplete. This incomplete information and
documentation can lead to many appraisal errors.

• Lack of evaluator training: In many organizations there is little or no training in how to evaluate performance
and conduct performance appraisals. Most of the performance appraisal problems could be eliminated, or at
least reduced, through proper rater training.

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Common Rating Errors

Contrast Effect This error occurs when people are compared rather than against the standards of the
job.
First Impression Error This error occurs when the appraiser makes and initial positive or a negative judgement
about the appraisee and allows this first impression to color and distort future
information
Halo or Horn Effect These take the form of inappropriate generalizations from one aspect of a person’s
behavior to all areas of his/her performance.

Similar-to- me Effect This error occurs when appraisers rate appraisees who resemble them higher than others

Central Tendency This error occurs when the appraisers give ratings that are in the middle of the scale even
when the performance clearly warrants a higher or lower ratings

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Common Rating Errors (Cont.,.)

Negative & Positive Skew This error occurs when the ratings are higher or lower than what the performance
actually warrants and is actually the opposite of central tendency.

Attribution Bias This error is seen when poor performance is attributed to individual factors and good
performance to external reasons.

Recency Effect The is error occurs when recent minor events have a higher influence on the ratings
that major events which may have occurred months ago.

Stereotyping This error is seen when appraisers generalize across groups and negate individual
differences.

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Characteristics of an effective appraisal system

• It is highly unlikely that any performance appraisal system will be completely free from criticism or immune to
legal challenge.

• There are 12 characteristics that an effective performance appraisal system should possess.

• Consideration of these characteristics will make the process more robust and transparent.

• An effective performance appraisal system is the result of hard work and careful planning.

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Characteristics of an effective appraisal system (Cont.,.)

Formalization Trained appraisers

Job related characteristics Ease of use
Performance factors based on standards and Employee access to results
measurements
Validity Confidentiality
Reliability Review mechanism
Open communication Appeal process

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Summary

Here is a quick recap of what we have learned in this video:

• Subjectivity and bias are inherent part of the performance appraisal process.

• We have discussed with examples the various rating errors affecting the objectivity of performance appraisal and
what steps can be taken to make the performance appraisal process more effective and transparent.

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