Challenges Of Performance Appraisal

An organization comes across various problems and challenges Of Performance Appraisal in

order to make a performance appraisal system effective and successful. The main Performance
Appraisal challenges involved in the performance appraisal process are:

 Determining the evaluation criteria

Identification of the appraisal criteria is one of the biggest problems faced by the top
management. The performance data to be considered for evaluation should be carefully selected.
For the purpose of evaluation, the criteria selected should be in quantifiable or measurable
terms

 Create a rating instrument

The purpose of the Performance appraisal process is to judge the performance of the employees
rather than the employee. The focus
of the system should be on the development of the employees of the organization.

 Lack of competence
Top management should choose the raters or the evaluators carefully. They should have the
required expertise and the knowledge to decide the criteria accurately. They should have the
experience and the necessary training to carry out the appraisal process objectively.

 Errors in rating and evaluation

Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait influencing the
evaluator’s rating for all other traits) etc. may creep in the appraisal process. Therefore the rater
should exercise objectivity and fairness in evaluating and rating the performance of the
employees.

 Resistance
The appraisal process may face resistance from the employees and the trade unions for the fear
of negative ratings. Therefore, the employees should be communicated and clearly explained the
purpose as well the process of appraisal. The standards should be clearly communicated and
every employee should be made aware that what exactly is expected from him/her.
Performance Appraisal Training
Every organisation conducts performance for assessing the performance of the employees and the
organisation. But if not conducted properly, they can give a false impression about the performance of
the employees and affect the overall performance of the organisation; therefore, there is a need to
train the appraisers to ensure the maximum effectiveness of the process.

Studies have revealed that appraisals are often conducted by the managers and the supervisor who
sometimes, are themselves not aware of the procedures to be followed. They should be explained the
importance and the implications of the Performance appraisal to the organisations, the methods to be
followed, the principles and the processes of the appraisal.

All managers and supervisors who consult performance appraisals should be given training for the
following:

 Methods, techniques and guidelines for setting goals and objectives

 How to evaluate the performance and rate the employees

 Standards for performance documentation

 How to complete a performance appraisal form

 How to maintain objectivity in the appraisal

 Questioning techniques for appraisals

 Responding to employee reactions

  Improves rapport and communication

 Building morale and motivating employees

 Observing and measuring performance

 Tracking results

 Structuring the interview with the focus on improving performance

 Feedback techniques (providing constructive feedback)

 How to deal with non-performers and people who refuse to co-operate

 Post review actions

The training can be given by conducting special workshops by professional HR consultants or

qualified and experienced HR professionals of human resource management. The venue for the
purpose can be a suitable seminar hall, training room, conference hall, boardroom, or at some place
away from the workplace like some hotel etc.

Judgment Errors

People commit mistakes while evaluating people and their performance. Biases
and judgment errors of various kinds may spoil the show. Bias here refers to
inaccurate distortion of a measurement. These are:
(i) First impressions (primacy effect): The appraiser’s first impressions
of a candidate may color his evaluation of all subsequent behavior. In
the case of negative primacy effect, the employee may seem to do
nothing right; in the case of a positive primacy effect, the employee can
do no wrong (Harris, p.192).

(ii) Halo: The Halo error occurs when one aspect of the subordinate’s
performance affects the rater’s evaluation of other performance
dimensions. If a worker has few absences, his supervisor might give the
worker a high rating in all other areas of work. Similarly an employee
might be rated high on performance simply because he had a good dress
sense and comes to office punctually!.

(iii) Horn effect: The rater’s bias is in the other direction, where one
negative quality of the employee is being rated harshly. For example,
the ratee does not smile normally, so he cannot get along with people!

(iv) Leniency: Depending on rater’s own mental make-up at the time of

appraisal, raters may be rated very strictly or very leniently. Appraisers
generally find evaluating others difficult, especially where negative
ratings have to be given. A professor might hesitate to fail a candidate
when all other students have cleared the examination. The Leniency
error can render an appraisal system ineffective. If everyone is to be
rated high, the system has not done anything to differentiate among
employees.

(v) Central tendency: An alternative to the leniency effect is the central

tendency, which occurs when appraisers rate all employees as average
performers. For example, a professor, with a view to play it safe, might
give a class grades nearly equal to B, regardless of the differences in
individual performance.

(vi) Stereotyping: Stereotyping is a mental picture that an individual

holds about a person because of that person’s sex, age, religion, caste,
 etc. By generalizing behavior on the basis of such blurred images, the
rater grossly overestimates or underestimates a persons’ performance.
For example, employees from rural areas might be rated poorly by
raters having a sophisticated urban background if they view rural
background negatively.

(vii) Recency effect: In this case the rater gives greater weightage to
recent occurrences than earlier performance. For example, an excellent
performance that may be six or seven 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.

Poor appraisal forms

The appraisal process might also be influenced by the following factors relating to the forms that are
used by raters:

 The rating scale may be quite vague and unclear

 The rating form may ignore important aspects of job performance.
 The rating form may contain additional, irrelevant performance dimensions.
 The forms may be too long and complex.

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 ratee 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 raters 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.

Ineffective organizational policies and practices

If the sincere appraisal effort put in by a rater is not suitably rewarded, the motivation to do the job
thoroughly finishes off. Sometimes, low ratings given by raters are viewed negatively by management –
as a sign of failure on the part of rater or as an indication of employee discontent. So, most employees
receive satisfactory ratings, despite poor performance. Normally, the rater’s immediate supervisor must
approve the ratings. However, in actual practice, this does not happen. As a result the rater ‘goes off the
hook’ and causes considerable damage to the rating process.

88888888888888888888888888888888888888888888888888888888888888888888888888888888888
88888888888888888888888888888888888888888888888888888888888888888888888888888888888

Ten Most Common Appraisal Errors of Performance Appraisals*

 Gut feeling (subjectiveness)

 Lack of follow-up
 Improper preparation; poor documentation
 Biases

o Similar to me
o Positive leniency - want to give everyone high scores
o Negative leniency - want to give everyone low scores
o Halo effect - the employee is a "saint" so must have high scores
o Attribution - tending to see poor performance more within control of the
individual and superior performance as more of an influence of external factors
o Stereotyping
o Contrast effect - contrasting one employee's accomplishments against another
o Unfair comparison - comparing one employee against another
o First impression
o Central tendency (forced bell curve) - expecting in any group that there will be
some poor employees and some great employees
 Recency effect: over - emphasis on recent performance
 Inadequately defined and/or misunderstood standards/goals
 Lacking truth
 Poor interviewer (poor environment, poor use of time, domineering, poor listener, etc.
 Conducting an "annual" review (as opposed to the ongoing review)
 Negative approach - catching them doing doing something wrong (as opposed to the One
Minute Manager Approach of catching them doing something right)

*From Ohio University Performance Management System Guidelines

Traits of the Best Performance Management Systems

 Performance management is a daily supervisory responsibility and integral to

management. If proper goal setting, coaching and feedback are done periodically, then
the results of the performance evaluation will not be a surprise.
 Supervisors understand and communicate how the goals of the organization directly
impact the employee's job and performance.
 Supervisors see performance appraisal, training and development and career pathing as
interrelated and essential for the organization's success.
 High performance is rewarded appropriately. Mediocre performance is not rewarded.
 Good managers are honest, fair and caring with all employees. They remember to listen
and promote 2-way communications.
 Good managers know that turnover costs are high. They know that to retain employees,
development and training are essential.
 Supervisors understand that following the policies and guidelines for performance
management is critical for successful defense in a legal setting.
 Supervisors use the same process for all employees.
 Job content is used in developing goals and evaluating performance.
 Evaluations are behavior oriented and not personality trait oriented.
 Employees are given the right to respond to the evaluation in writing and both the
supervisor and employee sign the final copy.
 Confidentiality is respected.