Question

Limitations of performance appraisal and please provide organizational example

Answer 1

Following are the limitations of performance appraisal:

1. Bias of Appraiser: Often a boss favors some friendly subordinates while unfriendly ones are rated low.
2. Ambiguity in Standards: If the standards are not clear, the bosses may tweak the rating as per their understanding
3. Insufficient Evidence: Often subjective achievement where one doesn't receive any appraisal because you can't say that over a scale how much you have achieved. For example it is difficult to prove that you have motivated your employees in improving efficiency of the process by motivating them, because motivation can't be measured individually.
4. Several Qualities Remain Without Appraisal: In the to do list for KPI, many activities/ achievements aren't recorded, although you have performed them as a part of your role
5. Leniency or Strictness Tenancy: Every evaluator has his own valuation procedure which is regarded as his own standard for evaluation. For example, some supervisors are strict in evaluation of performance whereas others are lenient. In this case some gets promoted while others are left behind.
6. Average Rating Problem: In order to give very low or very high rating, the top managers are required to give reasons to justify the rating. The most common error committed in performance appraisal is to give average rating to all employees, so that they needn't answer the low performer nor justify the best performers.
7. Influence of Man’s Job: There is a tendency to give a high rating to highly paid jobs. So a senior employee may get a higher rating than a junior employee. Sometimes marketing and finance team gets highly rated because they can easily show how much revenue their effort has earned.
8. Similarity Error: The evaluator tries to look those qualities in subordinates which he himself possesses. Those who show the similar characteristics are rated high.