Professional Documents
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Errors in Performance Appraisal
Errors in Performance Appraisal
Errors in Performance Appraisal
Appraisal
Manpo
wer Planning and Performance Appraisal
Submitted To:
Dr. Rupinder Kaur
Submitted By:
Nimisha Gupta
MBA-HR (09-11)
University Business School
Table of Contents
Introduction.................................................................................................................................................3
Why does the Performance Appraisal System Fail?....................................................................................4
Errors in Performance Appraisal.................................................................................................................6
What Increases Biases?...............................................................................................................................9
Consequences of Inaccurate Ratings.........................................................................................................10
How to Reduce Errors in Performance Appraisals?...................................................................................11
References.................................................................................................................................................13
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Introduction
People differ in their abilities and their aptitudes. There is always some difference between the
quality and quantity of the same work on the same job being done by two different people.
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Performance appraisals of Employees are necessary to understand each employee’s abilities,
competencies and relative merit and worth for the organization
In recent years, performance linked reward management system is seen as a holistic approach to
a manager’s function. It is not only a random collection of activities which are cyclical and
sequential, but also important for accomplishment of work & source for high performance and
excellence.
Varda Pendse, Director, Cerebrus Consultants prefers a performance ‘management’ system and
says appraisals have become common tools to give increments rather than tools to build a culture
(of openness, transparency etc.) Also appraisals do not capture the extent of coaching and
support that the manager has given to the employee. Another flaw in most systems is that giving
feedback on employee performance becomes a one-time event. Giving feedback should be a
continuous process in companies and should not be relegated only to the year end. Appraisal
systems also fail as goals and performance metrics are often not clearly defined. If goals are not
aligned to all the departments and functions of an organization, this will result in lack of
ownership of crucial goals across departments. Companies in such situations would not have
information on its people for assigning more challenging tasks and new businesses.
Developing an appraisal system that accurately reflects employee performance is a difficult task.
Performance appraisal systems are not generic or easily passed from one company to another;
their design and administration must be tailor-made to match employee and organizational
characteristics and qualities.
There can be various constraints in the way of an effective performance appraisal system like:
Situational constraints ‐
o Tools/Equipment
o Physical environment
o Working conditions
o Complexity of job/Interdependence
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Lack of financial/human resources
Lack of raters/ ratees training
Rating Inflation/deflation
Unclear Purpose
Lack of proper Feedback
Improper Reward system
Lack of Appraisal instruments
No set Performance Standards
Lack of Rating accuracy
Lack of Accountability of raters
Lack of Management Commitment
Lack of trust, participation, and acceptance on the part of employees.
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Errors in Performance Appraisal
Majorly errors in Performance appraisal arises due to various biases while rating the employees’
performance. A few common errors are:
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areas of that person’s areas where his performance
performance was actually mediocre.
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successes to external causes attitudes and inherent laziness
Differential Effects Tendency to like the Jack brought about a new
different system in his department and
inspite of not having
contributing considerably
other than this, his different
contribution got him good
ratings.
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What Increases Biases?
There are various reasons due to which the biases get enhanced:
Rater’s perceptions of constraints
Rater’s experience of the job
Education, background
Importance of Appraisal
Acceptance
Practicability/Compatibility- Too complex/right timing
Stigma
Linkage with Rewards
Absence of Monitoring
Linkage with Training
Absence of Participation
Organizational Culture
Low Self Worth
High Expectations
All the above mentioned factors lead to increase in different type of biases as mentioned in the
errors in performance appraisals.
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Consequences of Inaccurate Ratings
Due to various biases and inaccurate rating a number of consequences which can lower the
morale of an employee and affect his performance adversely can happen. Also an organizational
loss in terms of time, cost, effectiveness and efficiency is at stake.
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How to Reduce Errors in Performance Appraisals?
As managers, we are still common people that tend to be subjective in our judgment. But we
understand, the impact if we cannot be objective in performance appraisal. Employee who be
treated unfair, tend to be difficult to be managed next year. So it’s very important for all
managers to know the technique to increase objectivity in performance appraisal. Here some tips
and guidelines:
Make job objective and target agreement at the beginning of the year
Make regular note to subordinate’s performance for the whole year.
Participation
Ownership –Joint (appraisee to own more)
Tasks Targets and KPAs
Encourage Qualitative Assessment
Do Not Go Blindly by Ratings
Introspection
Periodic Feedback
Training of Appraisers
Monitoring
Well Defined Criteria for Assessment – Behaviorally Anchored Rating Scales
Introduce Review Mechanisms
More Opportunities to Observe the appraisee
Closer the Rater is to the appraisee in Organization Hierarchy, higher the
correspondence between the Qualities in the Instrument, More the Linkage
Between Ratee performance and organizations outcomes
Use MBO
o Specific timeframes for each task
o Set benchmarks
Use multiple appraisals
o Peers
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o Subordinates
o Clients
o Supervisors
o Criterion for doing a job well identified ‐ More complex job/more criteria
o Critical activities to be assessed
Hence the errors in performance appraisals need to be minimized and a proper feedback and
accurate evaluation system should be developed by every organization for an effective
performance appraisal of their employees.
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References
agtraining.tamu.edu/handouts/appraisal-errors
www.performance-appraisal.com/bias.htm
www.capam.org/_documents/luckheenarain.nalini
en.wikipedia.org/wiki/Performance_appraisal
hubpages.com/.../how-to-reduce-Bias-in-Performance-Appraisal
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