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The problems inherent in performance appraisal may be listed thus:

 

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.