Limitations of performance appraisal system

1

Limitations of Performance

Appraisal System

By

Manisha Vaghela

Limitations of Performance Appraisal System 2

FLOW OF PRESENTATION

1.)Introduction of Performance Appraisal System
2.)What is a Performance Appraisal?
3.)Definition of Performance Appraisal System
4.)Limitations of Performance Appraisal System
5.)Conclusion
6.)Review of the Topic
7.)Bibliography

Prepared By :-Manisha Vaghela

3

Introduction of Performance
Appraisal System
Performance Appraisal is the systematic
evaluation of the individual with respect to
his or her potential for development.



• Performance Appraisal is the formal
conclusion to a performance management
process at the end of a prescribed term.

• Prescribed terms may be any length but are
usually a 12 month period.



The Performance Appraisal process involves
an interview between a staff member and their
manager where the objectives and deliverables
for the staff member are reviewed, and an
overall assessment of the staff member's
performance is agreed.

It must be understood that a Performance
Appraisal is only a component part of a
Performance Management System. Many people
confuse the two and interchange the
terminology.



• Feedback is an important component of
performance appraisal. While positive feedback
is easily accepted, negative feedback often meets
with resistance unless it is objective, based on a
credible source and given in a skilful manner.



What is a Performance
Appraisal?
• A performance appraisal is an evaluation of job
performance over a period of time. It is basically
an annual report card on an employee and how
they performed over the prior year.

• Unfortunately not all performance appraisal
processes are the same and some are designed to
not only fail, but to create a negative experience
for both the employee and the manager.


• Performance Appraisal is the formal, systematic
assessment of how well employees perform their
jobs in relation to established standards .



DEFINITION OF PERFORMANCE
APPRAISAL SYSTEM

1.)The process by which a manager or consultant
examines and evaluates an employee's work
behavior by comparing it with preset standards,
documents the results of the comparison, and
uses the results to provide feedback to the
employee to show where improvements are
needed and why.


2.)Performance appraisals are employed to
determine who needs what training, and who
will be promoted, demoted, retained, or fired.

3.)Performance appraisal is a systematic way of
reviewing and assessing the performance of an
employee during a given period of time and
planning for his future.


11

LIMITATIONS OF PERFORMANCE
APPRAISAL SYSTEM



1. Halo effect :-

• In this case the superior appraises the person on
certain positive qualities only. The negative
traits are not considered. Such an appraisal will
no give a true picture about the employee. And
in some cases employees who do not deserve
promotions may get it.



2. Horn effect :-

• In this case only the negative qualities of the
employee are considered and based on this
appraisal is done. This again will not help the
organization because such appraisal may not
present a true picture about the employee.



3. Central tendency :-

• In this case the superior gives an appraisal by
giving central values. This prevents a really
talented employee from getting promotions he
deserves and some employees who do not
deserve any thing may get promotion.



4. Leniency and strictness :-

• Some bosses are lenient in grading their
employees while some are very strict. Employee
who really deserves promotions may loose the
opportunity due to strict bosses while those who
may not deserve may get benefits due to lenient
boss.



5. Spill over effect :-

• In this case the employee is judged +vely or –
vely by the boss depending upon the past
performance. Therefore although the employee
may have improved performance, he may still
not get the benefit.



6. Fear of loosing subordinates
and spoiling relations :-
• Many bosses do not wish to spoil their
relations with their subordinates. Therefore
when they appraise the employee they may end
up giving higher grades which are not required.
This is an injustice to really deserving
employees.



7. Goodwill and techniques to
be used :-
• Sometimes a very strict appraisal may affect the
goodwill between senior and junior. Similarly
when different departments in the same
company use different methods of appraisal it
becomes very difficult to compare employees.



8.Lack Of Clarity:-

The objective of performance appraisal is to
evaluate and develop employees. An
organization should avoid using one appraisal
system to achieve both objectives. The particular
system of the appraisal system should clarify



before it is designed and should be discussed
with all managers and employees to gain their
commitment. Any performance appraisal
system, however good the design, is unlikely to
succeed if the managers and employees are
suspicious of its objectives.



CONCLUSION

• Finally ,a performance appraisal is only as
good as the performance management, system it
is part of. If an organization merely does
performance appraisals for the sake of doing
them, they are wasting their time. But if they
strategically incorporate performance
management into their strategic plan to
implement business goals, they will provide a
process to accomplish those goals.

• It is a powerful tool to calibrate, refine
and reward the performance of the employee.


REVIEW OF THE TOPIC

1.)Introduction of performance appraisal system
2.)What is a performance appraisal?
3.)Definition of performance appraisal system
4.)Limitations of performance appraisal system
5.)Conclusion



Bibliography

1.) Human Resource Management
-C.B.Gupta
 Sultanchand & Sons

2.)Human Resource &Personnal Management
- K.Aswathappa
 Tata Mc Graw hill



3.) Management of Performance Appraisal.
By Monga, M. L. 1983.
 Bombay: Himalaya Publishing House.

4.) Performance Appraisal Theory and Practice.
By Rao, T. V. 1985.
 New Delhi: Vikas Publishing House.

5.)www.google.com
- www.appraisal-smart.com
-www.soft tech.com
-www.newmanglobal.biz

26

Prepared By :-Manisha
Vaghela

Limitations of performance appraisal system

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