1.
Limitation of performance appraisal
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I. Contents of getting limitation of performance appraisal
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An employee performance appraisal can be an effective tool for determining the development of
your staff. But in order to get results you can apply to staff management from your performance
appraisals, you need to understand the limitations of a performance review system. A
comprehensive evaluation system is needed to address the limitations inherent in the process.
Relevance
Performance appraisals tend to be uniform throughout an entire company. The production
manager uses the same forms and the same process to complete her employee reviews as the
logistics manager. According to the Performance Appraisal website, this creates a limitation in
the appraisal system. The standard questions may not apply to each department, or even each
individual job. When you try to apply a standard set of values over a system that is based on
variables, you get results that may not all be relevant.
Consistency
Each manager in your company has a different approach to managing and has a different
demeanor when it comes to employees. When you apply a standard appraisal system, or even an
appraisal system that is customized to each department, you are still going to get inconsistent
results due to managerial styles, according to the Soft Technology website. For example, if an
employee gets an appraisal from a manager in year one, but gets a new manager in year two, then
the resulting appraisals will not necessarily be comparable. There is no consistency between the
managers giving the appraisals. Trying to compare each employee using a numbering system is
also limited because of the different styles of management in each department.

2.
Motivation
A performance appraisal system based on numbers is designed to identify areas in the
employee's performance that require attention. The manager and the employee then work on a
developmental program that will address those issues and attempt to improve performance. But
the employee may be more motivated to raise her scores rather than learn substantial ways to
improve performance, according to the Performance Appraisals website. The only motivation the
performance appraisal offers is the incentive to raise appraisal scores from one year to the next.
The system lacks the ability to reward proactive attempts to become a better all-around
employee.
Scope
When a candidate is interviewed prior to being hired, he is sometimes given a test that measures
how he would react in certain situations and whether he is proactive. Once he becomes an
employee, he is subjected to annual performance reviews rather than continued testing to
determine if he is a self-starter, has ability to take on responsibility or the response time to
different job-related situations. A performance appraisal is very limited in scope. It creates
impressions based on past performance rather than real ability. If someone shows the ability to
do his job well, then the appraisal will reward him. But if he also possesses the ability to reduce
production costs by creating innovative ways to do his job, then the appraisal has no way of
determining that.
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III. Performance appraisal methods
1.Ranking Method
The ranking system requires the rater to rank his
subordinates on overall performance. This consists in
simply putting a man in a rank order. Under this method,
the ranking of an employee in a work group is done
against that of another employee. The relative position of
each employee is tested in terms of his numerical rank. It
may also be done by ranking a person on his job
performance against another member of the competitive
group.
Advantages of Ranking Method
i. Employees are ranked according to their performance
levels.
ii. It is easier to rank the best and the worst employee.

3.
Limitations of Ranking Method
i. The “whole man” is compared with another “whole man”
in this method. In practice, it is very difficult to compare
individuals possessing various individual traits.
ii. This method speaks only of the position where an
employee stands in his group. It does not test anything
about how much better or how much worse an employee
is when compared to another employee.
iii. When a large number of employees are working, ranking
of individuals become a difficult issue.
iv. There is no systematic procedure for ranking individuals
in the organization. The ranking system does not eliminate
the possibility of snap judgements.
2. Rating Scale
Rating scales consists of several numerical scales
representing job related performance criterions such as
dependability, initiative, output, attendance, attitude etc.
Each scales ranges from excellent to poor. The total
numerical scores are computed and final conclusions are
derived. Advantages – Adaptability, easy to use, low cost,
every type of job can be evaluated, large number of
employees covered, no formal training required.
Disadvantages – Rater’s biases
3. Checklist method

4.
Under this method, checklist of statements of traits of
employee in the form of Yes or No based questions is
prepared. Here the rater only does the reporting or
checking and HR department does the actual evaluation.
Advantages – economy, ease of administration, limited
training required, standardization. Disadvantages – Raters
biases, use of improper weighs by HR, does not allow
rater to give relative ratings
4. Critical Incidents Method
The approach is focused on certain critical behaviors of
employee that makes all the difference in the
performance. Supervisors as and when they occur record
such incidents. Advantages – Evaluations are based on
actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases,
chances of subordinate improvement are high.
Disadvantages – Negative incidents can be prioritized,
forgetting incidents, overly close supervision; feedback
may be too much and may appear to be punishment.
5. Essay Method

5.
In this method the rater writes down the employee
description in detail within a number of broad categories
like, overall impression of performance, promoteability
of employee, existing capabilities and qualifications of
performing jobs, strengths and weaknesses and training
needs of the employee. Advantage – It is extremely
useful in filing information gaps about the employees
that often occur in a better-structured checklist.
Disadvantages – It its highly dependent upon the writing
skills of rater and most of them are not good writers.
They may get confused success depends on the memory
power of raters.
6. Behaviorally Anchored Rating Scales
statements of effective and ineffective behaviors
determine the points. They are said to be
behaviorally anchored. The rater is supposed to
say, which behavior describes the employee
performance. Advantages – helps overcome rating
errors. Disadvantages – Suffers from distortions
inherent in most rating techniques.
III. Other topics related to Limitation of performance appraisal (pdf
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