The four objectives of performance appraisal are:
The organisation must be able to discern between those whose performance is effectively contributing to the achievement of the organisation’s objectives, and those who are not.
Those who are performing well want to be recognised and rewarded for their efforts. Outstanding performers should be identified and rewarded accordingly otherwise further outstanding performance may wane due to declining motivation.
It is the role of performance appraisal to assist the employee to develop to achieve optimum performance and to remove blocks to improved performance.
Communicating clear, specific expectations and giving both positive and constructive feedback are essential parts of performance appraisal.
BENEFITS OF PERFORMANCE APPRAISALS
A performance appraisal process provides numerous benefits for the appraiser, appraisee and the organisation as a whole.
For the Appraisee:
For the Appraiser:
For the Organisation:
POTENTIAL DRAWBACKS OF PERFORMANCE APPRAISALS
A performance appraisal process can have a number of potential drawbacks for the appraiser, appraisee and the organisation as a whole. Despite having a sophisticated performance management system in place, the success or failure of a performance appraisal process will largely hinge upon the validity and reliability of the judgements made by the appraiser. Oftentimes, this can be influenced by managers’ personal bias and attitude towards the appraisal process generally. Both of these factors can disrupt the accuracy of performance appraisal information. Some common issues are:
If managers are not committed to the performance appraisal process, this can have a significant impact on the outcomes. Common attitude problems include; not taking the process seriously, seeing the process as a routine activity or merely “ticking the boxes”, reluctance to tell employees face-to-face about underperformance and failure to see how the process will benefit on-the-ground work activities and organisational performance.
Where the overall appraisal of an employee is influenced by the perceived presence of one desirable quality, work behavior or achievement and can skew the rater’s ability to rate the employee objectively.
The reverse of the ‘halo effect’, whereby the overall appraisal of an employee is influenced by the perceived presence of one negative quality, work behavior or achievement and can skew the rater’s ability to rate the employee objectively.
Where a rater grades every employees performance in a similar way, such as ‘acceptable’ or ‘meeting objectives’ and fails to distinguish between high performers and low performers. The tendency to rate all employees similarly can arise due to the lack of opportunity to observe employee behavior and/or a rater’s unwillingness to explain high or low ratings and create more work for themselves.
Where a rater’s ability to accurately appraise an employees’ performance is affected by the nature of the relationship they share and the length of time they have worked together. Whether the personal relationship between rater and employee is positive or negative, both have the potential to affect the objective judgment of the rater and can be an unreliable evaluation.
Leniency or strictness bias
Where a manager distorts appraisal accuracy by repeatedly rating employees as high or low despite actual performance. Rationales for higher ratings include; wanting to protect an employee from receiving a negative rating or permanent blemish on record, wanting to avoid an uncomfortable conversation and feeling sorry for those whose performance was unsatisfactory due to personal issues. Rationales for lower ratings include; wanting to encourage the employee to resign, to create evidence of underperformance to assist in disciplinary and termination procedures and/or to assert dominance and control over an unruly employee.
Where a manager holds a personal prejudice (positive or negative) towards a particular type of person (be it nationality, gender, age, personality trait, occupation type or anything else) and allows this bias to cloud their judgment and ability to objectively appraise their performance. This can often be unconscious and difficult to identify unless a complaint is made against a manager.
For more information, please refer to our Information sheet – Legal considerations.
Where a manager is only able to recount instances of good or bad performance based on what is most fresh in their minds. This distorts the accuracy of an appraisal as often employees make a concerted effort to improve their performance in anticipation of the performance review process being undertaken.