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Pitfalls in performance appraisals

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Performance appraisal is a process applied by organisations in order to evaluate and review performance at team or individual level. This type of review is generally scheduled to be performed once a year within the organisation and it is usually carried out by the employee’s direct managers. Its purpose is to identify employee training and development needs, and ultimately improve individual performance.

The performance evaluation process is closely linked to the organisation’s strategic objectives and mission, and it aims at triggering in employees those behaviours that would lead to the achievement of the organisation’s goals.

In assessing performance, managers should closely follow the evaluation standards in place, as well as the existing formal assessment form that has to be filled in. However, in conducting a performance appraisal, evaluators are faced with several common problems. The main pitfalls in performance appraisal identified in the consulted sources can be summarized to the following:

  • The lack of objectivity

Bias is generally defined as an inclination or prejudice for or against one person or group, especially in a way considered to be unfair. In the context of performance evaluation, this bias is directed towards the employees or teams that are being assessed and it has an impact on their overall performance review.

  • The halo effect

This type of problem arises when the person carrying out the appraisal generalises the positive or negative impression to several individual performance categories, thus resulting an overall performance assessment influenced by this type of extrapolation.

  • The recency effect

It implies the evaluator’s tendency to focus on an employee’s recent activities, behaviours and performance (good or bad), rather the performance registered throughout an extended period of time. An employee’s errors or increased performance shortly before the beginning of the performance review period should not be defining for the overall employee assessment. An unbiased and fair appraisal should take into consideration the performance registered throughout the entire appraisal period.

  •  The distributional tendency

In this case, evaluators are faced with three types of errors: the strictness tendency, when almost all those evaluated are rated below average, the central tendency, when no one is rated really bad or really good in terms of performance, and the leniency tendency, when all those assessed are considered to have performed above average.

  • The prejudice (stereotype)

It entails the identification of an employee with a certain group and the assumption that the characteristics of that group apply to the employee as well. Irrespective of its positive or negative nature, this type of approach prevents the evaluator from identifying the characteristics of individuals and getting to know them in order to conduct an objective and fair evaluation of their performance.

  • The contrast tendency

In this case, evaluators resort to comparisons between employee performance with the view of assessing each individual’s performance and they fail to objectively evaluate it based on actual facts and results.

All in all, performance appraisal implies evaluating past performance and triggering the behaviours that will increase their future performance in employees. In order to improve the assessment process and carry it out in a proper way that is unbiased, organisations should develop and provide evaluators with accurate performance appraisal measures and methods.

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