Limitations of Performance Appraisal System

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Limitations of Performance Appraisal System

By Manisha Vaghela
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
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.
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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.
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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.
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LIMITATIONS OF PERFORMANCE APPRAISAL SYSTEM
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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.
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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.
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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.
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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.
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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
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Bibliography
1.) Human Resource Management -C.B.Gupta Sultanchand & Sons 2.)Human Resource &Personnal Management - K.Aswathappa Tata Mc Graw hill
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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
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