What are the common problems in performance appraisals?

What are the common problems in performance appraisal?

There are numerous issues that can arise from or during performance appraisal, many of which are related to our own biases. However, the more aware we are of such biases, the easier it is to identify and prevent these biases from having a negative impact. 

Appraiser bias

Prejudices are an inherent trait of humans – research shows that we make more decisions based on our own biases instead of facts and logic. When conducting a performance appraisal, it is possible for the appraiser to, consciously or unconsciously, formulate bias in favour or against an employee, thereby affecting the outcome of the performance appraisal. 

Halo effect

This refers to the process whereby an appraiser takes a trait of an employee, such as personality trait, physical trait, or previous work experience, and bases their judgement on this one aspect. For example, if an employee always exceeds performance expectations, an employer may generalise based on this, rather than conduct a thorough and objective performance review. 

This is why it is important to conduct evaluations that are accurate and allow managers to analyse observable results that cannot be misconstrued through interpretation. This is where real-time performace management software can help as it can continuously collect information to be used in performance evaluations. 

Extended periods between appraisals

Another common issue seen with performance appraisals is the extended time period between reviews – organisations typically do this once a year. However, this means that employees do not receive continuous, instant feedback on their work. This can leave some employees feeling frustrated or confused as they are unable to determine whether they are improving in their performance.  

Lack of recognition

Another significant issue with performance appraisals is the fact that many managers focus on the negative, not the positive. When providing feedback, it’s important to structure it in a constructive manner where employees are given appreciation as well as constructive criticism. This will positively impact their productivity and engagement level. 

What are 3 mistakes that a manager should avoid when conducting a performance appraisal?

While performance appraisals have the potential to enhance an employee’s work experience, they can often do the opposite, leaving them unsatisfied. This can generally be attributed to managers and the mistakes they make during the performance appraisal process. 

Not following up with employees after evaluations

Many managers make the mistake of not following up with employees after performance appraisals. The task may have been completed, however, a performance appraisal should lead to the formulation of goals and action plans going forward. While employees should be responsible for developing themselves, managers have the responsibility of supporting their employees where possible so that they can achieve their goals. 

Central tendency

This refers to when an appraiser gives employees an average rating across all performance scales. This is typically done when raters do not want to hurt employees’ feelings or they simply want to avoid over- or under-rating employees’ abilities. 

This does not only result in an inaccurate reflection of an employee’s performance, but it also negatively impacts the data retrieved from these appraisals. This will limit management’s ability to make informed, proactive decisions. 

Recency effect

This occurs when the person conducting the performance appraisal focuses on the most recent events or work of an employee instead of reviewing the entire performance period. 

This means that, if a poor-performing employee suddenly performs well in the time leading up to the appraisal, they will have a good performance review, which would simply be an inaccurate reflection of their overall performance during the past year. 

On the other hand, an employee who generally performs well may drop in their performance, and this may simply be due to factors outside of their control. This would then result in the employee receiving a poor performance review, which does not accurately reflect the work they’ve put in throughout the period being reviewed. 

How to reduce errors during performance appraisals

While performance appraisals can bring up numerous issues, it is possible to reduce these errors. Firstly, it’s important that senior management learn the basics of performance management which will help them to conduct such reviews in a constructive manner. 

Now, we’ve seen from the above information that biases negatively impact appraisals. By educating staff about the potential forms of bias, you can help them to become aware of their own behaviour, identify when bias is clouding their judgement as well as ways they can mitigate the effects of biases. 

Another way to reduce errors is to use all available resources during the appraisal process. Using documentation that supports an appraisal, such as an employee’s sales records, will ensure that a manager is reviewing the employee’s performance objectively, and reduces their reliance on memory. Additionally, the standards against which an employee’s performance is measured should be objective. 

Once a manager has completed the draft version of a performance appraisal, they could send this, along with supporting documentation to be reviewed by a colleague to ensure that they have conducted an objective evaluation.