Limitations of Performance Appraisal

Question

What are the limitations of Performance Appraisal?

Answer 1

The main problems associated with performance appraisal are as follows:

1. Errors in Rating: Performance appraisal might not be perfect and thus it is not a valid potential of employees and performance indicator due to some errors.

2. Lack of Reliability:  Reliability or dependability means stability and consistency in the measurement. Reliability of performance appraisal is reduced by lack of consistency over time.

3. Incompetence: Knowledge and experience are big factors which decide rater’s ability to evaluate the performance. If post appraisal interview is not handled effectively, raters may fail to evaluate.

4. Negative Approach: Performance appraisal is not of any use when the focus of management is on punishment and not on development of employees.

5. Multiple Objectives: Objective of performance appraisal should be clear to Raters otherwise he will get confused due to two many objectives.

6. Resistance:  Negative ratings may have an effect on interpersonal relations and industrial relations mainly when employees or unions lose faith in the system of performance appraisal.