Performance appraisal is a function within the performance management system that is carried out by human resource managers to review an employee’s performance within an organization. Employees are the key stakeholders in an organization. The success of their individual goals is paramount to the development of any business.
Performance appraisals weigh the knowledge and skills of employees against the achievement of individual and organizational goals (Nurse, 2005). It is necessary for every organization to carry out performance appraisal for its employees since it helps in the identification of areas that need adjustment and professional growth.
The assessment of an employee’s performance gives an insight on his or her job knowledge, quality of work, productivity, dependability, attendance and punctuality, relationship with other employees, adherence to rules and procedures, and supervision ability among other performance attributes (Beer, 1981). However, as the paper reveals, the process of performance appraisal faces numerous challenges.
Feldman (1981) attests that performance appraisal is one of the most difficult tasks in the managers’ jurisdiction. Challenges encountered in the process of performance appraisals revolve around the purpose of the appraisals, attributes of examination, and the contribution of the appraisal to the development of an organization.
Challenges involved in Performance Appraisal
Personal bias is the biggest challenge in carrying out performance appraisals within any organization. The feedback that results from the performance is meant to guide the modification and adjustment of norms that shape the behavior of workers in the desired direction concerning activities such as mentoring programs, positive reinforcement, counseling, and rewarding of the best-performing employees.
However, personal biases have been rampant in organizations where managers appraise employee poorly in favor of others. Such a bias hinders the constructive use of performance appraisals in terms of depicting cohesiveness amongst employees and improved performance of roles and responsibilities. It also hinders the realization of the organization’s development agenda, goals, and objectives (Ahmad & Ali, 2004).
Personalities of both supervisors and employees influence the performance appraisal by substituting the organizational standards within the evaluation procedures. Supervisors mostly tend to fall prey of subjectivity rather than the objectivity of the employee in attaining organizational goals. Subjectivity leads to unfairness in the formulation of the evaluation decisions.
This practice is termed as biases that reduce employee motivation and innovativeness. The qualities of good employers require them to have unbiased employee policies, appraisal guiding principles, motivational approaches towards employees, good pay schemes, and incentive policies.
These attributes help an organization to minimize turnover rates while at the same time capitalizing on maximizing the present employees’ capabilities of growing their career paths within the framework of achieving the organizational goals (Beer, 1981).
Poor assessment is another challenge during performance appraisal. Many organizations pay little or no attention to the knowledge of managers on the assumption that since they are the bosses, they have adequate awareness of the organizations’ expectancy in conducting employee evaluation. Inadequate managerial training regarding the requirements of the employee assessment leads to improper implementation of many appraisal programs.
Poor assessment of individual performance results in discontented employees within an organization. This situation further leads to misunderstanding amongst the supervisors and employees. Consequently, such circumstances adversely affect the achievement of the performance goals of an organization. It is always worthwhile to have knowledgeable supervisors carry out evaluation procedures (Nurse, 2005).
Halo and Horns Effect
‘Halo and horns’ effect refers to the manager’s assumption that an employee is competent or non-competent in terms of performance of assigned tasks in an organization. Specifically, the halo effect refers to a situation where a manager or supervisor may give credit to an employee based on some previous good performance without giving attention to the current performance trends.
On the other hand, the horns effect is a contrasting phenomenon to the halo effect where a manager may underrate the performance of an employee due to the previous failure in duty. In general, the effect of ‘halo and horns’ results in errors in rating and evaluation of employee abilities (Nurse, 2005).
Overestimation of an employee’s performance creates a false impression since the employee in question assumes good performance that shields him or her from improvement. In contrast, underestimating the performance of employees lowers their self-esteem. This outcome is very detrimental to the development of both personal and organizational goals.
The outcome of the performance appraisal enables employees to know their strengths and weaknesses in terms of duty performance. In most cases, employees resist the appraisal process in the dilemma of the negative outcome on their performance. Employees should be given clear information on the purpose of the appraisal. Measuring standards should be communicated, stating what the organization expects from employees (Nurse, 2005).
Workers who get positive results should be rewarded through promotions, wage increment, and incentives, whereas employees with negative results should be equipped with adequate knowledge through training.
Lack of Competence
In some cases, managers exhibit poor leadership and managerial competence. Leadership styles in any organization determine the accomplishment of both personal and organizational goals. Competence influences the design and process of performance appraisal (Ahmad & Ali, 2004). For instance, autocratic leaders tend to be more authoritative.
Thus, their decisions control the entire process of performance appraisal, whereas a democratic leader creates a sensible battleground for every employee as a way of enhancing the involvement and good relations in every aspect of the performance appraisal.
According to Ahmad and Ali (2004), laissez-faire leaders create a havoc environment since they exhibit less commitment. They have inadequate skills to ensure cohesiveness of organizational objectives. Their trend of carrying out performance appraisals turns out to be inefficient.
Determination of the Appraisal Criteria
Ahmad and Ali (2004) hold the opinion that varieties of appraisal approaches that are used in organizations have their credits as well as discredits. There exists no wrong or right evaluation approach. However, consistent use of these approaches helps managers to manipulate their successfulness. Appropriate appraisal techniques judge correct results in terms of employee achievement of personal and organizational goals.
Managers have the mandate to choose suitable appraisal methods to evaluate their employees (Ahmad & Ali, 2004). Use of inappropriate evaluation methods brings false results to the employees’ accomplishments of organizational goals. This outcome leads to demotivation and downward growth in their performance areas within the organization. Emphasis on specialization areas helps determine the correct approach for a particular evaluation.
Beer (1981) classifies performance appraisal measurement into three groups, namely measuring units, behaviors, and results. The most commonly used method is the assessment of an employee’s trait that entails a closer examination into his or her personality. Behavior-oriented evaluation gives an insight into how the employee relates with colleagues, whereas the results-based approach gives the employees’ overall contributions to an organization.
The factor of Time and Cost
Time and cost are the major factors that limit the use of some appraisal techniques that produce the best results. Performance appraisal requires the evaluator to maintain proper track of each employee by writing reports and documenting employees’ details (Ahmad & Ali, 2004). Also, long assessment forms usually require more time to fill the evaluation details.
Thus, they are avoided, despite the ability to provide detailed information on employee performance. Also, appraisals depend on the area of specialization of an employee in an organization (Bretz, Milkovich, & Read 1992). Thus, appraisal forms are custom-made to avoid generalization that may result in the inadequate evaluation of an employee.
It requires more time to design appraisal forms for different employees within an organizational setting. In some cases, managers find it easy to repeat an evaluation activity using previous appraisal forms instead of formulating new ones that encompass any new changes within the organization.
Annual Performance Appraisals
Most performance appraisals within organizations are carried out on an annual basis, which leads to an inaccurate review of the employee performance (Beer, 1981). One-year cycle appraisal systems lead to ineffectiveness and inconsistency of employee performance records since they take place within a specified period of an organization’s business calendar.
This may leave important short-term performance goals since such systems only capture the ongoing employee performance at the time of appraisal. According to Beer (1981), annual evaluation reduces the foreseen value of the entire appraisal process.
Political mask in a performance appraisal also affects its effectiveness. According to Ahmad and Ali (2004), many managers willingly manipulate performance appraisals for political purposes. The design of such performance appraisals leaves very crucial assessment procedures to suit certain political interests.
This situation depicts that a manager purposefully carries out a performance appraisal that does not address the prevailing needs of the organization to build the careers of the employees in the achievement of the organizational goals. These appraisals supersede the need for accuracy by adhering to fashioned evaluation methods, which address the exact interest of the appraisal by giving false results about the employee performance.
The implementation of such outcomes hinders the growth of individuals and organizations (Ahmad & Ali, 2004). Managers are required to create a clear balance between political, financial, and development issues that relate to the structures of the organization. Conclusion
The workability of a performance appraisal is critical for organizations. Evaluation of an organization’s workforce helps in determining the weaknesses and strengths of the organization’s developmental framework. A successful performance appraisal gives a clue in terms of the design of new policies and procedures that are aimed at developing organizational goals. Employees are amongst the key stakeholders in any organization.
To realize employees’ capabilities and competencies, the appraisal procedures used in the evaluation should not only focus on task performance but also the personal development of the individual employees.
The evaluation process should be well structured to capture both the design and the process of implementation and maintenance, as stated in the performance management policy of the organization. Timely feedback should be given priority to give employees adequate time to adjust to changes, which may have resulted in the event of the appraisal.
Time-to-time training and learning help managers develop sound appraisal programs with fewer strategic and operational errors. Standard performance appraisals leave room for review and adjustment to accommodate the current challenges and issues within the dynamic set up of an organization. This strategy improves the effectiveness of the appraisal outcomes for individuals and organizations.
Ahmad, R. & Ali, N. (2004). Performance appraisal decision in Malaysian public service. International Journal of Public Sector Management, 17 (1), 48-64.
Beer, M. (1981). Performance appraisal: dilemmas and possibilities. Organisational Dynamics, 9(3), 24-36.
Bretz, R., Milkovich, G., & Read, W. (1992). The Current State of Performance Appraisal Research and Practice: Concerns, Directions, and Implications. Web.
Feldman, M. (1981). Beyond attribution theory: Cognitive processes in performance evaluation. Journal of Applied Psychology, 66(1), 127-148.
Nurse, L. (2005). Performance appraisal, employee development and organisational justice: exploring the linkages. The International Journal of Human Resource Management, 16(7), 1176-1194.