What are the objectives of “Performance Appraisal System” What are sources of error in the appraisal process

Q. What are the objectives of “Performance Appraisal System” What are sources of error in the appraisal process.

Ans.   Performance appraisal is a method of evaluating the behaviour of employees in the work place normally including both the quantitative and qualitative aspects of job performance. Performance refers to the degree of accomplishment of the tasks that make up an individual’s job. It indicates how ell an individual is fulfilling the job demands.

Every organization has to decide upon the content to be appraised before the programme is approved on the basis of job analysis. The content to be appraised may vary with the purpose of appraisal and type and level of employees Performance Appraisal is a method of evaluating the behaviour of employees in the workplace.

Objectives of Performance Appraisal System:

1. To create and maintain a satisfactory level of performance.
2. To contribute to the employee growth and development through training, self and management development programmes. Tata Power aims at employee development through performance appraisal.
3. To help the superiors to have a proper understanding about their subordinates
4. to guide the job changes with the help to continuous ranking
5. To facilitate fair and equitable compensation based on performance.
6. To facilitate for testing and validating selection tests, interview techniques through comparing their scores with performance appraisal ranks.
7. to prove information for making decisions regarding lay off, retrenchment etc as in the case of Hyundai Engineering

Sources of Error in Performance Appraisal:

1. Rating Biases: It is a subjective measure of rating performance which is not verifiable by others and has the opportunity for bias. There rater biases include: a) the halo effect b) the error of central tendency c) the leniency and strictness biases d) personal prejudice and e) the recency effect.

1. Halo Effect: it is the tendency of the raters to depend excessively on the rating of one trait or behaviourial consideration in rating all other traits or behavioural considerations. One way of minimizing the halo effect is appraising all employees by one trait before going to rate them on the basis of another trait.

2. The Error of Central Tendency: Some raters follow play safe policy in rating by rating all the employees around the middle point of the rating scale and they avoid rating the people at both the extremes scale. They follow play safe policy because of answerability to the management or lack of knowledge about the job and person he is rating or has least interest in the job.

3. The Leniency and Strictness: the leniency bias crops when some raters have a tendency to be liberal in their rating by assigning higher rates consistently. Such ratings do not serve any purpose. Equally damaging is assigning consistently low rates.

4. Personal Prejudice: If the rater dislikes any employee or any group, he may rate them at the lower end, which may distort the rating purpose and affect the career of these employees.

5. The Recency Effect: The raters generally remember the recent actions of the employee at the time of rating them on the basis of these recent actions   favourable or unfavourable-rather than on the whole activities.