The document discusses the various problems associated with performance appraisal in organizations, including inconsistencies in manager training, subjective evaluation criteria, and the lack of measures for performance improvement. It outlines key performance appraisal methods like ranking, rating scales, checklists, and critical incidents, noting their advantages and disadvantages. Additionally, the document provides links to resources and related topics for further assistance in performance appraisal challenges.

1. Problems of performance appraisal
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I. Contents of getting problems of performance appraisal
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Performance appraisal is important for organizations and employees. Unfortunately, performance
appraisals are not on the top of the list of "favorite things to do" for either managers or
employees, and there can be a number of problems with their administration. From managers not
being trained to conduct performance appraisals effectively to the failure to tie performance
appraisal expectations to desired business results, businesses are often challenged to use this tool
effectively.
Poorly Trained Managers
Effective performance appraisal doesn't just happen and organizations shouldn't assume that
managers know how to conduct them effectively, even if they have many years of experience as
managers. In fact, since the process can differ from organization to organization, it is important
that training is provided to introduce managers to the philosophy of performance appraisal at the
organization, including a review of the forms, the rating system and how the data gathered is
used. Training should take place regularly as a refresher both for new and veteran managers.
Inconsistent Ratings
Inter-rater reliability is generally very low between managers at any organization. What one
manager considers to be "acceptable" performance, another may consider "not meeting
expectations." This can be a challenge for any organization and is made more of a challenge in
situations where the criteria used are subjective and not based on any measurable performance
outcomes.

2. Lack of Outcome-Based Measures
Performance appraisals that ask managers to rate employees on subjective criteria such as
"customer service skills" or "leadership ability" lack specific outcomes that can be tied to
measurable results. The best performance appraisals provide the ability for both managers and
employees to judge performance based on measurable outcomes that are objective; level of sales,
safety records and evaluations from customers are all meaurable ways of providing insight into
an employee's performance.
Not Used for Performance Improvement
The purpose of performance appraisal is not only to provide input to employees about how
they're doing, but also to provide the organization with an indication of areas of employee
strength and opportunities for improvement. Unfortunately, few companies actually aggregate
and use the results of performance appraisal for performance improvement efforts. By analyzing
results and taking advantage of both best practices in areas where employees are performing well
and opportunities for improvement in areas where they're not, organizations can receive
maximum value from their performance appraisal efforts.
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III. Performance appraisal methods
1.Ranking Method
The ranking system requires the rater to rank his
subordinates on overall performance. This consists in
simply putting a man in a rank order. Under this method,
the ranking of an employee in a work group is done
against that of another employee. The relative position of
each employee is tested in terms of his numerical rank. It
may also be done by ranking a person on his job
performance against another member of the competitive
group.
Advantages of Ranking Method
i. Employees are ranked according to their performance
levels.
ii. It is easier to rank the best and the worst employee.
Limitations of Ranking Method
i. The “whole man” is compared with another “whole man”
in this method. In practice, it is very difficult to compare
individuals possessing various individual traits.
ii. This method speaks only of the position where an

3. employee stands in his group. It does not test anything
about how much better or how much worse an employee
is when compared to another employee.
iii. When a large number of employees are working, ranking
of individuals become a difficult issue.
iv. There is no systematic procedure for ranking individuals
in the organization. The ranking system does not eliminate
the possibility of snap judgements.
2. Rating Scale
Rating scales consists of several numerical scales
representing job related performance criterions such as
dependability, initiative, output, attendance, attitude etc.
Each scales ranges from excellent to poor. The total
numerical scores are computed and final conclusions are
derived. Advantages – Adaptability, easy to use, low cost,
every type of job can be evaluated, large number of
employees covered, no formal training required.
Disadvantages – Rater’s biases
3. Checklist method
Under this method, checklist of statements of traits of
employee in the form of Yes or No based questions is
prepared. Here the rater only does the reporting or
checking and HR department does the actual evaluation.
Advantages – economy, ease of administration, limited
training required, standardization. Disadvantages – Raters
biases, use of improper weighs by HR, does not allow
rater to give relative ratings

4. 4. Critical Incidents Method
The approach is focused on certain critical behaviors of
employee that makes all the difference in the
performance. Supervisors as and when they occur record
such incidents. Advantages – Evaluations are based on
actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases,
chances of subordinate improvement are high.
Disadvantages – Negative incidents can be prioritized,
forgetting incidents, overly close supervision; feedback
may be too much and may appear to be punishment.
5. Essay Method
In this method the rater writes down the employee
description in detail within a number of broad categories
like, overall impression of performance, promoteability
of employee, existing capabilities and qualifications of
performing jobs, strengths and weaknesses and training
needs of the employee. Advantage – It is extremely
useful in filing information gaps about the employees
that often occur in a better-structured checklist.
Disadvantages – It its highly dependent upon the writing
skills of rater and most of them are not good writers.
They may get confused success depends on the memory
power of raters.
6. Behaviorally Anchored Rating Scales
statements of effective and ineffective behaviors
determine the points. They are said to be
behaviorally anchored. The rater is supposed to
say, which behavior describes the employee
performance. Advantages – helps overcome rating
errors. Disadvantages – Suffers from distortions
inherent in most rating techniques.

5. III. Other topics related to Problems of performance appraisal (pdf download)
• Top 28 performance appraisal forms
• performance appraisal comments
• 11 performance appraisal methods
• 25 performance appraisal examples
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