Reasons for ineffective Performance appraisal

by Ashvini on January 3, 2012 · 4 comments

in Managing Team effectively

Performance appraisal a tool using which organization assess employees by comparing their performance  to the goals that were set at the start of the year.

However performance appraisals rarely meet stated objective. Often performance appraisal is treated as a mere formality. Performance appraisal is a great tool only if used correctly.

Here are a few reason for why the performance appraisal ultimately turn out to be ineffective.

Performance Appraisal is often considered as formality

Performance Appraisal is often termed an exercise that needs to be completed. The reason for completion is just to finish one more pending task. It then just becomes a formality just like many other organization tasks. It renders the whole purpose of Performance Appraisal ineffective.

Improper goals setting

Performance Appraisal  to be successful needs  clear goal setting.

Let us take a look at this example.

  • The employee needs to write at least three white papers
  • The employee needs to learn new technology

While the former is a clear cut goal , the latter is vague. If the goal setting is not precise and measurable then it may lead to ineffective Performance Appraisal

Changes to goals due to any reason are not updated in time

Changes in organization’s business may cause changes to the employee goals as well. For example, if the organization now requires its employee to concentrate on selling new product instead of the old one the goal has changed and thus performance needs to be measured against new goal.

Managers bring personal bias into the appraisal

Managers may often bring in their personal likes and dislikes of subordinates in the performance appraisal thus reducing its effectiveness. Though constructive criticism is acceptable, personal bias may muddle the system and people may not be judged on the goal set.

Organizations that do not have a clear cut plan of action

The important question is “What does organization expect out the performance appraisal system”. If it is just to generate reports, then probably it is not good.Performance appraisal should have common expectation and plan built around it that can be put in action once the process is completed. If the plan is to hike salaries or promote individuals after appraisals, then it needs to be followed to the end.

Not effectively preparing employees and managers

It is the job of Human resource department to make performance appraisal system easy and transparent. Lack of proper training on performance appraisal system often lead to incorrect appraisals.

Complicated performance appraisal systems

An organization has a grade “Above average performer”. It means the employee consistently does his job above the average. Another grade is added “ Exceeds expectation” which is quite similar to the one before.

This may lead to confusion and wasted time. A plethora of grades ranging from 0-10 with no clear cut explanation what 7 or 8 means leaves itself for subjective interpretation.

Managers are not trained to handle outcome of performance exercise

Managers are often not trained to provide feedback sensitively. In a bid to be honest about the performance of expectation, they may cause resentment among employees. The goal of the exercise is to assess and improve performance. If it leads to resentment in team , then the whole purpose is defeated.

Feedback that appear out of no where suddenly at the end of year

The employee gets a shock when during the performance exercise , manager brings up those points that the employee feels are not important. A sudden deluge of feedback at the year end leads employee to think that the management is driven by hidden agenda. Feedbacks needs to happen whole of the year and not only on the performance appraisal day

Do you think performance appraisal is a good tool but is not handled well?

About The Author


Aswani January 6, 2012 at 11:30 pm

Ashvini…all great points..! Yes…I am in favor of such appraisal policies. I do not see any harm in this as long as it is legitimate. I have myself been through appraisal process here and like it or not, it is never as expected. It is more like hope against hopelessness. But anyways, appraisal policies do make a big difference considering it is never ever the same for all employees. Some get 5% hike, for some 10% and those who stand out from the rest are considered for 15% hike which at most can be increased to 20% which I guess happens in most of the IT companies. This often is a subject of argument and probably one of the single biggest reasons for a higher attrition rate in the organizations. Anyways, Appraisal still is a valuable tool for judging employees performance over a period of time. It shouldn’t be prone to anything like as mentioned above in your article and only then it can be effective and acceptable to the employees…!

Cindy January 4, 2012 at 4:42 am

really nice text, I totally agree with you. I think performance appraisal could be a really effective tool, but in the most cases, it isn’t used in the right way. As you describe it, there are many aspects of the use of it. Especially in the quality management of a company, it is necessary to use these tools.

Adrienne January 3, 2012 at 9:38 pm

I can only speak from experience when it comes to performance appraisals Ashvini so I have mixed feelings about them as well.

I was an executive assistant my entire career and also served as office manager for some of those positions. So we would have these performance appraisals for myself and my employees at only some of the companies. Mainly because the tasks that a lot of people were hired to do were rather routine and there wasn’t really anything they could go above and beyond doing.

I think a lot of companies just had them so they would have an excuse whether or not to give the employee a raise. But when you are limited to what you can do I never saw that as being fair.

As for me, if I ever got bored because I was finished with the tasks at hand I would go in search of things to do. I even volunteered to learn new software programs because not only did I enjoy learning but it sure did look good on my resume for later down the road.

I guess in larger corporations when the positions require a lot more variations from the employees that this would be a lot more beneficial. That’s my two cents worth at least.


Ashvini Kumar Saxena January 5, 2012 at 2:20 pm

Hi Adrienne,
Great point !!! What needs to be done when someone is hired for repetitive work kind of job? In my opinion the organization is not doing right things when they use appraisal process as an excuse to avoid raising salary. They thus have employees who are not motivated enough to make changes. They won’t participate in company’s well being. They wouldn’t care for efficiency. Most of the government jobs in India are like that. There are smart people but they really are not encouraged to change things.
I am also like you that I keep learning things when there is not much to do. It always help later on. However , I wish organizations understand that they need to have the right process for people development.
Thank you so much for your comment. I really appreciate :)

Comments on this entry are closed.

Previous post:

Next post: