Factors limiting the effectiveness of a performance appraisal system
i. Misunderstanding and mistrust of the appraisal scheme– the appraisal interview may be seen as an informal, loosely constructed and badly managed dialogue without purpose.
ii. Bureaucracy – a system based on forms devised solely to satisfy the employer. Thus its main purpose that of identifying individual and organisation performance and improvement, is forgotten.
iii. Confrontation due to lack of agreement on performance, badly explained or subjective feedback, performance based on recent events or disagreement on longer term activities. In an expanding organisation where performance criteria are unclear, this is a serious barrier.
iv. Biased judgement – the appraisal is seen as a one sided process based entirely on the manager’s or owner’s perspective. This is a danger since staff members may be frustrated to realize that their appraisals will be based partly on the activities of others.
v. Unfinished Business – the appraisal is not seen as part of a continuing process of performance management. Without clear performance criteria, the appraisal is obviously an exercise in futility.
vi. An Annual Event – the appraisal is seen as simply an event which sets targets annually that quickly become out of date. Appraisals are best held more frequently