Performance appraisal is critical for any organization. It helps in the measurement of the performance of employees and as such, helps in knowing the areas that may need to be strengthened. Further, performance appraisal accords the employees an opportunity to know their areas of weakness. However, performance appraisals are not full proof, they are also susceptible to errors. The errors can negatively impact the outcome and undermine the overall objective of the performance appraisal process. An understanding of the possible errors is crucial to avoiding or eliminating them.
The halo effect is the first of the errors related to performance appraisal. An assessment may be influenced by the halo effect when the evaluator generalizes an employee element or characteristic to the entire assessment, either because it is a highly perceptible element or because This is an important element in his eyes. For example, an employee always exceeds their sales goals and wins all in-house sales competitions. At the time of evaluation, it is quite possible that the evaluator’s judgment may be tinged with this aspect and evaluated as being excellent for all of his responsibilities. To disperse the “halo”, it is advisable to develop an evaluation grid that is as precise as possible and that will make it possible to evaluate observable and measurable facts to leave as little room as possible for the interpretation or subjectivity of the assessor. It is also recommended to detail each section of the evaluation grid before evaluating overall performance.
Other than the halo effect, there is the recency effect. This refers to a scenario where the evaluator may be obsessed with the fact that an employee did some mistake in the recent past, for instance, lost a client the week before the assessment, and forget that the employee managed many complex files with flying colors. Whether positive or negative, events occurring shortly before the assessment may take a disproportionate place in the evaluator’s mind and the evaluator may forget to take into account previous facts that should be strongly considered. To avoid falling into this trap, the person responsible for the assessment can put relevant information into a file as it happens. Reading this file at the time of the evaluation will help maintain a more accurate image of the employee.
The effect of central tendency is also of concern in performance appraisal. When evaluating their employees, some evaluators place a mark in the middle of the rating scale at practically all for each category. This error may be because they lack experience in staff assessment, or that they have little time to devote to the thinking that evaluation requires. They may also know too little about their employees and believe that an average score will please everyone. Those who tend to have difficulty deciding could benefit from using a scale without median (neutral) scoring. They could also use, in place of numbered scales, an evaluation grid with lists of behavior descriptions that have been previously drafted taking into account the objectives of the company.
Indulgence and severity effects is also common mistake. For indulgence effect, the evaluator assigns the highest score on the rating scale to everyone. These evaluators think they will show their appreciation to their employees or hope to be perceived as a friendly employer. This bias can show that they are rather uncomfortable in their role as evaluators, that they have a hard time taking a stand and that they do not want to make waves. In contrast, the severity effect is where evaluators tend to give very low marks to a few or the vast majority of their employees. Some focus more naturally on the negative aspects of situations, while others have very high standards, which makes them more critical than average.
Generally, these errors cannot be completed eliminated but can be minimized by using appropriate tools. Tools should be designed in such a manner that they take into consideration such errors and incorporate approaches that would either eliminate of keep minimal such occurrences if they occur.
Reference
Burke, P. Y. (2017). Performance Appraisals. Technical Career Survival Handbook, 201–202. doi: 10.1016/b978-0-12-809372-6.00080-3