What are the 5 limitations of performance appraisal?

Five Notable Limitations of Performance Appraisals

Performance appraisals, intended to evaluate employee performance, can be flawed by several limitations that hinder their effectiveness.

1. Over-averaging (Central Tendency):
   Appraisers tend to avoid extreme ratings and group evaluations toward the middle range. This “safety net” behavior dilutes distinctions between employees and fails to accurately reflect their performance.

2. Overly Harsh or Lenient Ratings:
   Personal biases and subjective interpretations can skew ratings. Appraisers may favor or penalize employees based on factors unrelated to their performance, leading to unfair judgments.

3. Halo Effect:
   One dominant trait or behavior can overshadow other aspects of performance. For example, an employee with a strong personality may be perceived as overachieving in all areas, even where their performance is average.

4. Recency Bias:
   Appraisals often focus heavily on recent events, neglecting past performance. This can create an incomplete and unreliable evaluation, as it fails to provide a comprehensive assessment of overall contribution.

5. Personal Feelings:
   Appraisers’ personal feelings towards employees can influence their judgments. Likeability, camaraderie, or past conflicts can bias ratings, compromising the objectivity of the evaluation process.

These limitations highlight the challenges associated with performance appraisals. To mitigate these flaws, it is crucial to implement fair, structured, and consistent evaluation methods that minimize the influence of subjective biases and ensure accurate assessments of employee performance.