The shortcomings of traditional performance appraisal methods

Performly, 2021-05-17 16:49:59

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    Every company owner, HR Manager, or director usually uses a certain Human resources management system to evaluate the performance of their employees, whether their methods are traditional or modern they fall into three categories and these categories are absolute, relative, and objective methods where

  • Absolute: is used to evaluate the performance of an employee in comparison to standards established by the firm. Evaluation is done on an individual basis rather than comparing co-workers to each other.
  • Relative: also known as forced distribution, is where an organization has a predetermined standard for the evaluation of their employee's performance. An example is 70% of employees have average performance, 10% are above average and 20% have below average or poor performance, and the employees will fall into these categories with their performance across the year according to the appraiser.
  • Objective: where managers and employees together identify, plan, organize, and communicate objectives to focus on during a specific appraisal period and it is an ongoing process with back and forth feedback and evaluation.

    It is clear that these categories have gone through evolution through a time where traditional methods have been shown to have many shortcomings and modern performance appraisal systems needed to be invented to fill in the gaps.

The following are some examples of Traditional performance appraisal methods:

Rating Scale Method: 

Where rating scale (ex:1-10) is created to evaluate the performance of an employee against certain parameters where 1 the lowest score is and 10 is the highest rating, these parameters usually include the employees’ attitude, attendance, punctuality, and interpersonal skills.

Forced Distribution Method: 

    This is usually utilized in large organizations, where the manager measures, ranks, and grades employees' work performance based on their comparison with each other instead of against fixed standards, then the manager has to distribute the number of employees over the bell-shaped graph where a certain percentage of them are considered strong in performance (ex:20%), average performance employees (ex:70% ) and low-performance employees (ex: 10%)

Field Review Method: 

    Where the HR specialist asks the superiors questions about their employees’ behavior, performance, and skills (Excellent, Very Good, Good, Average, Poor), based on their perspective the HR specialist makes their final review.

Checklist method: 

    In this method the supervisor/manager checks (Yes or No) against a predetermined list of descriptive statements related to the behavior of the employee.

And the shortcomings of these methods that they have where some share many of are :

  • Lack of objectivity: some human traits cannot actually be measured as they rely on the perception of the appraiser due to their subjective nature, which makes the appraisal process flawed and not 100% fair. This is something that cannot be avoided additionally some may argue that these traits can be unrelated to the job itself.
  • Halo/Horn Error: during the appraisal process the opinion of the appraiser can be influenced by one incident that may occur during the course of the employees’ job. This incident can either be positive (Halo) or Negative (Horn error) where it affects the overall rating of the employee.

    when considering that one positive or negative incident, it can be perceived as dedication or obedience or as reckless or defiant consecutively by the appraiser. This is not an accurate reflection of employee performance rather a misguided generalization.

  • Central Tendency Error: when the appraiser is asked to tick against an attribute whether it is Excellent, Very Good, Good, Average, Poor, they generally evaluate the employees near the average or the middle of the scale trying to avoid confrontation of controversy. While at the same time not being objective with the appraisal.
  • Manipulation of the evaluation: by presenting the appraiser with a predetermined list to tick it as true or false, this does not allow for much explanation of the reason why he/she has made this choice. It can also steer the evaluation into certain types of questions while omitting some that are important and influential to the overall assessment.

    Due to the fact that the overall structure of businesses has changed and that there is nothing traditional about it anymore, many businesses are opting towards a more holistic approach where performance appraisal can be conducted remotely using an HR management system and is an ongoing process with regular feedback, task management and Have One-on-One Check-In Meetings.