Rating Errors of performance appraisal are as follows:
1. Rating Errors: Positive or negative deviations in ratings of performance appraisal, which affect its accuracy, are termed as rating errors.
The most common rating errors are as follows:
i) First Impression Error: It occurs when a manager forms a positive or negative image about an employee on the basis of the first impression and keeps it in mind for future judgments as well. It is also known as the primary or primacy effect.
For example, a new manager finds that an employee is not performing properly. The reason behind this is that his parents had recently died in a mishap.
In a month’s time, the employee became normal and began giving a high-level performance, but the manager’s opinion did not change as it was negatively influenced by the first impression.
ii) Halo Effect: It takes place whenever a rater gives too much importance to a particular factor of performance and gives identical ratings to other performance factors as well.
For example, if an employee is always the first one to reach the office and the last one to leave the office, he is considered to be very industrious and creative.
Whereas an employee with a casual attitude and relaxed body language would not be taken seriously and would not be relied upon.
These two judgments taken by a manager are based on the halo effect and might not be accurate as the manager has taken into account only a single obvious characteristic of the employees.
Such judgments should be carefully examined as a single trait cannot define the character and performance of an employee.
iii) Strictness or Leniency: Several managers rate their subordinates equally, either low or high. These are known as strictness or leniency errors.
The strict manager assigns lower ratings to what an employee is entitled to. While the lenient manager assigns a higher rating than entitled.
For example, Ramesh gives higher ratings to all his employees than what they deserve because he feels that this will motivate them to perform better, and they will put all their efforts to match up with the rating being given to them.
iv) Central Tendency Bias: Some managers play a safe game by giving average ratings to all the employees. It could be performed with a view to averse the need for valid scoring across two ends.
The reason behind this is because several systems want the managers to mention additional remarks when assigning too high or too low ratings to employees.
v) Recency Bias: Recent actions have the tendency to surpass overall performance. Generally, people have a short memory.
For example, an individual performed very well and hard over the year, but due to some inevitable situations in the last few weeks, his performance level went down.
As a result, his supervisor gave him a bad rating on the basis of his last few weeks’ performances and ignored his eleven months of superior performance.
This is termed a recency error. If the manager maintains the record of his performance throughout the year, then recency error can be reduced to a large extent.
vi) Stereotyping: Stereotyping refers to making a general image regarding the characteristics (which is usually wrong) of members of a group. This hampers a manager’s ability to make correct decisions.
For example, Mahesh is an introvert but an excellent salesman, but his manager underrates his performance as compared to the other salespersons because he does not fit with them. The manager here ignored Mahesh’s performance due to stereotyping and made an inaccurate judgment.
vii) Contrast Effect: The contrast effect states that something which is drastically different (highest or lowest) will overstate the difference.
For example, in an interview, when there are huge numbers of job applications, distortion in the evaluation of any candidate may occur on the basis of the place of his application.
If his application is placed after a relatively weak candidate, it may immediately grasp the attention of the interviewer, whereas it may lose its charm if it is placed after a very strong candidate.
Another example of the contrast effect is that after rating an outstanding performer, the supervisor begins to rate a good performer.
But due to the contrasting effects, the supervisor will find significant differences in their performances, productivity, and aptitudes and hence will rate him as an average performer.
Therefore, the contrast effect plays a very negative role in the manager’s decision-making.
viii) Personal Bias: Sometimes, unfair evaluation occurs due to various reasons like personal beliefs, attitudes, assumptions, experiences, preferences, and deficiency of accepting any particular individual, class, or fact.
Everyone experiences such biasness while making day-to-day decisions about people, things, etc. Differentiating people on the basis of race, religion, age, sex, etc., and assuming that a particular person is not suitable for a specific job, is an example of personal bias.
If a manager believes that women are emotional and men are rational, then he will not select a female candidate for a job, which requires practical decisions.
Another assumption is that people believe that young workers are more efficient than aged workers. This may result in giving a lower efficiency rating to the older workers as compared to the young worker.
ix) Spillover/Past Performance Effect: It simply means the previous performance rating affects the current rating, irrationally.
For example, Vijay was awarded as a ‘star performer’ in the last year as he got the highest rating. This year his performance was not up to the mark even then, he was rated as a ‘star performer’ on the basis of the previous record.
x) Similar-to-Me Effect: It is in the nature of supervisors to give higher ratings to those employees whom they believe have qualities or qualifications similar to their own.
For example, those employees whose children go to the same school as that of their manager get a high-performance rating as compared to those employees whose children go to the other schools.
xi) Attribution Error: It is the inclination to determine the behavior of people according to personal factors while ignoring the situational factors.
For example, Manoj is a manager having both good and average employees in his team but he gives the credit of success to his own leadership quality and blames the bad attitude and laziness of employees for failure.
2. Poor Appraisal Forms: Various factors related to appraisal forms affect the entire appraisal process like:
- Ambiguous rating scale.
- Vital dimensions of job performance may be ignored by rating form.
- Various irrelevant performance dimensions are involved in rating forms.
- Forms may be lengthy and complicated.
3. Lack of Rater Awareness: It is possible that raters may not be properly skilled to execute performance management exercises.
Then, it becomes a great barrier for a rater having inadequate specialization in a particular area to assess the technical capabilities of a rate.
The raters may not have plenty of time to execute the j appraisals in an organized manner and to hold a proper review session.
At times, the raters may not be skilled enough to perform the assessments due to bad self-image and poor self-confidence. Appraisers may also get puzzled due to ambiguous objective appraisals.
4. Ineffective Organisational Policies and Practices: Raters get aj motivated if they do not get the correct appreciation for their evaluation.
Often, low ratings assigned by raters are taken by management as a negative sign of malfunction on the part of the rater or a signal of employee dissatisfaction.
Thus, most of the employees obtain good ratings, in spite of their poor performance. Generally, the rater’s immediate senior must appreciate the ratings. However, practically, it does not occur.
Consequently, the rater becomes upset and produces extensive harm to the rating process.
5. Inflationary Pressures: It is a particular case of low discrimination in the upper limit of the rating decisions. These pressures are regular in occurrence.
Due to the growing importance of equality principles and fear of revenge from unhappy employees, who did not receive good reviews, the appraisal process has become quite firm and lenient.
Harmful consequences from the appraisal process can be minimized by usual inflating or modifying appraisals.
Thus, inflating the assessments has created a tough situation for the organizations to defend their own actions while discharging an employee.