P0

Performance appraisal facilitates management in carrying out administrative decisions relating to promotions, firings, lay offs and pay increases.

P1
In most of the organizations/ departments rating scales are predominantly used for conducting performance appraisal of their employees. It is essential that human observer is free from the element of subjectivity & he should be reasonably objective and accurate in his assessment.

RP1

Traditional performance appraisal relies on economic reward and the threat of punishment to motivate employees to reach desired performance. But this concept does not hold true anymore. Today, performance appraisal is used for developmental and motivational purposes in the organizations.

RP2

RP3

For many organizations, the primary goal of an appraisal system is to improve individual and organizational performance. There may be other goals, however.To encourage good performance, a firm should design and implement a reliable performance appraisal system and then reward the most productive workers and teams accordingly.

Most compensation arrangements involve superiors subjective and hence non-contractible. judgements about employee performance. The necessity of SubJective performance evaluation raises issues of systematic bias in organizations.

RP4

RP4

RP5

Performance appraisal is a process designed to evaluate, manage and eventually improve employees performance. It should allow the employer and its employee to openly discuss expectations of the organization and the employees achievements especially for future development of the employe

P2
Research shows that raters memories are quite fallible and in most of the cases they resort to their own sets of liking and disliking, and expectations about people, expectations that may or may not be reasonable and tenable. These biases breed rating errors, ordeviation between the true rating an employee deserves & theactual rating assigned.The most common and influential errors in most of the private organiations include: Central Tendency,Hallo Effect,Rsuty Halo Effect,Personal Biases ,Unclear Standards and the lack of feedback.

P3
Almost in 39% of the organisation,employees expressed that they undergo fair amount of stress due to biased attitude displayed by their Reporting Officers while evaluating their subordinate employees performance.

In practice, there are many possible errors or biases in the performance appraisal process. . The most common errors that affect the objectinity of the appraisal in organisations include:The Halo Effect and HornEffect,Leniency & Strictness Error; The Central Tendency Error; The Recency Effect;The Contrast Error;The Similarity Error.

The labor union is another external factor that might affect a firms appraisal process. Unions have traditionally stressed seniority as the basis for promotions and pay increases. They may vigorously oppose the use of a management-designed performance appraisal system used for these purposes.

Supervisors preferences and their relationship with subordinates can affect appraisals and rewards even in the absence of personal bias. There is substantial evidence that supervisors have preferences about the distribution of rewards among subordinates. In many cases supervisors are reluctant to give poor ratings to subordinates. either because doing so is unpleasant or because supervisors prefer equity in outcomes. For example. when supervisors at Merck and Co. had discretion over the full distribution of appraisals there was a marked tendency toward uniformity in reported performance and, consequently, wages [Murphy (1991)]. This compression of rewards reduced incentives and aggregate productivity.

Bias can cause inefficiencies on a number of dimensions. Employees who feel discriminated against may quit, with resulting turnover costs and lost human capital for the organization.

If employee beliefs that the supervisor is dishonest may result in lower future effort or a high propensity to quit. There are also cases when the supervisor observes the performance of the worker being less than he had anticipated. It could be that the supervisors signal of performance underestimates the workers true performance. If the supervisor reports his observation honestly, then the worker may believe that the supervisor is biased and supply less effort in the future. Findings from the Pearson correlation show that performance appraisal politic elements which are motivational motive and punishment motive have a positive relationship with employee turnover intention. The results obtained is in line with June (2004), which stated that when ratings are influenced by motivation motive such as rewarding or other recognition, it will lead to higher job satisfaction and decrease turnover intention. The employees have the tendency and intention to quit from their job if their performance were rated based on some ulterior motives.

P4 Approximately in 31% of the private sector organisations,Performance Appraisers (Reporting Officers)appraise employees performance in quantitative terms only,turning blind eye to the quality aspect altogether.

P5
Mary Kay Ash, presented an interesting and enlightened people approach of management. Treat people fairly but according to merit. Make the other person feel important, and let people know you appreciate them & recognize their professional worth.Encourage feedback and dont undervalue the ability to listen.Sandwich every bit of constructive criticism b/w two layers of heavy praise.

As reported in a study (Pulakos, 2004), only ten percent of the employees believe that their firms performance appraisal help them to improve performance. Appraisal errors, lack of objectivity and nonperformance variables such as age, sex and race cause difficulties in the appraisal process. It has been known that appraisal errors can harm perceptions of pay system fair-ness by confusing the relationship between true performance differences (Miceli and et al.,1991). Huber, (1983), Kane and et al. (1995) also found that appraisal errors can undermine the potential beneficial of merit appraisals on employee motivation. Ndambakuwa and Mufunda (2006) revealed the impact of performance appraisal system on the productivity and job satisfaction. Subjective performance evaluation is an important informational tool for the firm.It allows employers to determine compensation and provide feedback when objective measures are costly, inaccurate or unavailable (Baker et al 1994, Prendergast 1999, Murphy 1999).

Managers do not like giving performance appraisals and employees do not like receiving them.Infact, in one survey, almost 80 percent of workers stated dissatisfaction with their PA process.

A potential weakness of traditional performance appraisal methods is that they lack objectivity. In the rating scales method, for example, commonly used factors such as attitude, appearance, and personality are difficult to measure. In addition, these factors may have little to do with an employees job performance.

Subjectivity is central to performance appraisal in most organizations.We believe that subjective performance evaluation is a central, but understudied, factor in incentive and organizational design.

Study shows that there is a relationship between performance appraisal politics and employee turnover intention. The findings also show that performance appraisal politics elements do affect employee turnover intention where punishment motive was the best predictor which could have effects on employee turnover intention. This study helps the human resource managers to decide the most appropriate way to conduct a good appraisal practices that administered based on justice principles. Managers can also identify potential factors which may affect the level of job satisfaction among employees and subsequently influence their intention to quit.

P6
Laurie J. Mullins substantiate the necessity of an effective appraisal scheme by saying that it can identify an individuals strengths and weaknesses and indicate how such strengths may best be utilized and weaknesses overcome. There are two key reasons why every or-ganization should give performance reviews: (Performance Appraisal, 2006). Performance appraisals help employees become better employees by providing feed back about their weaknesses and strengths and can protect organizations against legal cases when countering to claims of illegal activities.

P7

P8
Almost in 43% of the organiastions Reporting Officers adopt authoritarian or dictatorial approach while evaluating employees performance and resort to reprimands and punishments in case of failure of the employees to accomplish the targets.

The most important reason for wide variety of errors or biases in the system might be due to the method of appraisal; like superior rate only system.

An employees immediate supervisor has traditionally been the most logical choice for evaluating performance and this continues to be the case. The supervisor is usually in an excellent.On the negative side, the immediate supervisor may emphasize certain aspects of employee performance and neglect others. position to observe the employees job performance and the supervisor has the responsibility for managing a particular unit.

P9
The manager should place emphasis on end results and level of actual performance and achievement, rather than on compliance with detailed instructions, rules and regulations.Managerial / Leadership styles have a profound impact on performance appraisal ratings given by the evaluators to the subordinate employees.

Research shows that raters memories are quite fallible and in most of the cases they resort to their own sets of liking and disliking, and expectations about people, expectations that may or may not be reasonable and tenable. These biases breed rating errors, ordeviation between the true rating an employee deserves & theactual rating assigned.The most common and influential errors in most of the private organiations include: Central Tendency,Hallo Effect,Rsuty Halo Effect,Personal Biases ,Unclear Standards and the lack of feedback.

PA has Memory is quite fallable prone to likes and dislikes unjustifiable and untenable expectations

results in errors overdeviation b/w true and actual rating central tendency halo effect rusty halo effect personal biases unclear standards lack of feedback

In practice, there are many possible errors or biases in the performance appraisal process. . The most common errors that affect the objectinity of the appraisal in organisations include:The Halo Effect and HornEffect,Leniency & Strictness Error; The Central Tendency Error; The Recency Effect;The Contrast Error;The Similarity Error.

central tendency halo effect horn effect leniency and strictness error recency effect contrast error similarity eroor