Rating Errors in Performance Appraisals
Organizational performance is dependent on individual
performances of the employees. Due to biasness or some rating errors, employees
get inaccurate ratings in their performance evaluations. Types of
errors/effects and biasness are described in detail in the below. Minimizing
the errors will bring employee satisfaction, motivation to work as well as the
performance improvement (Javidmehr and Ebrahimpour, 2015)
- Strictness or Leniency
Depending on the rater, employees might get lower rating or a
higher rating than the deserved rating. The superior employees will get
affected due to strictness as they are getting a lower rating than the
expected. Due to leniency, all the subordinates will get a higher rating than
the expected but consequently superior subordinates might get demotivated. The
Forced distribution like grading on a curve, or modern appraisal techniques can
be used to minimize the Strictness-Leniency bias as those techniques are result
oriented and absolute standards (Lunenburg, 2012).
- Central Tendency
Some of the raters tend to rate all subordinates in average range
though the actual is in an extreme point. According to Boachie-Mensah and Seidu
(2012), there could be 2 main reasons.
i. Insufficient data on
employee performances. So, to reduce the risk of wrong judgement.
ii. The rater’s attitude on
performance appraisals. If the rater believes like it’s waste of time, then all
the subordinates would be ranked in the average range
Figure
1 illustrates ratings distribution with Strictness, Central Tendency and
Leniency bias.
Figure
1: Strictness, central tendency, and leniency performance ratings
(Source:
Lunenburg, 2012)
- Halo Effect and Horn Effect
A single exceptionally good or undesirably bad dimension/trait of
an employee makes the supervisor to rank other dimensions also in the same
range (Lunenburg, 2012). As an example, if one subordinate has very good
communication skills, then the supervisor tends to give higher ranking for all
dimensions including management, leadership and team working. This positive
effect is named as the ‘Halo Effect’. Conversely, if someone has taken considerable
number of leaves, then the supervisor might rank him in a lower level in all
the dimensions. This negative effect is named as ‘Horn Effect’. Halo and Horn
effects are very common among the supervisors but difficult to correct due to
the human nature (Javidmehr and Ebrahimpour, 2015).
In
his research Feeley (2002) has identified 3 conceptual models of halo errors.
i. General impression model
ii. Salient dimension model
iii. Inadequate discrimination
model
The
rater experience with ratees, rater trainings and crossed research designs will
support to minimize the Halo Effect (Feeley, 2002).
- Recency of Events
Usually, a performance evaluation is done annually or bi-annually
with the data collected throughout the evaluation period. But supervisor might
get influenced by the recent performances to rank a subordinate without much
considering the early performances (Lunenburg, 2012).
- Contrast Error
The contrast error occurs when the subordinates are compared to
each other. The one who is in the bottom might have exceeded the company
standards, but supervisor ranks him in a lower level due to the contrast error.
The contrast error can be minimized by setting carefully defined set of goals
or standards (Javidmehr and Ebrahimpour, 2015).
- Proximity Error
The supervisors tend to continue the same higher or lower ranking
of a trait/dimension for the next item in the list also. So, depending on the
order of traits/dimensions, same rater might rank same subordinate in different
ranking levels due to proximity error (Javidmehr and Ebrahimpour, 2015).
- Spill-over Effect or Past-record Anchoring
The supervisors tend to rank the subordinates with reference to
the previous year ranking though the current performance is very much
controversial to the previous year (Javidmehr and Ebrahimpour,
2015). For an example if an employee has got a level 2 (Need to
improve) last year, supervisor won’t assign a Level 4 or 5 in the current year
even if he has outstanding performances. Conversely a last year Level 5 (Outstanding
Performance) person won’t get a Level 1 (Unacceptable performance) in the
current year even if the performance is unacceptable.
- Personal Bias
According to Javidmehr and Ebrahimpour (2015), eighty percent of
managers have confirmed that performance evaluations might get affected by the
purview of the manager about the subordinate. Personal favor or disfavor may
occur due to various reasons including the personal faith, employee
relationship, information through the colleagues, behaviors of the employee, or
may be due to demographical factors like race, age, gender, education,
ethnicity. Due to personal biasness, the subordinates will get a higher or
lower ranking than the deserved.
- Rater Attitudes and Values
The value system as well as the attitudes of a supervisor will
directly affect the performance evaluation of a subordinate. For an example, if
there is no any benefit for the company but only a demotivation for an
employee, then the supervisor will have a negative attitude in accurate ranking
of the employee (Javidmehr and Ebrahimpour, 2015). In a multinational company
both the appraisers and appraisees must deal with different value systems and
cultures in different countries. For an example, Chinese appraisers will not communicate
negative feedback to appraisees (Appelbaum, Roy and Gilliland, 2011).
- Fame
Some of the employees pretend to be key workers in the employee
groups but neglect the responsibilities and performances might be poor.
However, they have managed to create a positive image about them within the
group. This fame influences the supervisor to provide them a higher ranking
(Javidmehr and Ebrahimpour, 2015).
- Employee Appearance
According to Javidmehr and Ebrahimpour (2015), personal appearance
of the subordinates influences the performance evaluations and salary
increases.
- Discrimination between insider and outsider Employees
The supervisors trust the insider group members so that assign
important and major tasks for them, consequently they get better rankings even
without better performance than the outsider group members (Javidmehr and
Ebrahimpour, 2015).
The Halo Effect, Leniency, Central Tendency & Recency of
Events are the major error types in performance evaluations. Accuracy and
reliability of a performance evaluation can be affected by all the types of
above errors. Errors can be minimized by using absolute standards and result
oriented appraisal approaches. Further the research done by Curtis, Harvey and
Ravden (2005) reveal that appraisal accuracy depends on the ‘accountability of
the rater’ and ‘purpose of the appraisal’.
References.
- Appelbaum, S.H., Roy, M. and Gilliland, T., 2011. Globalization of performance appraisals: theory and applications. Management Decision.
- Boachie-Mensah, F.O. and Seidu, P.A., 2012. Employees' perception of performance appraisal system: A case study. International journal of business and management, 7(2), p.73.
- Curtis, A.B., Harvey, R.D. and Ravden, D., 2005. Sources of political distortions in performance appraisals: Appraisal purpose and rater accountability. Group & Organization Management, 30(1), pp.42-60.
- Feeley, T.H., 2002. Comment on halo effects in rating and evaluation research. Human Communication Research, 28(4), pp.578-586.
- Javidmehr, M. and Ebrahimpour, M., 2015. Performance appraisal bias and errors: The influences and consequences. International Journal of Organizational Leadership, 4, pp.286-302.
- Lunenburg, F.C., 2012. Performance appraisal: Methods and rating errors. International journal of scholarly academic intellectual diversity, 14(1), pp.1-9.
Their outer appearance can define an employee's personality at work.
ReplyDeleteHow an employee dresses at work, hair style, mode of speech, body arts and even facial expressions may be critical for their appraisal process. Employees can be discriminated based on their appearance by the managers. On the other hand, a manager can develop a good picture in his mind based on an employee's presentability or noble look with humbleness and manners (Sultana, 2022).
Javidmehr and Ebrahimpour (2015) also confirms the same. Personal appearance of the subordinates influences the performance evaluations and salary increases.
DeleteHi Dulshan, based on what you have explained it can be summarized that when conducting performance reviews, managers must be careful to avoid rating errors. Four of the most common rating errors are strictness or leniency, central tendency, halo effect and recency of events (Deblieux, 2003; Rothwell, 2012).
ReplyDeleteYes Reshan. I agree with you. The managers should be very careful. Further managers should be trained properly. The traditional methods of performance appraisals are mostly dependent on the purview of the manager. In contrast to the Traditional methods of performance appraisals, Modern performance appraisal methods have been developed to mitigate the shortcomings such as bias and subjectivity (Aggarwal and Thakur, 2013).
DeleteGreat explanation on the errors. when the businesses practice performance assessment poorly, rater may make significant amount of errors, which affect on objectivity of performance appraisal at first hand and performance of the organization, which positively impact on employee dissatisfaction and negatively impact on organizational performance (Soomro et al., 2018).
ReplyDeleteThanks Nimshi for your appreciation. According to Bacal (2004) and Grubb (2007), there are drawbacks and hidden damages in the performance appraisal process especially when it is ineffective.
Delete1. The cost of performance appraisal
2. Employee intrapersonal conflict, employee-employee conflict, employee-supervisor conflict, supervisor-leadership conflict, employee-organizational conflict, supervisor-organizational conflict.
3. Managers lose the credibility by conducting ineffective performance reviews.
4. Time and resource wastage.
5. Adversely affect the HR functions like talent management
well explained dulshan , Another important fact that is well documented is most of the resignation is happening due to employees being dissatisfied with their "Manager" to overcome this organization consider spending more time and effort to develop leaders that are aligned with goals, culture, and employee investments. The new era of the industry has a young and energetic workforce that seeks autonomy in decision-making and increases responsibility and accountability(Kelleher, 2013).
ReplyDeleteThanks Neel for commenting. Total Rewards concept had been developed since early 1990s, but a Total Rewards Model was first unveiled in the year 2006. The model had 5 reward types including compensation, benefits, work life balance, performance and recognition, and development and career opportunities (Diankenda, 2015).
Delete