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1. Performance appraisal factors
In this file, you can ref useful information about performance appraisal factors such as
performance appraisal factors methods, performance appraisal factors tips, performance
appraisal factors forms, performance appraisal factors phrases … If you need more assistant for
performance appraisal factors, please leave your comment at the end of file.
Other useful material for you:
• performanceappraisal123.com/1125-free-performance-review-phrases
• performanceappraisal123.com/free-28-performance-appraisal-forms
• performanceappraisal123.com/free-ebook-11-methods-for-performance-appraisal
I. Contents of getting performance appraisal factors
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Important factors that can distort performance appraisal are given below:
1. Leniency error
Each evaluator has his own value system which acts as a standard against which appraisals are
made. Relative to the true performance an individual exhibits, some evaluators mark high and
others low.
Performance appraisals
The former is referred to as positive leniency error and the latter as negative leniency error.
When evaluators are positively lenient in their appraisal an individual’s performance is
overstated while in the opposite case leniency error understates performance.
If all individuals in an organisation were appraised by the same person, there would be no
problem. The difficulty arises when we have different raters with different leniency errors
making judgments.
2. Halo error
Halo error or halo effect is a tendency to rate high or low on all factors due to the impression of a
high or low rating on some specific factor. As an example, if an employee tends to be

2. dependable, we might become biased towards him to the extent that we will rate him high on
many desirable attributes.
3. Similarity error
When evaluators rate other people in the same way that the evaluators perceive themselves, they
are making a similarity error. Due to this perception that evaluators have of themselves, they
project those perceptions onto others.
For example, the evaluator who perceives himself as aggressive may evaluate others by looking
for aggressiveness. Those who demonstrate this characteristic tend to benefit, while others are
penalised.
4. Low appraiser motivation
If the evaluator knows that a poor appraisal could hurt the employee’s future, say, opportunities
for promotion, the evaluator may be reluctant to give a realistic appraisal.
5. Central tendency
Raters who are prone to the central tendency error are those who continually rate all employees
as average. For example, if a manager rates all subordinates as 2 on a scale of 1 to 4 then no
differentiation among the subordinates exists. Failures to rate subordinates as 4, for those who
deserve that rating, will only create problems if this information is used for pay increase.
6. Inappropriate substitutes for performance
In many jobs it is difficult to get consensus on what is a good job and it is still more difficult to
get agreement on what criteria will determine performance. For a salesman the criterion may be
the money value of sales in his territory but even this criterion is affected by factors beyond the
salesman’s control, such as action of competitors.
As a result, the appraisal is frequently made by using substitutes for performance, such as criteria
that closely approximate performance and act in its place. Many of these substitutes are well
chosen and give a good approximation of actual performance.
However, the substitutes chosen are not always appropriate. Organisations use criteria such as
enthusiasm, conscientiousness and a positive attitude as substitutes for performance.

3. In some jobs one or more of the criteria listed above are part of performance. Enthusiasm does
enhance the effectiveness of a teacher. But enthusiasm may not be relevant to effective
performance for many accountants or watch repairers. So what may be an appropriate substitute
for performance in one job may be totally inappropriate in another.
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III. Performance appraisal methods
1.Ranking Method
The ranking system requires the rater to rank his
subordinates on overall performance. This consists in
simply putting a man in a rank order. Under this method,
the ranking of an employee in a work group is done
against that of another employee. The relative position of
each employee is tested in terms of his numerical rank. It
may also be done by ranking a person on his job
performance against another member of the competitive
group.
Advantages of Ranking Method
i. Employees are ranked according to their performance
levels.
ii. It is easier to rank the best and the worst employee.
Limitations of Ranking Method
i. The “whole man” is compared with another “whole man”
in this method. In practice, it is very difficult to compare
individuals possessing various individual traits.
ii. This method speaks only of the position where an
employee stands in his group. It does not test anything
about how much better or how much worse an employee
is when compared to another employee.
iii. When a large number of employees are working, ranking
of individuals become a difficult issue.
iv. There is no systematic procedure for ranking individuals
in the organization. The ranking system does not eliminate
the possibility of snap judgements.
2. Rating Scale

4. Rating scales consists of several numerical scales
representing job related performance criterions such as
dependability, initiative, output, attendance, attitude etc.
Each scales ranges from excellent to poor. The total
numerical scores are computed and final conclusions are
derived. Advantages – Adaptability, easy to use, low cost,
every type of job can be evaluated, large number of
employees covered, no formal training required.
Disadvantages – Rater’s biases
3. Checklist method
Under this method, checklist of statements of traits of
employee in the form of Yes or No based questions is
prepared. Here the rater only does the reporting or
checking and HR department does the actual evaluation.
Advantages – economy, ease of administration, limited
training required, standardization. Disadvantages – Raters
biases, use of improper weighs by HR, does not allow
rater to give relative ratings
4. Critical Incidents Method
The approach is focused on certain critical behaviors of
employee that makes all the difference in the
performance. Supervisors as and when they occur record
such incidents. Advantages – Evaluations are based on
actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases,
chances of subordinate improvement are high.
Disadvantages – Negative incidents can be prioritized,
forgetting incidents, overly close supervision; feedback
may be too much and may appear to be punishment.

5. 5. Essay Method
In this method the rater writes down the employee
description in detail within a number of broad categories
like, overall impression of performance, promoteability
of employee, existing capabilities and qualifications of
performing jobs, strengths and weaknesses and training
needs of the employee. Advantage – It is extremely
useful in filing information gaps about the employees
that often occur in a better-structured checklist.
Disadvantages – It its highly dependent upon the writing
skills of rater and most of them are not good writers.
They may get confused success depends on the memory
power of raters.
6. Behaviorally Anchored Rating Scales
statements of effective and ineffective behaviors
determine the points. They are said to be
behaviorally anchored. The rater is supposed to
say, which behavior describes the employee
performance. Advantages – helps overcome rating
errors. Disadvantages – Suffers from distortions
inherent in most rating techniques.
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