The limitations of Performance Appraisal are somehow inherent to the Employee Performance Management System and exist probably due to the fact that performance appraisals are conducted by and on fellow 'humans'. Some of these limitations are as listed below:
- Though appraisal is supposed to be for the entire year, it's generally the last few weeks which really matter. For understanding this, try to remember what activities you yourself performed in Q1 of this year, think about how easy or difficult it is going to be when you do this for others.
- The nature of work an employee performs opens up or restricts the challenges/opportunities available to him/her. For understanding this, compare the role of a Training Coordinator with the role of an Engineer working on developing a new product in relation to challenges/opportunities available to both.
- Bosses do have their favorites. And it's not always the most competent team member who gets to back-fill the boss in his/her absence. Personal equation and trust matter a not. Also, for the crucial tasks and assignments, bosses have their favorites. What is there to stop this bias from creeping into the performance appraisal process?
- Perception matters more than reality. All of us tend to type-cast or label other persons. Perceptions created initially tend to carry on and on. And many times perceptions are created but are never indicated or communicated to the concerned person. This could come as a surprise if one is at the receiving end. Do you remember something like, "Oh! I never thought my supervisor thinks that I don't update him on what's going on and that he wanted a weekly status report... I thought he did not want too many e-mails and anyways all important e-mails were always forwarded to him, besides I have called him every time there was need and he seemed to be okay with all this"
- What people think and say or write may be different or could be understood differently. Many times what one wants from others are not clearly articulated. And many times the way one understands a statment may be different than what it is supposed to mean.
- People have emotions. And even emotionally mature people tend to experience changing moods. Due to what happens to them outside the workplace, due to the way they have been brought up, due to personal beliefs and values, and due to the fact that everyone is unique in their own ways, how a person assesses a situation is generally different than how others will assess it. This difference in assessing situations carries itself to performance appraisals also.
There are many more limitations but the fact is some kind of Employee Performance Management System is here to stay albeit its limitations and weaknesses. Simply because, there seems to be no better alternative - after all something is better than nothing!