Advantages and Disadvantages of Performance Appraisal

Advantages and Disadvantages of Performance Appraisal

Advantages and Disadvantages of Performance Appraisal

Performance appraisal is the systematic evaluation of employees with respect to their performance on their job and their potential for development. It is the process of obtaining, analyzing, and recording information about the relative worth of an employee. So, a performance appraisal is an evaluation done on an employee’s job performance over a specific period of time. The focus of the performance appraisal is measuring and improving the actual performance of an employee and also the future potential of the employee. Its aim is to measure what an employee does.

Advantages of performance appraisals:                  

  • They provide a document of employee performance over a specific period of time.
  • They provide a structure where a manager can meet and discuss performance with an employee.
  • They allow a manager the opportunity to provide the employee with feedback about their performance and discuss how well the employee goals were accomplished.
  • They provide a structured process for an employee to clarify expectations and discuss issues with their manager.
  • They provide a structure for thinking through and planning the upcoming year and developing employee goals.
  • They can motivate employees is supported by a good merit increase and compensation system.

Disadvantages of performance appraisals:

  • If not done right, they can create a negative experience.
  • Performance appraisals are very time consuming and can be overwhelming to managers with many employees.
  • They are based on human assessment and are subject to rater errors and biases.
  • Can be a waste of time if not done appropriately.
  • They can create a very stressful environment for everyone involved.

Finally, performance appraisals are only as good as the performance management system it operates within. Organizations that only do performance appraisals for the sake of doing them are wasting their time

But organizations that incorporate performance appraisals into a comprehensive performance management system and use them to implement business goals have an advantage for accomplishing their goals and ultimately their strategic plan.


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