Performance Appraisals are conducted to evaluate employee performance, identify skill development needs and recognize valuable contribution of the top performers. Using a standard rating criterion in performance evaluation ensures fairness in the process.
Impact of Rating Patterns of Managers in Performance Appraisals
During performance reviews, every manager uniquely evaluates and scores employees on multiple performance parameters.
Rating patterns of managers varies from ‘strict’ to ‘lenient’ which create variations in appraisal scores of employees performing at same levels. This results in manager-biased ratings and unfair performance evaluation. Impact of score variation creates dissatisfaction in top performers or even sustains mediocrity in overall workforce productivity.
Let’s use an example to explain this.
There are two Professors in an institute. One professor evaluates minutely and scores strictly. In this class, the top scoring student gets 7 marks. The other professor, who is lenient, gives comparatively good marks to his students and the top scoring student gets 9 as his final grade.
Although the former is more intelligent, knowledgeable and a top performer, it is the latter who receives better grades. Low scores demotivate the first student.
Same situations are likely to arise in organizations where scoring patterns of managers differ. Unfair evaluations damage company rapport, as top performers feel that their efforts aren’t adequately recognized and rewarded. This also creates a rift between the managers and employees and encourages high rating irrespective of the performance.
Normalization is a technique used to balance the variability in appraisal scores and introduce fairness in the review process. Companies intend to normalize appraisal scores to remove manager oriented biases during performance appraisal cycles. This helps in providing greater objectivity in the process.
During appraisals, managers often rely on their memory to rate employees. Absence of a standardized process and yearly performance reports become the root causes of biased ratings.
Automation can surely support organizations to overcome performance appraisal challenges, maximize effectiveness of the appraisal process and conduct fair evaluation.
Companies looking forward to a change must own an online appraisal software, get yearly performance reports, continually track performance and gain better insights in employee performance. This would ensure higher degree of employee satisfaction and retention of top performers.