Editing Performance appraisal (section)

===Potential complications===

Despite all the potential advantages of formal performance appraisals (PAs), there are also potential drawbacks. It has been noted that determining the relationship between individual job performance and organizational performance can be a difficult task.<ref name="Twomey"/> The ones conducting performance appraisals, such as line managers also often face complexities.<ref name="Tyskbo 2020 Line management involvement"/> Generally, there are two overarching problems from which several complications spawn. One of the problems with formal PAs is there can be detrimental effects to the organization(s) involved if the appraisals are not used appropriately.  The second problem with formal PAs is they can be ineffective if the PA system does not correspond with the [[organizational culture]] and system.<ref name="Schraeder"/>

Potential complications that may arise:
*Detrimental impact to performance improvement: It has been proposed that the use of PA systems in organizations adversely affects organizations' pursuits of quality performance.<ref name="Soltani">{{cite journal |last1=Soltani |first1=Ebrahim |title=Conflict between theory and practice: TQM and performance appraisal |journal=International Journal of Quality & Reliability Management |date=October 2005 |volume=22 |issue=8 |pages=796–818 |doi=10.1108/02656710510617238 }}</ref> It is believed by some scholars and practitioners that the use of PAs is unnecessary if there is [[total quality management]].<ref name="Kikoski"/>
*Subjective evaluations: Subjectivity is related to judgement based on a supervisor's subjective impressions and opinions, which can be expressed through the use of subjective performance measures, ''ex post'' flexibility in the weighting of objective performance measures, or ''ex post'' discretional adjustment, all of which are based on factors other than performance measures specified ''ex ante''. Traditional performance appraisals are often based upon a manager's or supervisor's perceptions of an employee's performance and employees are evaluated subjectively rather than objectively. Therefore, the review may be influenced by many non-performance factors such as employee 'likeability', personal prejudices, ease of management, and previous mistakes or successes. Reviews should instead be based on data-supported, measurable behaviors and results within the performers control.<ref>{{cite report |last1=Daniels |first1=Aubrey C. |authorlink1=Aubrey Daniels |title=Designing a Compensation Program That Motivates and Produces a Profit-Driven Workplace |url=https://www.aubreydaniels.com/media-center/organizational-solutions/articles/designing-a-compensation-program }}{{self-published inline|date=September 2024}}</ref>
*Negative perceptions: "Quite often, individuals have negative perceptions of PAs".<ref name="Pettijohn"/> Receiving, or the anticipation of receiving, a PA can be uncomfortable and distressful<ref name="Spinks"/> and potentially cause "tension between supervisors and subordinates".<ref name="Jenks"/> If the person being appraised does not trust their employer, appraiser or believe that they will benefit from the process it may become a "tick box" exercise.<ref>{{cite journal |last1=McGivern |first1=Gerry |last2=Ferlie |first2=Ewan |title=Playing tick-box games: Interrelating defences in professional appraisal |journal=Human Relations |date=September 2007 |volume=60 |issue=9 |pages=1361–1385 |doi=10.1177/0018726707082851 }}</ref>
*Central tendency: This is where the evaluator fails to make extreme ratings to either direction-low or high but remains at the intermediate. The evaluator fails to use extremes of the scale and uses the central points e.g. rating all employees as average.<ref>{{Cite web |last=Team |first=MBA Skool |title=Central Tendency – Meaning & Definition |url=https://www.mbaskool.com/business-concepts/human-resources-hr-terms/15102-central-tendency.html |access-date=2022-10-05 |website=MBA Skool |language=en-gb}}</ref>
*Inflationary pressure: This is where there is low differentiation with the upper range of the rating choices defining outstanding performance as 90 or above good as 90 or above, average or above 70 or above and inadequate performance as anything below 70 leaves one wonder for a promotion.<ref>{{Cite web |date=12 July 2022 |title=What Is Inflation Rating Performance Appraisal? |url=https://questionanswer.io/what-is-inflation-rating-performance-appraisal/ |website=QuestionAnswer.io |archive-url=https://web.archive.org/web/20221005153942/https://questionanswer.io/what-is-inflation-rating-performance-appraisal/ |archive-date=5 October 2022 }}{{self-published inline|date=September 2024}}</ref> 
*Errors: Performance appraisals should provide accurate and relevant ratings of an employee's performance as compared to pre-established criteria/goals (i.e. organizational expectations).<ref name="Amsterdam">{{cite journal |last1=Amsterdam |first1=Christina E. |last2=Johnson |first2=Robert L. |last3=Monrad |first3=Diane M. |last4=Tonnsen |first4=Sandra L. |title=A Collaborative Approach to the Development and Validation of a Principal Evaluation System: A Case Study |journal=Journal of Personnel Evaluation in Education |date=September 2003 |volume=17 |issue=3 |pages=221–242 |doi=10.1007/s11092-005-2981-y }}</ref> Nevertheless, supervisors will sometimes rate employees more favorably than that of their true performance in order to please the employees and avoid conflict.<ref name="Schraeder"/>  "Inflated ratings are a common malady associated with formal" PA.<ref name="Martin">{{cite journal |last1=Martin |first1=David C. |last2=Bartol |first2=Kathryn M. |title=Performance Appraisal: Maintaining System Effectiveness |journal=Public Personnel Management |date=June 1998 |volume=27 |issue=2 |pages=223–230 |doi=10.1177/009102609802700208 }}</ref>
*Legal issues: When PAs are not carried out appropriately, legal issues could result that place the organization at risk.<ref name="Jenks"/> PAs are used in organizational disciplinary programs<ref name="Spinks"/> as well as for promotional decisions within the organization.<ref name="Schraeder"/> The improper application and utilization of PAs can affect employees negatively and lead to legal action against the organization.
*Performance goals: Performance goals and PA systems are often used in association. Negative outcomes concerning the organizations can result when goals are overly challenging or overemphasized to the extent of affecting ethics, legal requirements, or quality.<ref name="Schweitzer">{{cite journal |last1=Schweitzer |first1=Maurice E. |last2=Ordóñez |first2=Lisa |last3=Douma |first3=Bambi |title=Goal Setting as a Motivator of Unethical Behavior |journal=The Academy of Management Journal |date=2004 |volume=47 |issue=3 |pages=422–432 |jstor=20159591 }}</ref> Moreover, challenging performance goals can impede an employee's abilities to acquire necessary knowledge and skills.<ref name="Kanfer"/> Especially in the early stages of training, it would be more beneficial to instruct employees on outcome goals than on performance goals.<ref name="Schraeder"/>
*Derail merit pay or performance-based pay: Some researchers contend that the deficit in merit pay and performance-based pay is linked to the fundamental issues stemming from PA systems.<ref name="Selden"/>