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Performance appraisal is probably the most misused and abused management tool in history. When asked, the majority of human resource managers will swear blind that it is their most important device for reviewing members of the team. The reality is that, on the whole, managers, supervisors, and employees hate the thoughts of them and they rarely get done. Human resource professionals spend a lot of time whipping people into doing them, while managers look for a variety of reasons to delay the process.
The reason for this is that it’s often an uncomfortable practice to carry out, people undertake performance appraisal for the wrong reasons and from the wrong perspective. This can end up putting the manager and the employee on different “sides”. Appraisals are used for determining pay increases, who gets let go, who gets promoted. Most commonly, they are used to focus on what people have done wrong.
So what is the real point of performance appraisals? Generally, the aim of the practice is to:
• Give feedback on performance to employees.
• Identify employee training needs.
• Document criteria used to allocate organizational rewards.
• Form a basis for personnel decisions: salary increases, promotions, disciplinary actions, etc.
• Provide the opportunity for organizational diagnosis and development.
• Facilitate communication between employee and administrator.
• Validate selection techniques and human resource policies to meet federal Equal Employment Opportunity requirements
The most important purpose or goal of the appraisal is to improve performance in the future, in both employees and team leaders. Managers can get valuable information from staff to help them make their jobs more productive. Through feedback given in performance appraisals work units can identify problems that interfere with everyone’s, and take steps to rectify them. If there is a shift from affixing blame to identifying barriers to performance the fear and  dread associated with appraisals will be removed.
When managers put away the “blaming stick” in appraisals and move to a cooperative, dialogue approach, the whole process can become more comfortable and effective. Because, it puts the manager and employee on the same side, and working towards the same goals, getting better and better.
Performance appraisals are always awkward for everyone. While managers make an effort to be as objective as possible, there are always concerns about specific performance appraisals, and their accuracy. When you’re evaluating your staff it’s wise to be aware of factors that may affect your assessments. Here are a few factors you should be aware of, so that you can examine your own assessment processes to ensure that they are as free from bias as possible.

Generalising
Generalising, or the halo effect, is the tendency to rate someone high or low in all categories, based on their performance in other areas. Results of performance appraisals, where generalising occurs, do not help develop employees because they are inaccurate and unspecific to their entire performance.
Different Standards of Evaluation
Evaluation terms such as fair, good, excellent, etc, are commonly used in performance appraisals, yet managers should be aware that the meaning of these words will differ from person to person. In any case, the use of these categories is not recommended; they are just too unspecific and do little to provide sufficient information to evaluate individuals and help them develop.
Current and Lenient Bias
Current bias is the tendency to assess people based on their most recent performance and to ignore previous behaviour. Leniency bias occurs when the employee gets rated higher than warranted, this is usually accompanied by rationalization as to why this is appropriate.
Opportunity Bias
This occurs as a result of ignoring the notion that factors beyond the control of the employee may either restrict or facilitate their performance. In the case of opportunity bias, credit or blame is given to the employee when the true cause of the performance was opportunity.
False Attribution Errors
There is often a tendency, in performance appraisal, to attribute success or failure to individual effort and ability. So when someone does well, we give them credit, and when someone does less well, we suggest it’s somehow their fault. While there is some truth in this, the reality is that performance is a function of both the individual and the system he or she works in. If both factors are not taken into account, it will be increasingly difficult to improve on performance.
Although performance appraisals are commonly dreaded throughout the company, from team leader to employee, they are a necessary tool in ensuring development. If conducted fairly and appropriately the information gathered can be used to vastly improve the performance of the entire team.
Source: http://www.articlecircle.com
About the Author
Sheila Mulrennan from Professionaldevelopment.ie specialises in writing articles relating to Personal Development Training, Communication Skills, Presentation Skills and Performance Appraisals. Visit her website at www.Professionaldevelopment.ie for more.