It is well known that the changing global scenario has impacted the performance appraisal structure in many ways. So, it becomes very important to confront the Realities of Performance Appraisal.

Currently, HR’s are having hard time bringing simplicity in the followed performance appraisal system. Like every individual, HR’s yearn to avoid complex systems. With the increase in competition and innovative ways of performance appraisal system adopted in different companies, it becomes difficult and challenging for HR’s to be in the race. To be specific, it is difficult to stick to simplicity.

Every organization has its own performance appraisal system. So, every employee should be well aware of the realities of performance appraisal, which plays a major role in the growth of his/her career.

So, let us discuss about certain realities of performance appraisal that can help!

• Budget is the driving force: Every employee is busy judging their performance and the compensation that they forget its connection with the budget fixed by the top management. The incentive, bonus, salary and so on are decided by the management as per the budget prepared. Employees cannot get compensation more than the budget fixed for the same purpose. It is decided well in advance as to how many employee should get the hike and how much. For ex: If the number of employees performing good are 5 but only 2 can be given hike as per the budget, then only 2 employees will get the benefit.

• The above average factor: It is very difficult to find people who accept that they are wrong or they deserve less as compared to others. This is true because everyone believes that they are above average and they deserve better. In small organizations, the performance is evaluated by the manager. But in large organizations, employees are given a chance of self-evaluate. This means that every employee is asked to rate their own performance and mention the reason for providing the grade/rate. After which the top level managers will have a personal discussion with the employees regarding the ratings. This is a good method, but not always true. Employees give a good rating for themselves thinking they have done a lot of activities as compared to others, but that need not be so!

• Relative in nature: We know very well that many factors are considered apart from budget to evaluate one’s performance. Factors such as determination, discipline, hardworking, speed, teamwork, good record etc. This shows how relative our performance appraisal system is. A very good example could be the sales quota fixed in organizations. The Salespersons are given incentives based on their achievement of sales target.

• Confusing for employees: You might be thinking why confusing, right? But, you see when there are so many factors involved in performance appraisal, employees tend to get confused as to where they should they concentrate. "Does the organization require quality or quantity, should I wait for opportunity to be handed over to me or should I go directly and ask for opportunities? Which of this is important to get appraisal?" So, it becomes really important for the employees to clarify the doubts from the concerned manager and get a feedback from them.

• Simplicity and purity is unattainable: How much ever we try to bring simplicity in the performance review, there still remains a gap. Every HR wants the appraisal to be simple and pure, but unfortunately it does not happen. This happens due to changing performance review systems. Thus there always remains a gap between the desires and implementation that results in increased frustration.

These are some of the realities of performance appraisal system that one needs to keep in mind!