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There are eight errors that we make in evaluating performance, each one is a disservice to the employee and the company. They are:

The Halo/Horn Effect - This may occur when an employee is extremely competent in one area and is therefore, rated high in all categories. Conversely, the horn effect happens when an overall poor rating is given because of one performance area that is below standard. Evaluate against each objective independently!

Primacy - This refers to our tendency to let our first impressions dominate our reaction to later experience and to pay less attention to later experience when forming judgements.

Recency - This error happens when an appraiser gives more weight to recent occurrences and discounts earlier performance during the appraisal period.

Bias - When an appraiser's personal values, beliefs or prejudices distort ratings, the error is due to bias.

Strictness - Appraisers who believe that standards are too low may inflate the standards in an effort to make them more meaningful in their eyes. So although the employees of a strict appraiser may be performing better than those working for another appraiser who does not inflate the standards, their ratings may be lower.

Leniency - Leniency errors are the result of appraisers who don't want to give low scores. All employees in this case are given high scores. Consequently, they are not motivated to learn anything from the process.

Central Tendency - This error happens when an appraiser rates all employees with a narrow range, regardless of differences in actual performance.

Contrast - The contrast error is committed when an employee's rating is based on how his or her performance compares to that of another employee instead of objective standards.

Performance appraisals are extremely important. They motivate by reinforcing desired behaviours, and they function as development plans by identifying training needs. Additionally, if there is a direct link to salary increases, the appraisal accuracy has a serious impact on the organization's business success. When conducting appraisals, look for signs that may indicate potential errors. Being accurate is being fair.