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Performance Appraisal Advantages & Disadvantages

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Performance appraisals are an important tool for many businesses and organizations. They give supervisors an opportunity to evaluate employees and identify problem areas. Performance reports are useful in developing long-term business plans. However, despite the advantages to completing them, there are certain drawbacks that employees and supervisors should be aware of.


One of the advantages of a performance evaluation is the objectivity with which supervisors analyze employees. Most appraisals result in a numerical value for each worker, and this can be more useful in charting progress than infrequent, informal evaluations. These metrics also allow administrators to rank employees in terms of value in certain areas, so that decisions about promotions or layoffs won’t allow for personal relationships to lead to bad business decisions.


Performance reports give employees motivation, both in terms of working toward a better evaluation in the future and receiving tangible positive feedback for past accomplishments. Employees who work hard and see their appraisals improve may feel as though they are being recognized properly and will desire to continue to perform this way in the future.


Evaluations also have the advantage of providing an early warning to an employee whose performance falls short in certain areas. Before a worker’s productivity degrades to the point of threatening the job, a formal meeting about accomplishing work duties may point out problem areas and include suggestions for improvement.

Time Consumption

One of the disadvantages of performance evaluations is the fact that they are often very time consuming. Managers and supervisors spend a great deal of time completing the forms and meeting with employees to explain the results. These are hours, or sometimes days, that otherwise could be spent doing productive work, especially in the case of employees who are already performing to their potential and have less to gain from the evaluation process.

Office Dynamics

Performance evaluations may have a negative impact on office dynamics. While employees may be trained to work as a team, this can become difficult if an employee feels that there has been an unfair evaluation given. Negative reports may breed resentment among coworkers with lower evaluations or cause them to develop antagonism toward the supervisors who assessed their work.


Performance reports may cause employees to complete certain duties for the sole purpose of receiving a better evaluation rather than to contribute to the overall direction of the business. In order to have job security, workers may become overly concerned with improving in areas where they have scored poorly, even to the detriment of the areas in which they formally excelled.