Skip to content

ACCA Applied Knowledge · Business and Technology · Review and appraisal of individual performance

A company ties annual pay rises directly to appraisal ratings and also uses the same appraisal meeting to discuss development needs. Which is the most likely resulting limitation?

Employees are likely to conceal weaknesses and training needs, because honest discussion could reduce their pay award. Mixing evaluative and developmental purposes in one meeting creates conflict, so open discussion about development suffers. Many organisations therefore separate the reward review from the development review.

  1. AEmployees may hide weaknesses and development needs because admitting them could reduce their pay awardCorrect
  2. BManagers will be unable to set objectives for the coming year
  3. CAppraisal ratings will become more objective because money is involved
  4. DThe appraisal will no longer be able to identify high performers

Explanation

Combining reward decisions with developmental discussion creates conflicting purposes. Employees become defensive and are unwilling to admit weaknesses, which undermines the development aim. Linking to pay does not make ratings more objective, and objectives can still be set.

Did you get it right without looking?

One question tells you little. A timed set on Review and appraisal of individual performance shows your real accuracy, how long you take and where you lose marks.

Practise Review and appraisal of individual performanceFree diagnostic mock

More Review and appraisal of individual performance questions