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

A manager completes annual appraisals in December and bases them largely on a major error made by an employee in November, ignoring good work earlier in the year. Which would best reduce this problem?

Keeping regular written records of performance throughout the year is the best remedy. The problem is the recency effect, where recent events dominate. Ongoing documentation lets the appraiser assess the whole period, whereas forced distribution targets rating clustering and self-appraisal alone does not correct the appraiser's memory.

  1. AKeeping regular written records of performance throughout the yearCorrect
  2. BUsing a forced distribution of ratings across the team
  3. CHaving the employee complete a self-appraisal form only

Explanation

This is the recency effect. Recording performance evidence continuously gives the appraiser a full-year picture. Forced distribution addresses leniency or central tendency, and self-appraisal alone adds the employee's view but does not fix the appraiser's memory bias.

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