Using the appraisal system for compensation decisions rather than developmental purposes may affect how the rater evaluates the employee.

Question

Quizplus · Accepted Answer

If the appraisal system is used for compensation decisions, the rater may be inclined to give a higher or lower rating than the employee actually deserves in order to justify a particular salary increase or bonus. This can compromise the accuracy and fairness of the appraisal process.

Using the Appraisal System for Compensation Decisions Rather Than Developmental