Limitation of Performance Appraisal
By Arshi Naim
Limitations of Performance Appraisal
??????????? Performance is a relative term., It can be judged by comparing the data of different companies or industries or different years of the, same company. Since business conditions vary too much from company to company and from industry to industry, no attempt to assess business performance alexei ramirez embroidered jersey can provide firm results. Differences exist in location, products and services capital structure, calibre of management, to name but a few. Further complications have been added by the advent of multi-product and multi-business companies. On account of these differences, performance appraisal of a business becomes
??????????? "The success of an investment depends ultimately upon future developments, and the future may never be analysed with accuracy. But if you have precise information as to a company's present financial position and its past earning records you are better equipped to gauge its future possibilities51.
??????????? Whi1e appraising the business performance, the analyst must keep in mind that he is assessing the past performance by using historical data and yet he has to give his estimates and suggestions about the future. In this connection, Erich A. Helfert very rightly said, "The analyst must further realise that an assessment of performance deals with past data and conditions, from which it may be difficult to extrapolate future expectations. Yet, it is the future that can be affected by decision - the past is gone and cannot be changed"52. However, performance appraisal cannot give an absolute answer to every question of doubt but it can point the direction in which further enquiries should be made.
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