Legal & Ethical Issues in Performance Appraisal System
There is nothing kind of law which supports an organization to comment on the performance of its members, just as no law requires a company to produce annual budgets or provide good customer service If a company decided to have a performance appraisal system,
The system must follow the all necessary laws. In the eyes of the law, a performance appraisal is a kind of employment test for the employee. It is thus compiled in such a manner that similar to that of other standards of the employment process
The legal terms and requirements for performance appraisal systems are similar to any other selection based  tests.
But there are several other kinds of ethical issues related to performance appraisal system which majorly or majorly can impact on organization directly or indirectly in the short or long run.
The performance Appraisals must not be used to discriminate employees on the premise of race, religion, age, sex, inability, conjugal status, pregnancy, or sexual inclination.
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All appraisal records should be kept and maintained by the organization, especially in case of poor performance. The records will be help to handle any legal issues in respect of poor performer. Likewise, employee believes they have been dealt with unfairly, they may have rights to instigate legal action years later, in such case, the records retention would help to protect employer
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The performance appraisal system should not mealy used for promotion, transfer, increment, demotion etc rather this tool should be use to optimize the performance of an employee and plan his career and learning prospects for future performance and growth.
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Performance appraisal results will be as  fair, accurate and supported by all  evidence
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Appraisals should avoid inflammatory and emotive harass, improper  language.
Appraisal results should be treated as private and confidential information. Record storage should be secure and controlled.
An employee should have the opportunity to comment on their appraisal result, to express their agreement or otherwise, and to appeal the result or at least request a review by up line supervisors
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