What is a common issue with the output of ranking methods in performance appraisals?

The selection of shared performance levels as a common issue with the output of ranking methods in performance appraisals highlights a significant limitation of these methods. Ranking systems typically require that employees be placed in a specific order based on performance, which can cause challenges when multiple employees perform at a similar level. This situation can lead to a lack of differentiation among high-performing employees, making it difficult for managers to recognize and reward individual contributions effectively.

When rankings are highly rigid, they do not account for nuances in performance, such as varying strengths or competencies among employees who may be performing similarly but excelling in different areas. This limitation could contribute to demotivation and dissatisfaction among employees who feel that their unique contributions are not adequately acknowledged or differentiated. Thus, the nature of ranking methods often fails to capture the complexity of employee performance, leading to potential issues in recognition and development opportunities for those performing at shared levels.