Having known the pooled variance of an instrument, its maximum permissible error may be fixed. For an instrument, the maximum permissible error should in no case be lower than its standard deviation. An instrument having closer maximum permissible error than its repeatability is of no practical value. Say for example, twice the value of the standard deviation may be a reasonable value of the maximum permissible error of the instrument and vice versa. That is standard deviation of any instrument should not be more than half of its maximum permissible error.
If the pooled variance is proportional to the input value then maximum permissible limits may be in the same proportion. This is the one reason as to why maximum permissible errors are given in percentage rather than in absolute units.
Source : measurement uncertainty
