Performance Appraisal
Biases
Primacy Effect
The primacy
effect is the
tendency to
remember the
first piece of
information we
encounter better
than information
presented later
on.
Recency Bias
Rating is influenced by the most recent behavior ignoring
the commonly demonstrated behaviors during the entire
appraisal period.
If someone recently rocked a presentation, that recent
performance will loom larger in a manager’s mind. Why?
Because it’s easier to remember things that happened
recently.
Halo Effect
An individual’s performance is completely appraised based
on perceived positive quality, feature, or trait.
For example, if a worker shows presenteeism at work, his
supervisor might give him a high rating in the other areas.
Horn Effect
The individual’s performance is completely appraised
on the basis of a negative quality or feature perceived.
For example, “He is not formally dressed up in the
office. He may be casual at work too!”
Central Tendency
Appraisers rate all the employees as average
performers.
Leniency Bias
Leniency bias occurs when managers give favorable ratings
even though they have employees with notable room for
improvement.
Spillover Effect
It simply means the previous performance rating affects the
current rating, irrationally.
For example, A man was awarded as a ‘star performer’ last
year as he got the highest rating. This year his performance
was not up to the mark even then, he was rated as a ‘star
performer’
Identify the type of Performance Appraisal
being used here.
A marketing agency uses a system where employees
receive feedback from multiple sources, including their
peers, supervisors, and even clients. The feedback focuses
on collaboration, leadership, and communication skills.
The manager consolidates this feedback to create a
comprehensive performance report.
Identify the type of Performance Appraisal
being used here.
In a software development firm, each employee sets
specific goals with their manager at the beginning of the
quarter. At the end of the quarter, the employee and
manager meet to evaluate how well the goals were
achieved. The discussion revolves around measurable
outcomes and whether the objectives were met.
Identify the type of Performance Appraisal
being used here.
A customer service department uses a performance
appraisal system that evaluates employees based on
predefined behavioral indicators. For example, a scale from
1 to 5 is used to rate an employee’s ability to handle
difficult customers, where 1 represents “Fails to resolve
customer complaints” and 5 represents “Resolves
complaints efficiently while ensuring customer
satisfaction.”
Identify the type of Performance Appraisal
being used here.
A retail store manager keeps a record of significant
events related to employee performance, such as
successfully resolving a major customer complaint or
failing to follow store protocols. During appraisals, the
manager discusses these incidents to highlight
strengths and areas for improvement.
What is the primacy effect in performance appraisals?
a) Giving higher ratings to employees who are similar to the manager
b) Overemphasizing an employee’s most recent performance
c) Letting the first impression of an employee dominate the evaluation
d) Judging an employee based on their personal traits rather than their
performance
Which of the following is an example of the halo effect?
a) A manager rates an employee highly in all areas because they
excel in one task.
b) A manager focuses only on the employee’s recent
performance.
c) A manager gives lower ratings to employees who have
different work styles.
d) A manager uses peer feedback to evaluate an employee.
What is recency bias?
a) Focusing on an employee’s first impression
b) Giving higher ratings to employees with similar
characteristics
c) Overemphasizing the most recent events in an employee’s
performance
d) Comparing employees against each other rather than
against standards
A manager gives better ratings to employees who share
similar interests and backgrounds. This is an example of:
a) Recency bias
b) Similarity bias
c) Horns effect
d) Central tendency bias
Which bias occurs when a manager rates an employee poorly
in all areas due to one negative trait or behavior?
a) Primacy effect
b) Halo effect
c) Horns effect
d) Recency bias
Scenario: A manager rates an employee poorly in all areas
because they missed a critical deadline, even though their
overall performance was excellent.
•Question: What type of bias is being exhibited?
Scenario: During appraisals, a manager focuses only on the
last two months of an employee’s performance and ignores
their earlier achievements.
Question: What type of bias is being exhibited?
Scenario: A manager consistently rates employees with
similar work styles and interests higher than others, even if
their performance is comparable.
Question: What type of bias is being exhibited?
Scenario: An employee who performed exceptionally well on a
high-profile project early in the year receives the highest
appraisal rating, despite underperforming in subsequent tasks.
Question: What type of bias is being exhibited?
Scenario: A manager avoids giving very high or very low
ratings to employees, assigning most of them an average
score regardless of their performance.
Question: What type of bias is being exhibited?
ABC Tech is a growing software development company with 800 employees. The company
relies on annual performance appraisals to evaluate employees, determine bonuses, and
identify candidates for promotions. Despite its structured appraisal process, dissatisfaction
among employees has been rising, with many questioning the fairness of the evaluations.
The Problem
An internal survey revealed the following issues:
1.Perception of Bias: 60% of employees felt their appraisals were influenced by subjective
factors rather than objective performance metrics.
2.Recency Bias: Managers tended to focus on the most recent accomplishments or
mistakes, neglecting the employee’s performance over the entire appraisal period.
3.Halo/Horns Effect: Employees who performed exceptionally well (or poorly) in one task
were consistently rated higher (or lower) across unrelated performance areas.
4.Similarity Bias: Managers were more likely to give favorable ratings to employees who
shared similar backgrounds, interests, or work styles.
5.Gender Bias: Women reported receiving less credit for team achievements compared to
their male counterparts, despite equal contributions.
Discussion Questions:
1.What strategies should ABC Tech implement to further
reduce bias in appraisals?
2.How can organizations balance subjective and
objective measures in performance evaluations?
3.What role does technology (e.g., AI-driven appraisal
tools) play in minimizing biases?
