The appraisal and management of performance is an important concern in organizations. Although interest in and use of performance appraisals have increased during the past 40 years, the practice of formally evaluating employees has existed for centuries. Despite its widespread use, the performance appraisal process continues to be plagued by both technical and nontechnical problems that reduce its effectiveness. Rating errors and perceptual biases in performance ratings are two such problems.

Performance ratings—quantifiable yet subjective assessments of an individual’s performance made by supervisors, peers, or others who are familiar with the employee’s work behavior—are frequently used to assess work performance. However, performance ratings do not always accurately represent an employee’s true level of performance. Differences between an employee’s true, veridical, objective level of performance and the ...

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