Question

When a manager uses the contrast effect in performance analysis, this refers to:

1. rating an employee by comparison with other employees.
2. the ratings being all higher or lower than the expected average.
3. allowing past performance ratings to influence current ratings.
4. rating all areas at average or midpoint.

Answer 1

The contrast effect in performance analysis refers to a manager rating an employee by comparison with other employees, which can lead to skewed appraisals and impact the effectiveness of a performance appraisal system.

Step-by-step explanation:

When a manager uses the contrast effect in performance analysis, this refers to the tendency to rate an employee by comparison with other employees. Instead of assessing each individual independently and on their own merits, the contrast effect can lead to a comparative evaluation that may not accurately reflect the employee's actual performance. This can be particularly problematic in a 360-degree performance appraisal system, where the goal is to achieve a well-rounded view of an employee's performance from various sources including supervisors, peers, direct reports, and occasionally, outside observers such as customers.

The contrast effect can skew the performance analysis and does not align with the intended multi-rater feedback design of the 360-degree system. Such biases can impact the effectiveness of an organization's performance appraisal system and ultimately, the development and job satisfaction of its employees.