How does the contrast error affect performance appraisals?

The contrast error in performance appraisals occurs when an evaluator assesses an employee's performance not solely on their own merit but rather in relation to the performance of others, particularly a peer who was recently evaluated. This can lead to inaccurate assessments, as the appraiser's perception will be skewed by the comparison with the other individual’s performance. For example, if an evaluator has recently assessed a peer who performed poorly, they may unwittingly rate another employee higher than they deserve simply because they are being judged relative to that lower standard. This bias does not reflect the individual employee's actual performance against objective criteria, ultimately leading to misleading evaluations.

When performance appraisals are affected by the contrast error, it may result in unfair evaluations where employees are not accurately recognized for their contributions based on standardized performance metrics but rather against a fluctuating benchmark set by their peers. This ties back into the importance of maintaining objectivity in performance evaluations to ensure that all employees are assessed fairly and based on their own achievements rather than comparisons that could lead to inflated or deflated scores.