What is the contrast effect in appraisal evaluations?

The contrast effect in appraisal evaluations refers to the tendency to evaluate an employee's performance in relation to the performance of those who were evaluated before them. This psychological bias occurs because appraisers often compare the attributes of the current employee to either a high-performing or low-performing individual, which can skew the assessment. For example, if an employee is evaluated right after a star performer, their evaluation might seem less favorable, despite potentially being good in an absolute sense. This bias can lead to inconsistencies in performance ratings and create unfair outcomes.

In a performance appraisal process, overcoming the contrast effect is important for ensuring that evaluations reflect actual performance rather than being colored by the performance of others encountered in the evaluation sequence. Therefore, comparing current evaluations to past appraisals can create discrepancies and challenge the reliability of the performance measurement system.