There Are Several Weaknesses in the Performance Evaluation Data

There are several weaknesses in the performance evaluation data.

Retrievability Bias. "Management By Objective" review and the whole PAS are taken place once a year. Managers are more likely to think about recent weeks or months of the entire rating period and use them as their evidence of rating. An employee who didn't perform well right before his annual PAS may be rated unfavorably due to recency bias. In addition, when preparing the MBO, the manager may use his recent management objectives as the critical ones which may be short-sighted and not in line with the long-term goal of the entire corporate. A solution is to perform PAS on a more frequent basis.

Representative Bias. In "Developmental View" part, manager may classify the employee into an affinity group and identify the person as having the same assumed characteristics of the group. Also the manager may extend the general impression of the employee to many other categories of performance to create an overall evaluation. A solution is to perform a 360 degree evaluation to gather feedback from peer, direct manager and customers to make the results complete and objective.

Anchoring Bias. Healthy growth requires people who are competent in their current job as well as people with potential. Consequently the group should have avoided using criteria such as lack of future potential in competent people or seniority for downsizing. Stevens' suggestion for reviewing people's potential and seniority, put in an anchoring bias that should be avoided. In addition since the 3rd quarter of 1975, the financial situation of Webster Industries had shown a recovery from the downturn. In this case, Bob Carter should request an adjustment to the anchoring bias of 15% downsizing target and examined the list of criteria that Stevens' laid out in the light of sustained growth.