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Related Experiment Videos

Between-individual comparisons in performance evaluation: a perspective from prospect theory.

Kin Fai Ellick Wong1, Jessica Y Y Kwong

  • 1Department of Management of Organizations, Hong Kong University of Science and Technology, Kowloon, Hong Kong. mnewong@ust.hk

The Journal of Applied Psychology
|March 17, 2005
PubMed
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Performance evaluation is swayed by how data is presented. Small numbers amplify perceived differences, while large numbers reduce them, impacting how individuals are rated in comparative tasks.

Area of Science:

  • Organizational Psychology
  • Decision Science
  • Behavioral Economics

Background:

  • Performance evaluations are crucial in organizational settings.
  • Comparisons between individuals (between-individual comparisons) significantly shape these evaluations.
  • The framing of performance data can introduce biases.

Purpose of the Study:

  • To investigate how the numerical presentation of performance information influences perceived differences between individuals.
  • To examine the impact of data framing on preference reversals in rating tasks.
  • To provide a theoretical explanation for these effects using prospect theory.

Main Methods:

  • Two studies were conducted involving participants evaluating performance data.
  • Study 1 manipulated the scale of numbers used to represent objective performance levels (e.g., absence vs. attendance rates).

Related Experiment Videos

  • Study 2 extended this by examining trade-offs across multiple attributes and changing presentation formats.

    • Main Results:

    • Perceived performance differences were greater when objective performance levels were presented using small numbers (e.g., 2% vs. 5%) compared to large numbers (e.g., 98% vs. 95%).
    • Relative preferences for ratees reversed based on the presentation format of performance information, especially when trade-offs were involved.
    • Findings suggest a systematic bias in performance evaluation driven by numerical framing.

    Conclusions:

    • The way performance data is framed significantly impacts between-individual comparisons and subsequent evaluations.
    • Prospect theory provides a useful framework for understanding how framing effects influence judgment in performance ratings.
    • Organizations should be aware of these framing effects to ensure fairer and more accurate performance assessments.