The problem of employees' network centrality and supervisors' error in performance appraisal: A multilevel theory

Abstract

This article reveals an unexplored paradox for HR managers: the centrality of an employee in the social network benefits performance but hampers performance appraisal because it affects supervisors' rating errors. Central employees can be erroneously rated high on performance even when they are not high performers because supervisors tend to overappraise their performance. A distinction is made between rating precision, which depends on supervisors' uncertainty regarding employees' performance, and rating accuracy, which depends on supervisors' bias in favor of employees. Employee centrality is posited to be beneficial to precision but deleterious to accuracy because it regulates the diffusion of positive information, status, and power, all of which distort supervisors' capacity and motivation to accurately appraise performance. It is then argued that rating errors caused by network centrality affect aggregate perceptions of justice in organizations. When employees are highly connected to each other in a dense network, organizations have a strong and positive justice climate. Yet when some employees are more central than others in a centralized network, organizations have a negative and weak justice climate. The article contributes to the literature because it identifies an unexplored dark side of network centrality and offers recommendations for HR managers to cope with its deleterious consequences and for scholars to study them.

Contextualizing social networks: The role of person–organization fit in the network–job performance relationship

“…The task performance item was, “Please respond to the following questions about how well you feel that you and your coworkers are performing the requirements of your jobs.” Each employee rated him/herself and coworkers on how well he or she felt he/she and each of their coworkers were performing on a seven‐point scale (1 = “Not Well at All”; 7 = “Extremely Well”). We used the mean of all raters as the measure of task performance to obtain a 360° evaluation as a way of reducing various performance rating biases including those possessed by supervisors when evaluating subordinates with high levels of network centrality (Bizzi, 2018). 2 On average, an employee had 10 performance ratings and 74.5% of ratings included the employee's direct supervisor 3…”

A discussion on using quantitative or qualitative data for assessment of individual competencies

“…Given that all performance appraisals are subject to human involvement, error and bias are constant threats to effective evaluation (Battaglio, 2015; DeNisi and Smith, 2014). Complementarily, Bizzi (2018) adds that performance ratings can be affected by two types of error. The first one relates to errors that supervisors make because they are uncertain about an employee performance (random error), as indicated by precision in performance ratings.…”

“…The second one relates to errors that supervisors make because they are biased in favor of or against an employee (systematic error), as indicated by accuracy in performance ratings. So, while the random error direction is unpredictable, the systematic error direction is predictable because a supervisor is biased in one specific direction, either in favor of or against certain employees (Bizzi, 2018).…”

The Impact of HR Practices on Employees’ Performance: An Imperative Role of Islamic Work Ethics

“…Kuvaas (2006) suggested that assessment of employee is based upon his or her performance according to the requirement of market and demand of the organization. In order to enhance the efficacy of performance appraisal system, Bizzi (2018) proposed a multilevel theory, which also addressed the supervisor's error in performance appraisal system.…”