Transparency illusions in performance appraisals: How egocentric bias explains feedback Inflation

• Main Authors: SCHAERER, Michael, SWAAB, Roderick, KERN, Mary, BERGER, Gail. A., MEDVEC, Victoria H.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2015
• Subjects: egocentric bias; feedback inflation; illusion of transparency; Human Resources Management; Organizational Behavior and Theory
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/5281
• Institution: Singapore Management University

This article provides an answer to the question of why negative feedback in organizational settings is often perceived more positively than intended. Past research has primarily focused on empathic buffering and conflict avoidance to explain why feedback inflation occurs. We argue that these accounts are incomplete and propose that there is a disconnect between the message the evaluator intends to send and the message received by the person being evaluated. This disconnect occurs because the sender suffers from a widespread egocentric bias, the illusion of transparency, which suggests that people insufficiently adjust from their internal experiences and thus believe that their feelings, thoughts, and behavior are as apparent to others as they are to them. We test our theory in the context of performance appraisals using a manager-employee paradigm. Across four studies employing different scenarios, performance measures, and samples, we demonstrate that managers consistently suffered from illusory feelings of transparency and underestimated how positively employees understood their negative feedback. We rule out the possibility that employees misinterpreted the negative feedback and show that managers predicted more accurately how the employee would interpret the feedback as it became more positive. Finally, we propose a theoretically motivated intervention: managers no longer suffered from illusory feelings of transparency when they were asked to consider arguments at odds with their egocentric views, because doing so reduced their self-focus. We discuss theoretical and practical implications for delivering performance feedback in organizations, the illusion of transparency, and social cognition.