Professional in Human Resources (PHR) Practice Exam

What is central tendency error in performance appraisal?

1. Rating all employees too harshly

2. Rating all employees too leniently

3. Rating employees within a narrow range regardless of their actual performance

4. Focusing only on the top performers

The correct answer is: Rating employees within a narrow range regardless of their actual performance

Central tendency error in performance appraisal refers to the tendency of some raters to evaluate all employees within a limited range of scores, rather than accurately reflecting their individual performance levels. This typically occurs when a rater avoids assigning extreme ratings, leading to a clustering of scores around a central point, such as the midpoint of a rating scale. This error can undermine the performance evaluation process, as it does not differentiate between high and low performers adequately. When all employees receive similar ratings, it fails to provide constructive feedback and can result in confusion regarding actual performance, potentially impacting motivation and development opportunities. The other options refer to different types of rating errors. For instance, rating all employees too harshly or too leniently reflects bias in judgment toward specific extremes, while focusing only on top performers disregards the performance evaluation of the broader employee group. Central tendency error, however, is specifically characterized by the narrow scoring range without due consideration for individual performance differences.