Performance evaluations and regular feedback are a part of corporate life. They are designed with the assumption that if people receive feedback, that their performance will improve. But does performance improve? It depends.
People tend to evaluate themselves as above average. Consistently researchers have found across professions, tasks, skills, industries, that we rank ourselves as better than average, creating what is sometimes called the Lake Wobegon effect, where everyone is above average. Of course, this isn’t mathematically possible. But is this tendency to rate oneself more highly than our peers consistent across all people?
The research shows that people who are least competent, that is those in the bottom 25% in a particular task or skill, are most likely to over-rate their skills. In a study by Kruger & Dunning (1999), participants in the bottom quartile in four separate studies consistently over-rated their competence. In fact, the least competent participants scored in the 12 percentile on an objective test of knowledge and skill, while estimating their skill at the 62nd percentile (a full 12 points above the mathematical average of 50th percentile).
The researchers also tested whether poor performers could recognize competence in others. They gave each participant a package of five tests that reflected the performance of all participants, asking them to identify the number of questions that were correct and incorrect in each test. The least competent performers were less able to accurately assess the ability of others. The least competent participants were then asked to review their own test, and re-assess their own performance. And their performance self-assessment actually went up! Thus, feedback, by seeing the more competent performance of others, did not improve their assessment of their own ability.
The conclusion here? You don’t know what you don’t know. In other words, if you are not competent in a skill or knowledge set, you don’t know how to assess it. It’s ironic, although the person is not competent, they rate their own competence highly. Without the ability to compare themselves accurately to others, they do not see the need to improve, in spite of objective performance feedback. Thus they don’t take steps to improve.
So how can you improve people’s understanding of their own ability? Paradoxically, you do this by making them more competent. The researchers completed a final study wherein students were given a critical thinking and logic test. They were then randomly assigned to an irrelevant task or to a reading which provided strategies for solving critical thinking problems. Participants in the bottom quartile who received training improved their ability to assess their own performance so much that they were equal to those in the top 25%. So what does this mean? It means that you can only accurately assess your ability when you are competent in the subject at hand.
So what does this mean in practice for performance appraisals and feedback? While they appear to work well for average and above average performers, it appears that they may be less effective for the least competent employees in your organization. The good news is that with training, which leads to improved competence, most people can more accurately self-assess their performance. And of course, you get the benefit of improved competence.
If you have an employee whose self-assessment is significantly out of whack with your own assessment, it might be worthwhile to consider the Above Average Effect. The solution isn’t feedback. The solution is developing competence.