The illusion of transparency in performance appraisals: When and why accuracy motivation explains unintentional feedback inflation

Michael SCHAERER, Singapore Management University
Victoria MEDVEC
Roderick SWAAB


The present research showsthat managers communicate negative feedback ineffectively because they sufferfrom transparency illusions that cause them to overestimate how accuratelyemployees perceive their feedback. We propose that these illusions emerge because managers areinsufficiently motivated to engage in effortful thinking, which reduces theaccuracy with which they communicate negative feedback to employees. Sixstudies (N=1,954) using actualperformance appraisals within an organization and role plays with MBA students,undergraduates, and online participants show that transparency illusions are stronger when feedbackis negative (Studies 1-2), that they are not driven by employee bias (Study 3),and occur because managers are insufficiently motivated to be accurate (Studies4a-c). In addition, these studies demonstrate that transparency illusions are driven by more indirect communicationby the manager and how different interventions can be used to mitigate theseeffects (Studies 4a-c). An internal meta-analysis including 11 studies from thefile drawer (N=2,082) revealed a moderate effect size (d=.43) free of publication bias.