Using 360-degree feedback data from one manufacturing company, this paper examines how rivalry causes bias in evaluations by colleagues. Rivalry was captured by the congruence of attributes such as proximity of promotion probability, affiliation, and year of joining the company. Bias is measured by the discrepancy between actual peer evaluation scores and expected peer evaluation scores based on evaluations by supervisors and subordinates. The results show that negative biases arise (a) when the absolute difference between the promotion probabilities of the rater and the ratee is small, or (b) when the rater is in the same department as the ratee. These downward biases are consistent with the tournament theory.
In order to avoid evaluation biases in 360-degree feedback, the subject company clearly states that the results will not be used to determine compensation, promotion, or other treatment. When evaluating a rival, negative evaluation bias can occur even under such circumstances. There is a trade-off: raters who are close to the ratee in terms of attributes and work location have more information about the ratee, but their evaluations are subject to a downward bias that reduces the accuracy of the information. When using 360-degree evaluations in personnel policies and research, it is necessary to take measures to compensate for such bias.