Taking advantage of social comparisons in performance appraisal: the relative percentile method

Social comparison theory (Festinger, 1954) implies that it may be more efficacious for job performance raters to compare an employee to other employees rather than to use typical "absolute" rating standards. We assessed whether the incorporation of social comparisons into performance appraisals, using the relative percentile method (RPM), would predict criterion variance beyond that predicted by more traditional absolute ratings of performance. A sample (N = 170) of managers involved in an assessment center was used, and the center provided criteria by which the relative criterion-related validity of social-comparative versus non comparative (absolute) appraisals could be assessed. Overall, in consonance with a preponderance of earlier research, social-comparative (RPM) performance appraisals showed incremental criterion-related validity over traditional absolute performance appraisal methods.