The phenomenon where ratings move toward the average rather than reflecting true performance is referred to as?

The correct answer is the central tendency error, which describes the tendency of evaluators to rate performances closer to the average rather than accurately reflecting the true performance of an individual. This error occurs when a rater avoids giving extreme ratings, either high or low, often leading to a skewed set of evaluations that underrepresent the actual performance levels of the employees.

In performance reviews, this can create a misleading picture of overall competency within a team, as exceptional and poor performances may both appear average. Understanding this concept is crucial for supervisors to ensure that evaluations are a meaningful reflection of employee performance, rather than a generalization that might mask true abilities and achievements.