Peer evaluations are fairer when teams know they’re successful

Peer evaluations – where team members assess each other’s contributions to collaborative work – are widely used as co-workers are known to be the best judges of individual performance in team-based work settings. A study by WU Professor Gerhard Speckbacher and Martin Wiernsperger has shown that the timing of peer evaluations affects how biased they are, providing useful insights for companies using this approach.

In today’s team-based workplaces, peer evaluations are a key source of information for managers to assess performance, determine bonuses, and make promotion decisions. However, peer evaluations can be systematically biased, particularly in diverse teams.

Diversity is known to improve a team’s performance. This means the team is made up of people with different genders, nationality, race, ages, professional backgrounds, and organizational affiliation. But in diverse teams, individuals tend to see others as part of either an ‘ingroup’ or ‘outgroup’, depending on the characteristics they share. This can shape how they evaluate their peers, giving more favorable evaluations to their ‘ingroup’.

Team spirit vs. ingroup favoritism

The more strongly that individuals identify with the team overall, the weaker their identification with an ‘ingroup’, making them less likely to introduce bias into their peer evaluations. One factor that is known to increase team identification is shared success – particularly when this is externally validated or recognized. Conversely, external validation of team failure can reduce the attractiveness of the team, strengthening identification with ‘ingroups’ and potentially increasing bias.

External validation of a team can take many different forms, such as management assessment, product sales, customer feedback, winning or losing a competition or tender. Managers aren’t always in control of this kind of feedback, but they can control when peer evaluations take place.

In practice, organizations differ considerably in when they conduct peer evaluations. Some firms, like Facebook and Google, adhere to fixed schedules. Some, including Amazon, Goldman Sachs, and JPMorgan Chase & Co, use continuous evaluation systems. Others, such as Deloitte, seek out peer evaluations only after a project’s success or failure has been confirmed through client or partner feedback.

Reducing bias

Professor Speckbacher and his colleagues carried out two separate experiments to determine whether the timing of external validation affected bias in peer evaluations.

The first experiment involved a student group assignment that was a normal part of an undergraduate course. The researchers set the students into teams of four that included two men and two women. After the assignment was completed, they told the teams whether they performed above or below average. This measure was used as a proxy for ‘success’ or ‘failure’. Some teams were told before they completed peer evaluations, while other teams were told after the evaluations.

In the second experiment, the researchers matched students one on one either with other students or with non-students to carry out a team task. Again, ‘success’ or ‘failure’ was communicated either before or after peer evaluations.

In both cases, the researchers found that participants assessed the performance of their ‘ingroup’ team members more favorably than their ‘outgroup’, particularly when teams were successful. This bias was reduced when peer evaluations were carried out after they were informed of their success. In the first experiment, peer evaluations were more biased in unsuccessful teams if they had already been told of their failure.

Detailed study results

Gerhard Speckbacher; Martin Wiernsperger (2025) Peer evaluations in diverse teams: How external validation of team performance influences ingroup favoritism In: Accounting, Organizations and Society. Available at  https://doi.org/10.1016/j.aos.2025.101595