PERFORMANCE APPRAISAL BIASES AND BEHAVIORAL BIASES IN DECISION MAKING: AN EMPIRICAL STUDY

The decisions taken by the HR manager is very crucial for organizations' competitiveness and growth. Decision making is crucial because the decisions taken by the individual may dictate the path of others. Since our childhood ,we are not encouraged to take our own decisions as the parents think that it would be absolute risk to give children a complete leeway in their decision making and hence there is no encouragement for decision making from childhood and Decision-making over time is an important aspect of adaptive social functioning (Garoon & Moore, 2004) and decision not only influence the organization in which they are taken but also the entire humanity and decision-making is very significant function and not an iota of the administrative functions can be performed without it.. Further , biased behavior place a predominant role than all others when it comes to workplace issues and Such a behavior is mostly an upshot of unconscious bias where people tend to make influenced decisions instead of making rational and logical ones (Sharma, 2015). It may be performance appraisal decision or investment decision, there is an ample scope for decisions being biased. In this context the present study is an attempt to understand the relationship between Performance appraisal biases and behavioral biases in Decision Making. The main objectives of the study includes the investors' biases in the investment decisions, Human resource manager's biases in performance appraisal decision .The study also made an attempt to compare and contrast these biases in these two decisions. The study is based on secondary data. The authors have made an attempt to use the currently available literature to study the performance appraisal biases in performance appraisal decision and investor's biases in investment decision. After reviewing the various papers, the authors have compared the different biases in the performance appraisal decision and investment decision. From the study it was found that the biases in both the decision making are common but with different nomenclature. From the study it was observed that halo error in performance appraisal decision is similar to herding in the investment decision. Recency effect in performance appraisal decision is similar to anchoring in the investment decision. Leniency error in performance appraisal decision is similar to heuristics in the investment decision. Contrast in performance appraisal decision is similar to framing in the investment decision. Central tendency in performance appraisal decision is similar to herding in the investment decision. Discrimination between insider and outsider in performance appraisal decision is similar to herding in the investment decision. It was concluded that with proper training on these biases, majority of these biases can be minimized if not avoided.