Noise: A Flaw in Human Judgment

by Daniel Kahneman

If you are designing or revising a performance management system, you will need to answer these questions and many more. Our aspiration here is not to examine these questions but to make a more modest suggestion: if you do measure performance, your performance ratings have probably been pervaded by system noise and, for that reason, they might be essentially useless and quite possibly counterproductive. Reducing this noise is a challenge that cannot be solved by simple technological fixes. It requires clear thinking about the judgments that raters are expected to make. Most likely, you will find that you can improve judgments by clarifying the rating scale and training people to use it consistently. This noise-reduction strategy is applicable in many other fields.