Peer evaluations in diverse teams: How external validation of team performance influences ingroup favoritism

Subjective performance assessments carried out by evaluators at the same hierarchical level as the person being evaluated—commonly known as peer evaluations—are increasingly common in team-based work settings. While diversity can be beneficial to team performance in many ways, it can lead to ingroup favoritism in peer evaluations. Specifically, team members tend to evaluate the performance of peers they perceive as part of their ingroup—based on visible characteristics such as gender, organizational affiliation, or other shared traits—more favorably than that of peers they classify as outgroup. In two experiments, we examine how the timing of peer evaluations—either before or after external validation of team performance (e.g., feedback from managers or customers)—affects ingroup favoritism. We predict and find that when peer evaluations are conducted after a team’s success has been externally validated, ingroup favoritism is mitigated. In contrast, external validation of team failure does not reduce this bias. Our findings underscore the importance of aligning the timing of peer evaluations with the availability of team-external performance signals and offer practical insights for designing fairer and less biased peer evaluation systems.