Definition of Halo Effect
The halo effect describes a cognitive behavior where one judges others without making a real judgment about the person. The observer makes a positive impression of someone by perceiving everything they do is positive.
In organizations, the halo effect occurs when managers have a positive image of a specific employee. The halo effect can be created in several manners like shared common hobbies, interests, employee’s attitude, or excellent performance at the start of the employee’s career. This halo effect affects the performance appraisal and managers consistently give that employee high ratings without finding out any room for improvement.