Nationality biases in peer evaluations: The country-of-origin effect in global virtual teams

In a post-COVID-19 world, due to the increasing reliance on virtual work, global virtual teams (GVTs) are critical for the international success of firms. A fundamental challenge that firms face in this new remote work context is the need to measure the performance of individuals in GVTs. Peer evaluations are advocated as a way to improve the validity of performance appraisals. Peers work closely with one another and, presumably, are better positioned to observe and evaluate fellow team members’ performance. Even when completed in good faith, however, a fair evaluation of individual contributions and performance in GVTs could be distorted by subjectivity, bias, cultural and institutional differences, and the limitations of online communication tools. Based on a sample of 6634 GVTs comprised of 33,271 people in 79 countries that worked on an international business (IB) project, we tested the country-of-origin (COO) effect in peer evaluations within the context of GVTs. Results indicate that the nationality of the team member is a source of significant bias in peer evaluations. Our tests show that the prestige and the level of economic development of the country that a team member is from is a better predictor of peer evaluations received than objective measures of individual skills and competencies, including English proficiency, technical ability, and cultural intelligence, or national per-capita spending on education, suggesting that a COO effect based on personal bias may affect performance ratings more than actual contributions. We conclude that the COO effect in peer evaluations in GVTs has to be taken into account when designing evaluation systems and discuss implications for theory, practice and future research.