Why Does Grade Inflation Work?

Don A. Moore, Samuel A. Swift, Zachariah S. Sharek and Francesca Gino, whose paper I cited in Grade Inflation Pays But So Does Rolling Back the Odometer – Or Overrating a Bond have a more recent paper,

PLOS ONE: Inflated Applicants: Attribution Errors in Performance Evaluation by Professionals.

There is a lot for to think about in the paper.  For my purposes, here are some items that stand out.

In one of their studies (Study 4), they looked at admissions results for four selective MBA programs.  The data led them to conclude that grade inflation works.  (as Princeton, who doesn’t inflate grades has noted.  See Princeton Giving Up on Using Grades As Motivation and Feedback?)  I wonder if it works in part because the GPA of the admitted class is a factor in the US News ratings.

Continuing with the reputational affect of admitting students with high grades, what about the reputational affect of graduating students with an inflated GPA?  The authors address this and write that

“…[graduates’] reputation in the form of grades contributes to the reputation…of the organization…undergraduate institutions have an incentive to promote an image of intelligence and achievement to these outside audiences by maintaining a relatively high grade distribution. …”

Thus, it seems to me that we get a remarkable situation:  motivation to admit students with inflated grades in order to increase the institution’s reputation, and motivation to graduate students with inflated grades for exactly the same reasons.  Inflated grades in plus inflated grades out equals better reputation as an educational (?) institution.  It is hard for incentives to get more perverse than this.

The authors also note that there are anecdotal reports of institutions manipulating their grade distribution with the publicly expressed intent of influencing the selection decisions of hiring firms.  I followed their reference to find the following astounding story,

In Law Schools, Grades Go Up, Just Like That – NYTimes.com.

The article describes how Loyola Law School in Los Angeles just added .333 to everyone’s GPA – and they were just one of many doing that.  The story does note that the University of Chicago was one school bucking the trend.  Good for the faculty at U. of Chicago.