The Halo effect

I recently came to know few interesting facts about Google. At Google apparently the performance reviews are done based on Peer review. Now, come to think of that. Managers are fast becoming clueless about what the team does and are becoming more and more fragile to people who create a false illusion that they perform(aka Bull shitters). When your performance review is done by your peers, you cannot hide or represent facts about your work and you realise that your team has sudddenly becoming more cooperative now that you know that they are no more a competition but a source of advancement.

In addition to this, there is another interesting phenomenon. It has to do with a cognitive bias termed as 'Halo effect'. Wikipedia says this,
"The halo effect refers to a cognitive bias whereby the perception of a particular trait is influenced by the perception of the former traits in a sequence of interpretations".

To put it simply, its a illusion that is created in your mind that a person who dresses like a rockstar is really a rock star. Also for ex, see the image below,

Notice that the round light behind bush creates a godly illusion to bush while in reality its quite the opposite. This is Halo effect.

A dude called Edward L. Thorndike, discovered this phenomenon by interviewing few army commanding officers to rate their soldiers; where he noted the overall perception of their's over the soldiers actually depends upon the judgement based on only few factors. This phenomenon can also be observed in our perceptions over celebrities.

Now, how can this be different from the appraisals done by the managers? I bet, this is also a typical scenario where Halo effect comes into play. Managers pass a holistic judgement over the employees when in reality the impression is actually created based on knowledge on few factors. If that is the case what can be done about it? Nothing can be done about it. But with a peer performance system, the judgement will atleast be made by people who may know little more about you. What do you think?