Abstract
We focus on “inequality of process”. Process means the process of labor and inequality of process means that workers' efforts are evaluated unbiasedly. Many Japanese companies have introduced the performance system since the burst of bubble economy. However many of them have some troubles. We analyze the relationship between such biased evaluations, that is, inequality of process and the consequences. Thus we analyze the elementary models in which workers decide an optimal effort level when there are biased evaluation and heterogeneity of abilities. As a result, workers with high ability choose high effort while workers with low ability choose low effort. When effort levels are interpreted as working hours, the result suggests that biased evaluation and heterogeneity of abilities lead working hour difference.
