Based on several years of research and a careful analysis of the rating process Wherry developed a theory of rating. An accurate rating is seen as being a function of three major components: Performance of the ratee, observation of that performance by the rater, and the recall of those observations by the rater. Cast in a mold of classical psychometric theory each of these components is seen as consisting of a systematic portion and a random portion. The systematic portion of each component is further broken down. The performance of the ratee is a combination of true ability or aptitude for the job and the influence of the environment. What the rater observes is a function the performance of the ratee and bias of observation and what the rater recalls is a result of those observations combined with a bias of recall. The development of the theory of rating unfolds by defining the various factors that affect each of these components in a series of linear equations. Various theorems and corollaries are proposed which should lead to a maximization of the true ability component of the ratee and minimize environmental influence and the bias and error components. The theorems and corollaries suggest testable hypotheses for the researcher in performance evaluation.

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