Detailed Answer
Correct answer: (B)
When managers rate the majority of incumbents in the middle of the pack
Rather than using extremes in ratings, there is a tendency on the part of many raters to "play it safe" and evaluate employees as average, even when performance varies. This bias is referred to as the error of central tendency. Raters with a large span of control and little opportunity to observe behavior are likely to rate the majority of incumbents in the middle of the scale rather than too high or too low.