Source | Linked In | Mellissa Ferrier , Senior Manager – Talent Management & Learning and Development
Despite what we think, humans are irrational decision makers. We ignore reason and logic and instead use cognitive shortcuts and primitive rules of thumb. Here are the 5 main ones to watch out for:
- Confirmation bias. This causes us to favour evidence that supports our existing beliefs. Thus making it harder to think critically, remain objective and listen to alternatives. As a result, we like people who agree with us and associate with those who share our pre-existing views.
- Illusory superiority bias. This causes us to think we are better than average at most things. How many times have you heard your direct reports say that they are only below average/average performers during appraisal time? I bet never. Recent studies suggest 90% of employees believe they are in the top 10% of performers. This bias can result in higher levels of incompetence, lower self awareness, and greater unwillingness to seek feedback and engage in personal development.
- The Anchoring effect. This tendency causes us to fixate on a value that in turn gets compared to everything else during decision making. In a famous experiment, Tversky and Kahneman asked people to estimate how many African countries were part of the UN, but first they spun a wheel of fortune that had been painted with numbers from 0-100. They found the higher the number participants rolled lead to higher estimates of countries in the UN. The number, despite being random and unrelated to the judgement, still acted as a centre point and affected the final decision. Anchors can make large numbers seem small, cause us to make incorrect estimates and make bad financial decisions.
- Availability heuristic. What easily comes to mind influences your decision making. Imagine driving down an empty highway at 120 km assuming the speed is safe, as nothing is eluding you to the probability of an accident, when all of a sudden you see an accident and then slow down to 100 km (the speed limit) because the probability of an accident is more available in your mind. Or take vivid talents that are socially valuable – communication skills, ability to hit sixes in cricket, or having an MBA from Berkeley – will be more likely overvalued than subtle abilities that are equally important. The book Moneyball: The Art of Winning an Unfair Game by Michael Lewis captures this bias beautifully.
- Representative heuristic. We think in stereotypes. This primitive bias of classifying helps us to discriminate between food and poison, friend and foe, etc., and is crucial for survival but also causes us to unfairly discriminate. Imagine hiring someone for a project management job. This bias will heavily influence our judgments on whether we think they are good job fit depending on how much the potential candidate looks like someone we imagine doing the job (or even looks like the current job incumbent)