Standard economic textbooks assume that we are all perfectly rational beings who always make calculated and accurate decisions based on costs and benefits. However, significant research from Behavioural Economists such as Dan Ariely and Daniel Kahneman has shown that we all have systematic unconscious biases and shortcomings (i.e. we repeat the same mistakes over and over again) that can affect our decisions. These biases can affect hiring decisions and lead to bad hires. In this blog post, we cover 5 of these biases and advise you about how to reduce the potential impact of these biases on hiring decisions.
1. Halo Effect
The halo effect describes our tendency to think that a candidate is a good performer in lots of areas because they impressed us in one area. For example, a candidate comes into an interview full of positive energy and they nail the interview. This excellent interview and your favourable impression towards the interviewee then lead you to assume that the interviewee has other strong qualities and capabilities that will help him/her excel in the role. This interview star then gets the job and it turns out that they are not a good performer at all and after many interventions, you have to let them go. The halo effect can also be triggered by the physical attractiveness of a candidate, how they dress or even their name.
2. Confirmation Bias
Confirmation bias occurs when hiring managers and recruiters look for and assign more weight to evidence that confirms their preconceptions, while discounting evidence that goes against those assumptions. Below are some examples of the confirmation bias in hiring and recruitment processes:
“I knew this candidate wouldn’t interview well. I was told by a friend that he was not smart enough to work here.”
“This candidate came highly recommended by my ex-colleague. I think she will be a great fit for the job.”
“ When I saw how he was dressed, I knew he wouldn’t interview well.”
In all the above examples, your analysis could be skewed as a result of your preconceptions. It is worth noting that you’re particularly susceptible to the confirmation bias when you are under pressure to fill a role quickly.
3. Bandwagon Effect
Many companies put applicants through a number of rounds of different interviews before making the final decision. In some cases, this can cause a bandwagon effect. For example, let’s say the first manager completes his interviews and briefs the second manager for her round of interviews. In his briefing, the first manager also makes a comment about how the second manager should not waste her time as a particular applicant is clearly not the right fit. When the second manager finishes the interview with the applicant, it is possible that she will jump on the bandwagon even if she doesn’t necessarily feel the same way.
4. Recency Bias
Recency bias is the tendency to weigh the latest information more heavily than older data. Below are some examples of the recency bias in hiring and recruitment processes.
“ We’ve had great success with the last two people we’ve hired from Company X. We should cut all the red tape and hire a few more”.
“ The last time I hired somebody who came from Competitor X, it didn’t work out. I would be very reluctant to do that again”.
5. Relativity Bias
In many scenarios, we tend to make choices in relative terms. This means that we compare things that are similar and comparable but not those that aren’t. To explain how relativity affects the quality of our decisions, we will use a case study conducted by Dan Ariely. Ariely conducted a study where he took photos of MIT Students. He then got other students to analyse the two photos and choose who was better looking. For the next stage of his experiment, Ariely added a third photo which was a photo shopped version of one the other photos. This photo shopped version made the person look worse. This photo shopped version acted as a decoy to make the original version look better. So initially, participants had to choose who was better looking between Photo A and Photo B. At the next stage, some participants were asked to choose between A, B and a worse version of A and others were asked to choose between A, B and a worse looking version of B. The presence of this decoy significantly altered the decision. When there was a worse looking version of Photo B in the choice set, people were more likely to say B was better looking than A but when there was a worse looking version of A in the choice set, people were more likely to say that A was better looking than B.
You are probably wondering how does this bias impact hiring decisions? Well, imagine you have three frontrunners for a role and two candidates have very similar backgrounds and one has a completely different background. You may unconsciously underestimate the merits of the candidate with a completely different background as you are focused on comparing and evaluating the two candidates with similar backgrounds.
How to Minimise The Effect of these Biases
It is very hard to eliminate these biases completely but to reduce their impact, you can take some of the following steps:
1. Recognising the existence of these biases on our decisions is the first step you can take to minimise their impact. One of the biggest biases we have (blind spot bias) is that we often fail to recognise the impact of these biases on our own judgement. We have a tendency to be overconfident in our abilities and experts are more prone to overconfidence than lay people as they are more convinced of their own abilities.
2. Work with the subject matter experts to thoroughly benchmark the job (i.e. list some of the key accountabilities) prior to the recruitment process. You can then evaluate how closely the candidates are to the benchmark.
3. Conduct consistent interviews that probe only the desired skills, traits and behaviours.
4. Get candidates to complete psychometric personality and/or ability assessments to determine whether an applicant is a good fit for the role. The assessments, which are based on science and data are completely impervious to these biases and they can help you to objectively predict how likely a candidate is to succeed on the job. These assessments can be introduced early in the hiring process before any human involvement—in other words, before any bias gets a chance to influence the decision.
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