Complex organizational processes often generate more biases than simple processes.
Because with time, pressure and stress, managers rarely have the opportunity to spend too long on decision-making processes. As a consequence, in practice, they prefer using heuristics through informal processes. In other words, managers avoid the complexity of the process by using their intuitive system 1 rather than their analytical system 2 to make decisions.
Example 1: 30 criteria, 10 documents and one final evaluation: starting now!
Let’s be more concrete. In a given financial institution, the evaluation processes are extremely in-depth. To decide on the ranking of their team members, managers have to use more than thirty criteria split between ten documents.
The analytical system 2 of our brain is only able to cope with 4 or 5 criteria. Otherwise, there is a cognitive overload and managers will find a another solution to make their evaluation.
Solution 1: Let managers cope with the 30 criteria
As our analytical brain is able to manage about four or five criteria at once, five ranking criteria among thirty may be unconsciously selected by each manager’s brain in an effort to avoid cognitive overload.
The most attractive ones for our brain! Did she/he study in the same school? Does she/he come from the same country? Is she/he good looking? Has she/he performed well on the very last or very first project you worked on together? In short, the five criteria you select will be biased and the final ranking may be unfair.
Solution 2: Use an algorithm to weight each ranking criteria
To support the analytical evaluation of managers, the thirty criteria may be put together on the same form and weighted. The weighted average will give the final ranking.
First, it is bureaucratic so some managers may feel frustrated losing their freedom with this evaluation system. They may perceive it as a depersonalization of their relationship with the candidates.
Second, it is boring, effortful and time-consuming so some managers may evaluate some criteria very quickly without taking time to think through if the candidate really deserves it. It will be a little bit like when we fill in a boring marketing questionnaire without really paying attention to the questions. Again, as in the first solution, what may happen is that managers will focus on four or five criteria that they will evaluate properly and then get bored and finish rapidly.
Solution 3: Be short and simple!
To be fast and effective, the best way is to summarize the thirty criteria in four or five criteria that are simple to understand and fast to evaluate by managers (ex: contribution to the firm, technical performance, management skills, client relationship) .
Of course, this 4-criteria summary is not always possible but the idea is to reduce the criteria as much as possible. The second step to avoid biases is to invite managers to justify their ranking with fact-based answers, if possible quantified.
For instance, this team member develops ”good relationships with our clients”. Why? Because clients have provided excellent feedback three times. The best way to remember all these details begins with inviting managers to create notes on a daily basis about small but significant facts in an effort to get an objective ranking at the end of the year.
As a conclusion, to make evaluation processes more objective, it could be useful to:
- Limit evaluation criteria to 4 or 5 when possible to avoid cognitive overload;
- Be fact-based to reduce subjectivity;
- Take notes on a daily basis on elements that can help your final evaluation to avoid memory bias.
Example 2: When informal processes take the advantage over bureaucratic official processes
Let’s take another example. In a consulting firm, the staffing process is extremely long and complex. Managers have to send the content of their mission to HR staff who decide based on some complex criteria who should work on the project. A first proposal for the team composition is then sent to the manager who often changes some team members based on his/her preference. These changes have to be, of course, approved by HR staff, and the ping-pong competition can last awhile.
However, managers work under pressure with tight deadlines. Sometimes, they have to build a team for a mission in a few days while the ping-pong process is so complex, that it sometimes takes a few days!
What do managers do to avoid the formal and demanding staffing process?
They directly call people they want to work with, without informing the HR department. This informal process is quick and effective in the short-term, but has the major disadvantage to be biased and suboptimal for talent development in the long-run. Managers tend to work with people they have worked with before (status quo bias, familiarity bias) or with people with a ”good reputation” often based on only one testimony of a colleague (anchoring effect, law of the small number, gambler’s fallacy, confirmation bias).
In the long run, junior consultants always work with the same clients, in a sector and geographical location they do not necessarily appreciate and with the same managers. As a consequence, most of them get bored or feel discriminated on arbitrary criteria and leave the firm.
Gino, F. (2013). Why our decisions get derailed and how to get back on track. European Business Review, March-April, 60-62
Cable, D., Gino, F., & Staats, B. (2013). Reinventing the onboarding process. MIT Sloan Management Review, Spring Issue, 23-28.
Gino, F. (2011). In hiring and promoting, look beyond results. Wall Street Journal, October 24, R7.