Tag Archives: Bias

“Precise” Offers Provide Negotiation Advantage

Malia F Mason

Malia F Mason

Opening negotiation offers typically “anchor” the discussion and shape settlement values.
Many people make opening offers in “round” numbers like $10 instead of “precise” numbers like $9.
However, “round number offers” were less effective than “precise” offers in negotiations, found Columbia’s Malia Mason, Alice J. Lee, Elizabeth A. Wiley, and Daniel Ames.
Negotiators may improve their outcomes by specifying offers in less typical precise values.

Y Charles Zhang

Y Charles Zhang

Precise first offers more potently anchored the negotiation range than round number proposals, and those who proposed these precise offers were perceived as more confident, credible, and “well-informed” regarding actual value.

Norbert Schwartz

Norbert Schwartz

This finding complements observations by University of Michigan’s Y. Charles Zhang and Norbert Schwarz of University of Southern California that consumers have less confidence in precise estimates when they doubt the communicator.

This type of consumer skepticism also occurred when communicators engage in less “cooperative conversational conduct norms” during negotiations.

H Paul Grice

H Paul Grice

These conversational norms were defined by Berkeley’s H. Paul Grice in Grice’s maxims, and advocate communicating:

  • Briefly,
  • Clearly,
  • Relevantly,
  • Truthfully,
  • Offering only as much and content as required.

A less positive aspect of precise offers is that they could signal “inflexibility” to some co-negotiators.
However, this tactic led people who received precise offers generally made more conciliatory counter-offers, leading to smaller adjustments and more favorable final settlements.
Precise offers also led to better final deals even when the negotiator opened with a less ambitious, but precise offer.

Martin Schweinsberg

Martin Schweinsberg

Another benefit of precise offers is that they are less likely to offend a co-negotiator by signaling aggression or greed, according to INSEAD’s Martin Schweinsberg collaborating with Gillian Ku and Madan M. Pillutla of London Business School’s and Cynthia S. Wang of Oklahoma State University.
Ambitious first offers may lead a negotiation partner to walk away from the discussion, resulting in an impasse or stalled progress toward a final settlement.

Gillian Ku

Gillian Ku

In addition, negotiators who see themselves in a lower-power position are more likely to walk away, even though both low-power and high-power negotiators were equally offended by extreme offers.
Though an extreme offer may result in high rewards, it can be a more risky strategy than offering a more moderate precise offer.

Manoj Thomas

Manoj Thomas

Another advantage of more precise offers is that buyers may not recognize their actual magnitude:  Buyers underestimated the size of precise prices, particularly under uncertain conditions in studies by Cornell’s Manoj Thomas and Vrinda Kadiyali with Daniel H. Simon of Indiana University.

In fact, U.S. homeowner participants in their lab said they would pay a higher price quoted in precise numbers than when stated in round number in the team’s analysis of actual residential real estate transactions in two U.S. markets.
In fact, buyers actually paid more when list prices were precise in experiments by Thomas and team.

Vrinda Kadiyali

Vrinda Kadiyali

Precise offers provide some of the benefits of favorably anchoring negotiation discussions while reducing risks of extreme offers.

-*How effective have you found “precise” opening offers in achieving your negotiation goals?

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Ethnic Diversity Reduces “Groupthink,” Economic “Bubbles”

Despite progress in raising awareness about implicit bias and stereotypes, most people are less likely to trust recommendations and evaluations from people of different ethnic groups.

Sheen Levine

Sheen Levine

However, this bias may reduce the “herd mentality” that characterized price “bubbles” in U.S. housing and global financial markets, reported Columbia’s Sheen S. Levine, Evan P. Apfelbaum of MIT, Goethe University’s Mark Bernard, Texas A&M’s Valerie L. Bartelt, Edward J. Zajac of Northwestern, and University of Warwick’s David Stark.
They concluded that, “Diversity facilitates friction that enhances deliberation and upends conformity.”

Economic “bubbles” occur when the majority of traders, probably influenced by a type of  “groupthink,” set inaccurate prices.
This leads to a mismatch between market prices and true asset values.

Irving Janis

Irving Janis

Groupthink can occur when three conditions interact, according to Yale’s Irving Janis:

  • Group Cohesiveness
    • Deindividuation,” when group cohesiveness becomes more important than individual dissenting views,
  • Group Structure
    • Homogeneity of group’s social backgrounds and ideology,
    • Group insulation from feedback,
    • Lack of impartial leadership,
    • Lack of norms requiring systematic analysis and decision procedures,
  • Context
    • Stressful external threats,
    • Recent failures,
    • Decision-making difficulties,
    • Moral dilemmas.

      Scott E. Page

A wider range of viewpoints leads to less groupthink and more balanced decisions in a mathematical model developed by University of Michigan’s Scott E. Page and Lu Hong of Loyola University.

Diverse groups ran into fewer “dead ends” when they worked to develop solutions than homogenous groups comprised of individuals who tended to think similarly.

David A. Thomas

David A. Thomas

Likewise, additional experimental evidence by Georgetown’s David A Thomas and Robin J. Ely of Harvard confirmed that identity-diverse groups can outperform homogeneous groups.
Group errors depended on group member ability and member diversity, expressed in the formula:

Collective Accuracy = Average Accuracy + Diversity.

To test the impact of group diversity on market “bubbles,” Levine’s group constructed experimental markets in Singapore and Texas, USA, in which participants traded stocks to earn money.

Evan Apfelbaum

Evan Apfelbaum

More than 175 volunteers with backgrounds in business or finance were randomly-assigned to groups of six ethnically-homogeneous or ethnically- diverse participants.

Traders knew the ethnic composition of their groups, but they couldn’t communicate with each other.
In addition, their “trades” of dividend-paying stock during 10 rounds were anonymous.

Homogeneous groups set inflated selling prices, yet traders in those groups still bought the stock, resulting in increasing stock prices.

Mark Bernard

Mark Bernard

In contrast, traders in diverse groups refused inflated selling prices, so the stock price fell to approximately the price in an “ideal” market with “rational” traders.

When traders and other decision-makers come from similar ethnic, social, and attitudinal backgrounds, they tend to place undue confidence in others’ opinions, and tend not to subject them to rigorous analysis.

Valerie Bartelt

Valerie Bartelt

As a result, they may be more likely to accept prices and deals that deviate from actual underlying values.
Levine’s group concluded that “homogeneity…imbues people with false confidence in the judgment of coethnics, discouraging them from scrutinizing behavior.”

  • How do you mitigate “groupthink” in organizational decision-making?

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Comparative Rankings May Reduce Gender Bias in Career Advancement

Iris Bohnet

Iris Bohnet

An “evaluation nudge” is a decision framing aid that may reduce biased judgments in hiring, promotion, and job assignments, according to Harvard’s Iris Bohnet, Alexandra van Geen, and Max H. Bazerman.

Alexandra van Geen

Alexandra van Geen

They recommended that organizations evaluate multiple employees simultaneously rather than each person independently.
This approach differs from “Stack Ranking” (“Rank and Yank”), advocated by GE’s Jack Welch and critiqued by many.

Multiple simultaneous evaluations are frequently used for hiring decisions, but less frequently when considering employee candidates for developmental job assignments and promotions.

Max Bazerman

Max Bazerman

Bazerman and Sally B. White, then of Northwestern with George F. Loewenstein of Carnegie Mellon demonstrated preference reversals between joint and separate evaluation.

George F. Loewenstein

George F. Loewenstein

Lack of comparison information in separate evaluation typically leads people to rely on internal referents as decision norms. These internal criteria may be biased preferences, according to Princeton’s Nobel laureate Daniel Kahneman and Dale T. Miller of Stanford.

Dale T. Miller

Dale T. Miller

Lack of comparative referents also can lead evaluators to rely on easily calibrated attributes, found University of Chicago’s Christopher K. Hsee.
Both of these mental shortcuts can systematically exclude members of under-represented groups.

Christopher K. Hsee

Christopher K. Hsee

Another problem is the “want/should” battle of emotions and preferences, outlined by Bazerman and Ann E. Tenbrunsel of Notre Dame, with Duke’s Kimberly A. Wade-Benzoni in their provocatively titled article, “Negotiating with Yourself and Losing.”

Ann E. Tenbrunsel

Ann E. Tenbrunsel

They argue that the want self” tends to dominate when deciding on a single option because there’s less information and less need to justify the decision.
In contrast, the more analytic “should self” is activated by the need to explain decision rationales.

Kimberly Wade-Benzoni

Kimberly Wade-Benzoni

Bohnet’s team asked more than 175 volunteer “employees” to perform a math task or a verbal task, then 554 “employer” evaluators (44% male, 56% female) received information on “employees’” past performance, gender, and the average past performance for all “employees.”

“Employers” were paid based on their “employees’’” performance in future tasks, similar to managerial incentives in many organizations.
Consequently, “employers” were rewarded for selecting people they considered effective performers.
Based on information about “employee” performance, evaluators decided to:

  • “Hire” the “employees,” or
  • Recommend the “employees” to perform the task in future, or
  • Return “employees” to the pool for random assignment to an employer.
Keith E. Stanovich

Keith E. Stanovich

The Harvard team found that “employers” who evaluated “employees” in relation to each other’s performance were more likely to select employees based on past performance, rather than relying on irrelevant criteria like gender.

Richard F. West

Richard F. West

In contrast, more than 50% of “employers” evaluated each candidate separately without reference to other “employees,” selected under-performing people for advancement.
Only 8% of employers selected under-performers when comparing “employees” to each other, and multiple raters for multiple candidates also tended to select the higher performing “employees.”

Team Bohnet suggested that people have two distinct and situation-specific modes of thinking, “System 1” and “System 2,” illustrated by University of Toronto’s Keith E. Stanovich and Richard F. West of James Mason University.

Keith Stanovich-Richard West System 1- System 2 ThinkingThese cognitive patterns can lead evaluators to select incorrect decision norms, leading to biased outcomes.

Decision tools like the “evaluative nudge” decision-framing can reduce bias in hiring and promotion decisions, leading to a more equitable workplace opportunity across demographic groups.

-*What other evaluation procedures can reduce unconscious bias in performance appraisal and career advancement selection processes?

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Do Unintended Consequences of Forced-Ranking of Employee Performance Outweigh their Short-Term Benefits?

Forced ranking (“stack ranking” or “rank and yank”) of employee performance was one contribution to MSFT’s loss of momentum, according to Kurt Eichenwald’s article on How Microsoft lost its Mojo. 

His extensive interviews with current and past Microsoft employees point to forced rankings leading to:

  •     Competitive sabotage and undermining of peers
  •     Focus on short-term results that coincide with twice-yearly rankings
  •     Undermined intrinsic motivation in face of  “impossible”-seeming odds
  •     Reduced innovation
  •     Lack of collaboration
  •     Focus on “visibility” to managers’ peers instead of improving performance
  •     Misguided decisions
  •     Mistrust of management and colleagues
  •     Unwanted attrition
  •     Stress for all.Forced ranking systems, used by a substantial number of Fortune 500 companies, is the eighth most-frequently used appraisal technique in the U.S.

It requires management teams to evaluate employees’ performance against other employees, rather against pre-determined standards.
The goal is to create a meritocracy in which superior performance is recognized and under-performance is “managed.”

Steve Scullen

Steve Scullen evaluated “forced distribution rating system” (FDRS) in a simulation study of 100 companies of 100 employees each over a three year period.
He reported in Personnel Journal that forced ranking and hypothetically firing of the bottom 5% or 10%, resulted in a 16% productivity improvement.
Productivity gains increase when more low performers were removed.

He acknowledged the negative consequences of forced rankings for employee morale, teamwork, collaboration, recruitment, shareholder perception, and brand image.
Nevertheless, Scullen found that the potential problems were counterbalanced by benefits.

Scullen determined that most benefit from forced ranking comes in the first few years of implementation: “…each time a company improves its workforce by replacing an employee with a new hire, it becomes more difficult to do so again… the better the workforce is, the more difficult it must be to hire applicants who are superior to the current employees who would be fired.

Dick Grote’s Forced Ranking: Making Performance Management Work, argues that most companies achieve benefits of forced ranking systems in “a few years” and are advised to replace
forced ranking with other talent management initiatives after the organization has implemented a refined selection process to ensure hiring top talent.

Peter Capelli

Peter Cappelli of The Wharton School and author of Talent on Demand: Managing Talent in an Age of Uncertainty, quantified the benefit of removing low performers:  This group contributes about five times less to organizations than high performers, according to his research.

In contrast, Alys Woodward of IDC challenged these arguments in her article on misunderstanding and misuse of statistics in stack ranking.

Alys Woodward

She concluded that “stack ranking assumes the statistics dictate reality, rather than reflect reality.”

Likewise, W. Edwards Deming opposed ranking because he thought that it destroys pride in workmanship, and opined that “the only way to improve a product or service is for management to improve the system that creates that product or service. Rewarding or punishing individuals trapped in the system is pointless and counterproductive.”

W. Edwards Deming

Robert Mathis and John Jackson pointed out potential legal challenges to stack-ranking.
They note that the practice may be difficult to defend in a court test because it does not comply with the following legal criteria:

  •     Criteria based on job analysis
  •     Absence of disparate impact and evidence of validity
  •     Formal evaluation criteria that limit managerial discretion
  •     Rating linked to job duties and responsibilities
  •     Documentation of appraisal activities
  •     Prevents action from controlling employee’s career
  •     Counseling to help poor performers improve

Though most employees do not seek out employers who use stack ranking, organizations may realize a short-term benefit in streamlining the workforce.
However, the practice may have unintended “soft” consequences, legal challenges, and time-limited value.

-*What positive and negative impacts have you observed related to forced-ranking appraisal systems?

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Acknowledge Potential Employer “Concerns” about Gender, Attractiveness to Get Job Offer

Although attractive people enjoy many advantagesattractive women applying for jobs in traditionally male jobs face a double disadvantage: gender and appearance.

Madeline Heilman

Madeline Heilman

The “beauty is beastly effect” is a hiring bias favoring men or less attractive women for “masculine” jobs, first described by Yale University’s Madeline E. Heilman and Lois R. Saruwatari.

Lois Suruwatari

Lois Suruwatari

They found that attractiveness was an advantage for men seeking managerial and non-managerial roles, but attractive women had an advantage only when seeking lower-level, non-managerial roles.

Michelle Hebl

Michelle Hebl

Attractiveness and gender can be considered a “stigma,” just as disability, obesity, and race.
Rice University’s Michelle R. Hebl and Robert E. Kleck of Dartmouth College reported that people in these categories can reduce hiring biases by acknowledging their “stigmatizing” characteristic during the interview.

Robert Kleck

Robert Kleck

In addition, women who proactively addressed the employers potential concern about gender or appearance in a traditionally male role were rated higher in employment suitability in a study by University or Colorado’s Stefanie K. Johnson and Traci Sitzmann, with Anh Thuy Nguyen of Illinois Institute of Technology.

Stefanie Johnson

Stefanie Johnson

These candidates were assumed to possess more positive “masculine” traits than other female candidates and evaluators were less likely to penalize these women for behaving in contrast to traditional gender role norms.

Traci Sitzmann

Traci Sitzmann

Attractive women’s pre-emptive communication favorably influenced rater’s evaluations of employment suitability.
This proactive approach buffered the impact “hostile sexism” while increasing “benevolent sexism’s” link to employment suitability ratings.

-*How effective you found “pre-emptive objection-handling” in workplace negotiations?

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Perceived Diversity = “Like Me”

Christopher Bauman

Christopher Bauman

Judgments of “diversity” are rarely completely objective:
People tend to rate a group as “diverse” when it includes members of the evaluator’s race, found University of California, Irvine’s Christopher W. Bauman, Sophie Trawalter of University of Virginia and UCLA’s Miguel M. Unzueta.

Sophie Trawalter

Sophie Trawalter

Almost 1900 volunteers from diverse racial groups rated headshots of a fictional company’s six-person management team for its “ethnically diversity”:

  • Caucasian team” included six white headshots (100% white),
  • Asian team” showed four white and two Asian people (mirroring the 66% majority of white people in the U.S.),
  • Black team” featured four white and two black people (66% white),
  • Asian + Black” team had four white, one black, and one Asian person (66% white).
Miguel Unzueta

Miguel Unzueta

Members of racial minority groups rated leadership groups as “more diverse” when they included members of their own racial group rather than members of other racial minority groups.

Participants rated groups as it “less racially diverse” when they did not include at least one member of their own racial group.
This “in-group representation effect” was stronger for African Americans than for Asian Americans.

In another study, more than 1,000 volunteers read news articles about the prevalence of prejudice, then provided ratings.
They showed no “in-group representation effect,” suggesting that reading about how another minority group suffers from prejudice reduced raters’ self-referential evaluation bias.

These results indicate that people’s expectations affect perceptions of diversity.
Priming awareness and empathy for similar experiences encountered by other groups reduced in-group biases.

Jim Sidanius

Jim Sidanius

African Americans are often judged as experiencing:

Lower social status,

More negative stereotypes,

More discrimination, reported Harvard’s Jim Sidanius and Felicia Pratto of University of Connecticut.

Felicia Pratto

Felicia Pratto

In contrast, Asian Americans tend to be attributed higher status so report less discrimination than other racial minority groups.

Andrea Romero

Andrea Romero

Despite this advantage, Asian Americans have a lower return on their investment in education than Whites, even though they achieve higher levels of education and income than other racial minority groups, reported University of Arizona’s Andrea Romero with Robert Roberts of University of Texas and another group led by UT colleague Myrtle P. Bell with David A. Harrison and Mary E. McLaughlin.

Myrtle P Bell

Myrtle P Bell

Higher levels of “diversity” have been linked to greater:

Valerie Purdie-Vaughns

Valerie Purdie-Vaughns

These findings were confirmed in studies by Columbia’s Valerie Purdie-Vaughns and Ruth Ditlmann, Claude M. Steele of Stanford, University of British Columbia’s Paul G. Davies and Jennifer Randall Crosby of Williams College and separate work by UCLA’s Jaana Juvonen and Sandra Graham with University of California Davis’s Adrienne Nishina 

Jaana Juvonen

Jaana Juvonen

Diversity is “in the eye of the beholder” because a team may appear more diverse to raters when the group’s composition aligns with the observers’ own characteristics.

-*How do you reduce personal in-group biases based on individual expectations and experiences?


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Male Peer Raters Discount Women’s Expertise in Science, Engineering

J Stuart Bunderson

J Stuart Bunderson

Problem-solving work groups and individual career development benefit from accurate recognition and deployment of expertise.

Nancy DiTomaso

Nancy DiTomaso

People who are perceived as experts by team members, regardless of their actual expertise, have a number of career advantages, found Washington University’s J. Stuart Bunderson:

  • Greater influence in group decision-making,
  • More opportunities to perform,
  • Great opportunity for team leadership roles.
D Randall Smith

D Randall Smith

In addition, peer evaluations of expertise frequently contribute to individual rewards, compensation, and advancement, noted Rutgers’ Nancy DiTomaso, D. Randall Smith and George F. Farris with Corinne Post of Pace University and New Jersey Institute of Technology ‘s Rene Cordero.

Melissa Thomas-Hunt

Melissa Thomas-Hunt

Teams benefit when they accurately identify and use group members’ expertise because they perform more effectively and produce higher quality work products, found Cornell’s Melissa C. Thomas-Hunt, Tonya Y. Ogden of Washington University, and Stanford’s Margaret A. Neale.

Aparna Joshi

Aparna Joshi

However, women in science and engineering do not have equal opportunities to fully use their expertise in work groups, and to receive commensurate rewards, reported Penn State’s Aparna Joshi.

George Farris

George Farris

She obtained peer ratings and longitudinal research productivity data for 500 scientists and engineers and found that women’s technical expertise was undervalued by male colleagues in peer ratings.

Rene Cordero

Rene Cordero

Male and female raters assigned different importance to education when evaluating team members’ expertise.
Women’s ratings were correlated with the target person’s education level, but males evaluators considered educational attainment less than male gender in assigning highest ratings for expertise.

As a result, women’s highest ratings went to those with the highest education level, whereas men’s top evaluations were assigned to other men, no matter their education level.

Margaret Neale

Margaret Neale

Women received significantly lower expertise evaluations than men, and men evaluated highly educated women more negatively than female raters who assessed their peers.

These findings suggest that male peers discount women’s educational achievements and are unlikely to effectively use women’s expertise, to the detriment of team work output as well as individual recognition.

-*How do you ensure that your expertise is recognized and applied in work groups?


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