Tag Archives: Bias

Plastic Surgery Changes Perceived Personality Traits

Michael J. Reilly

Michael J. Reilly

People often infer others’ personality attributes from visual cues, found Georgetown University Hospital’s Michael J. Reilly, Jaclyn A. Tomsic and Steven P. Davison, collaborating with Stephen J. Fernandez of MedStar Health Research Institute.
This facial profiling is cognitive shortcut that can lead to biased impressions and fewer professional and social opportunities for those unfavorably judged.

Jaclyn A. Tomsic

Jaclyn A. Tomsic

These researchers asked volunteers to evaluate photographs of 30 women shown with neutral facial expressions.

Each rater judged 10 images, including five (5) photographs before the person had plastic surgery procedures and five (5) images following surgical procedures:

  • Chin implant,
  • Eyebrow-lift,
  • Lower blepharoplasty (lower eye lift),
  • Upper blepharoplasty (upper eye lift),
  • Neck-lift,
  • Rhytidectomy (face-lift).

Michael Reilly-Preoperative-Postoperative photos

Raters were not informed that some people in the photos had plastic surgery procedures.

Evaluators assessed each photograph on a 7-point scale for perceived:

  • Aggressiveness,
  • Extroversion,
  • Likeability,
  • Risk-seeking,
  • Social skills,
  • Trustworthiness,
  • Attractiveness.

Michael Reilly - Pre-Post 2Raters assigned higher scores for likeability, social skills, and attractiveness to the images following plastic surgery compared with pre-surgery image ratings.

The researchers concluded that the eyes signal attractiveness and trustworthiness.

They noted that people who had lower eyelid surgery were rated significantly more attractive and trustworthy.

The team concluded that corner of the mouth indicates happy and surprised expressions and personality traits like extroversion.

Likewise, they reported that an upturned mouth and fullness in the cheeks can make a person look more intelligent and socially skilled.

In sum, they found that people who had a facelift procedure were rated significantly more likeable and socially skilled postoperatively.”

Volunteers in a different study attributed positive and negative personality traits to neutral faces when they perceived a similarity to standard positive and negative emotional expressions, reported Princeton’s Christopher P. Said and Alexander Todorov with Nicu Sebe of University of Trento.

Christopher P. Said

Christopher P. Said

This perceptual bias was demonstrated when volunteers attributed positive personality characteristics to faces with neutral expressions when some aspect of the face resembled typical facial expressions of happiness.

Similarly, neutral faces seen attributed negative personality characteristics when they had some similarities to displays of disgust and fear.

These trait inferences resulted from overgeneralization in emotion recognition systems.

Nicu Sebe

Nicu Sebe

 This error can lead to misattributed personality traits and biased impressions.

However, these inaccurate and biased judgments can become more favourable after plastic surgery.

-*To what extent do people’s personality traits seems different following plastic surgery?

-*How often are people treated differently following plastic surgery?

*What are ways to avoid confusing emotional expressions with personality traits?

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Reputation Affects Women’s Promotion, Earnings

Lily Fang

Lily Fang

Sterling Huang

Men gain greater job benefits from professional connections than women with better education and job skills, according to INSEAD’s Lily Fang and Sterling Huang of Singapore Management University.

Lauren Cohen

Fang and Huang examined U.S. equity analysts’ alumni connections with company senior officers and board members, using a methodology developed by Harvard’s Lauren Cohen, and Christopher Malloy with Andrea Frazzini, of AQR Capital Management.

Christopher Malloy

They considered analysts’:

  • Year-end earnings per share (EPS) forecasts,
  • Buy-stock recommendations from 1993 to 2009,
  • Price impact of their recommendations,
  • Selection to “All America Research Team” (AA) by Institutional Investor magazine during the same period.

    Selection to AA is based on the institutional investors’ subjective evaluation of each analyst’s industry knowledge, communication, responsiveness, and written reports.

Andrea Frazzini

Andrea Frazzini

Forecast accuracy is one of the least important selection criteria.
Therefore, skillful analysts may be not be selected if they are not visible and well-regarded by decision-makers.

Connections directly contributed to male analysts’ likelihood of being named to the  “All America Research Team” (AA), but this relationship did not hold for female analysts.

This variance in connections by gender had significantly different financial consequences for male and female analysts because AA team members earned three times more than non-team analysts.

About 25% of all analysts shared a school tie with a senior officer or board member in the firms they covered, and these connections improved men’s forecast accuracy significantly more than women’s.

These connections also improved the impact of male analysts’ stock recommendations, measured by market reaction to their buy and sell calls.

Female analysts with a connection to a female executive at covered firms significantly improved their ranking accuracy, yet male analysts with a male connection improved their ranking accuracy almost twice as much.

Herminia Ibarra

Herminia Ibarra

Herminia Ibarra, then of INSEAD, also demonstrated that men in an advertising firm capitalized on network ties to improve their employment positions.

Women remain in analytical roles even if they are capable of executive roles because promotion to General Manager roles depends on subjective evaluations by current decision makers, who are usually men.

This different impact of network connections early in women’s and men’s careers could explain gender gaps that exist throughout career trajectories.

Fang and Huang concluded that men and women may be evaluated using separate subjective criteria, resulting in differential career advancement for women and men.

Ronald Burt

Ronald Burt

Career-related social connections (“social capital”) are affected by legitimacy, reputation, and network structures, argued University of Chicago’s Ronald Burt.
He suggested that “holes” in a social network are gaps in connections between two people or groups.
Anyone who builds a bridging relationship across this gap is considered a “broker.” 

This role offers “entrepreneurial opportunities” to access information and shape communications across groups.
Women who fill “network holes” increase their possibility of advancement.

Burt noted limitations to this approach for women:  “…because women are not accepted as legitimate members of the population of highly promotable candidates.”

He noted that women and minorities succeed by leveraging the network of legitimate strategic partners, suggesting the importance of sponsors for underrepresented groups. 

-How do you identify and fill “structural holes in social capital networks”?

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Nothing to Lose: Effective Negotiating Even When “Powerless”

Michael Schaerer

Most negotiators prefer to have a “fall back position.”
However INSEAD’s Michael Schaerer and Roderick Swaab with Adam Galinsky of Columbia found that having no alternatives and less power than co-negotiators can improve outcomes.

A weak alternative can establish an unfavourably modestanchor point,according to Hebrew University’s late Amos Tversky and Daniel Kahneman of Princeton.

Adam Galinsky
Adam Galinsky

These “lowball” first offers usually undermine a negotiator’s final outcome.

Professional athletes and their agents provided examples of negotiating better deals when they had no “back up” offers and “nothing to lose.”  They set more ambitious anchor points, and often negotiate a more favourable settlement.

Amos Tversky
Amos Tversky

Schaerer and team asked a hundred people whether they would prefer to negotiate a job offer with a weak alternate offer or without any alternative.
More than 90 percent of participants preferred an unattractive alternative offer, confirming that any alternative is usually seen as better than no alternative.

Schaerer asked volunteers to sell previously-owned music when they had:

  • No offers (no alternative),
  • One offer at USD $2 (weak alternative),
  • A bid at USD $8 (strong alternative).
Roderick Swaab
Roderick Swaab

Volunteers in each group proposed a first offer, and rated the degree of power they felt.
People with the “strong” alternative felt most powerful and those with no alternative felt least powerful.

Volunteers with a weak alternative felt more powerful than those with no alternative, but they made lower first offers.
This indicated that they had less confidence than participants with no alternative.

Conclusion: Having any alternative can help people feel powerful but can undermine negotiation performance.

Schaerer’s team asked a volunteer to “sell” a coffee mug to a potential “buyer,” who was a confederate of the researchers.

The volunteer “seller” received a phone call from “another buyer,” who was a confederate of the researchers, before the volunteer seller met the original potential buyer.
When half the “sellers” met the original purchase prospect, the “buyer” made a low offer.
The “buyer” declined to bid for the other half of “sellers.”

Daniel Kahneman
Daniel Kahneman

Sellers without an alternative offer said they felt less powerful, but made higher first offers and received significantly higher sales prices than negotiators with an unattractive alternative.

In another situation, half of the “sellers” concentrated on available alternatives (none, weak, or strong) and the remaining negotiators focused on the target price.

Volunteers with unappealing alternatives negotiated worse deals than those with no options when they focused on alternatives.
“Sellers” avoided this pitfall by concentrating on the target price.
Conclusion:  Focus on the goal when alternatives are weak.

Negotiators with non-existent or unappealing alternatives can set audacious goals and make an ambitious opening offer because they have “nothing to lose.”
This strategy usually renders better results for the disadvantaged negotiator.

  • How do you overcome lowball anchoring when you have few negotiation alternatives?

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Precise Negotiation Offers Yield Better Bargaining Results

Malia F Mason

Malia F Mason

Opening negotiation offers usually anchor the discussion and shape settlement values.
Many people make opening offers in “round” numbers like USD$10 instead of “precise” numbers like USD$9.
This strategy rendered less effective results in negotiation experiments, reported Columbia’s Malia Mason, Alice J. Lee, Elizabeth A. Wiley, and Daniel Ames.

Y Charles Zhang

Y Charles Zhang

Negotiators can improve negotiation outcomes by specifying offers in precise values because they more potently anchor the negotiation range.
In addition, negotiators who proposed precise offers were perceived as more confident, credible, and “well-informed” regarding actual value.

Norbert Schwartz

Norbert Schwartz

In a study of consumer confidence in various offer types,  University of Michigan’s Y. Charles Zhang and Norbert Schwarz of University of Southern California reported that some recipients of precise offers viewed these proposals as “inflexible.

However, recipients of precise offers made more conciliatory counter-offers with smaller adjustments and more favorable final settlements.
Precise offers were associated with more favourable final deals even when the negotiator opened with a less ambitious precise offer.

Martin Schweinsberg

Martin Schweinsberg

Precise offers are less likely to be seen as “aggressive” by a co-negotiator, 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.
This enables negotiators to present ambitious first offers while avoiding “offending” a negotiation partner and stalling progress toward settlement.

Gillian Ku

Gillian Ku

This risk of stalemated negotiation increases if negotiators see themselves in a lower-power position and receive an extreme offer.
These negotiators may be more willing to end negotiations,

Manoj Thomas

Manoj Thomas

Precise offers can obscure their actual value, noted Cornell’s Manoj Thomas and Vrinda Kadiyali with Daniel H. Simon of Indiana University.
Buyers underestimated the size of precise prices, particularly under uncertain conditions:  U.S. homebuyers paid more when list prices were precise.

Vrinda Kadiyali

Vrinda Kadiyali

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

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

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Acknowledge Employer Appearance “Concerns” to Get Job Offer

Usually physically attractive people are positively evaluated by others. 
However, women applying for traditionally male jobs were less positively evaluated in search studies, and conclusions suggest that female gender coupled with attractive appearance seems to account for this disadvantage,

Madeline Heilman

Madeline Heilman

The “beauty is beastly effect” is a hiring bias favoring men or less attractive women for “masculine” jobs, 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 non-managerial roles.

Michelle Hebl

Michelle Hebl

Attractiveness can be considered a “stigma,” just as disability, gender, pregnancy, obesity, and race, suggested Rice University’s Michelle R. Hebl and Robert E. Kleck of Dartmouth College.
They reported that job seeks in these categories can reduce hiring biases by acknowledging the “stigmatising” characteristic during interviews.

Robert Kleck

Robert Kleck

Women who proactively addressed the employers conscious or unconscious 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.

This proactive approach buffered the impact “hostile sexism” while increasing “benevolent sexism’s” link to employment suitability ratings.

Stefanie Johnson

Stefanie Johnson

Evaluators said they assumed that these candidates possessed more “masculine” traits than other female candidates, which they viewed as an advantage over possessing “feminine” traits at work.

These assessors were less likely to negatively evaluate women behaving in contrast to traditional gender role norms when these women address their appearance, avoiding frequently-observed gender norm “backlash.” 

Traci Sitzmann

Traci Sitzmann

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

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Creating Productive Thought Patterns

Albert Ellis

Albert Ellis

Leaders’ actions actions are influenced by unspoken self-talk.
Sometimes, these thoughts are self-critical and provoke anxiety.

Aaron Beck

Aaron Beck

Cognitive Behavior Therapy (CBT), developed by University of Pennsylvania’s Aaron Beck, provides a systematic way to notice and restructure “irrational self-talk.
Similar approaches were developed by Albert Ellis in Rational-Emotive Therapy (RET), and David Burns in his synthesis of CBT and RET.

David Burns

David Burns

Arizona State University’s Charles Manz and Chris Neck  translated these self-management processes to managerial development.
They outlined a Thought Self-Leadership Procedure as a five-step circular process:

Charles Manz

Charles Manz

1. Observe and record thoughts,

2. Analyze thoughts for potential errors in reasoning (jumping to conclusions, exaggeration),

3. Substitute alternate positive, realistic, plausible, acceptable thoughts,

4. Monitor personal reactions to these thoughts,

5. If more negative thoughts appear, continue to substitute the more productive thoughts.

Screenshot 2023-03-04 at 10.06.57

John Crimmins

John Crimmins

Other recommendations to manage thoughts about stressful situations were distilled by John Crimmins of Behaviour Institute in coaching people at work.

He suggested asking the following questions:

  • How do I know if this thought is true?
  • What evidence do I have to support this thought or belief?
  • How can I test my assumptions/beliefs to find out if they’re accurate?
  • What would a trusted friend say about these thoughts?
  • How is this thought helpful now?
  • What other ways that I can think about this situation?
  • What would a friend say when I blame myself in this situation?
  • What would I say to a friend who was in this situation?
  • What would a friend say to me when I take this situation personally?
  • How can I consider this situation on a continuum rather than in either-or terms?

-*What practices do you use to develop and apply productive thought patterns?

©Kathryn Welds

Attractive Men May Appear Competent, But May Not Be Hired in Competitive Situations

Sun Young Lee

Sun Young Lee

Previous blog posts documented bias favouring attractive people for hiring, venture funding, and positive impressions by others.

Capable but less attractive individuals may encounter “workplace attractiveness discrimination,” reported Sun Young Lee of University College London, University of Maryland’s Marko Pitesa, Madan Pillutla of London Business School, and INSEAD’s Stefan Thau.

Marko Pitesa

Marko Pitesa

Their studies found that people making employment decisions show systematic selection bias based on candidates’ perceived attractiveness and organizational context.

Selection bias can occur when observers associate unrelated characteristics (gender, ethnicity, national origin, attractiveness) with expectations for work performance (“status generalization”).

Murray Webster

Murray Webster

These assumptions may occur without conscious awareness and without evidence, and can result in group inequalities, according to University of South Carolina’s Murray Webster and Martha Foschi.

James Driskell

James Driskell

Unrelated characteristics, including attractiveness, significantly affected face-to-face interactions in group task experiments by Webster and University of South Carolina colleague James Driskell.

Martha Foschi

Martha Fosch

Decision makers associated attractiveness with competence in male candidates but not in female candidates in one of Lee’s studies.

Interpersonal interdependence occurs when perceived attractiveness affects people’s decisions and actions, according to UCLA’s Harold Kelley and John Thibaut of University of North Carolina.

John Thibault

John Thibault

Lee’s group studied this relationship by assigning male and female volunteers to simulated employment selection situations.
Participants “interviewed” and provided “hiring recommendations” for “job candidates.”
Interviewers were told they would be collaborating for shared team rewards BUT competing for recognition, promotions, commissions, and bonuses.

Madan Pillutla

Madan Pillutla

Volunteers evaluated two similar resumes accompanied by photos of an “attractive” applicant and an “unattractive” candidate.
Next, assessors answered questions about the person’s competence, likely impact on the rater’s success, and their likelihood of recommending the candidate for the position.

When the decision-maker expected to cooperate with the candidate, male candidates who were perceived as more attractive were:

-judged as more competent,
-seen as more likely to enable the evaluator’s career success,
-more frequently recommended for employment.

Stefan Thau

Stefan Thau

However, when decision makers expected to compete with the candidate, attractive male candidates were rated as less capable.
Evaluators less frequently recommended attractive male candidates for employment, suggesting a systematic bias to preserve the evaluator’s place in the workplace hierarchy.

Attractive and unattractive female candidates were judged as equally competent, but attractive male candidates were rated as much more competent than unattractive male candidates.

Subsequent studies provided evaluators with candidates’ age, race, education and headshot to consider in selecting their competitor or collaborator in a tournament task.
Decision-makers preferred attractive male or female candidates unless their personal outcomes were affected by the selection decision.

These studies suggest that attractiveness discrimination is “calculated self-interested behavior” in which men sometimes discriminate in favor and sometimes against attractive males.

-*How do you align with “calculated self-interest behavior” to mitigate bias?

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Ethnic Diversity Reduces “Groupthink,” Economic “Bubbles”

Most people are unlikely 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 set inaccurate prices, probably influenced by a type of  “groupthink.
This cognitive error results in 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” occurs when group belonging 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 to conduct systematic analysis and clearly structured 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 developed solutions than did groups comprised of individuals who tended to think similarly.

David A. Thomas

David A. Thomas

Likewise, Georgetown’s David A Thomas and Robin J. Ely of Harvard confirmed that identity-diverse groups can outperform homogeneous groups
summarized in a 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 were anonymous.

Homogeneous groups set inflated selling prices, yet traders in those groups 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, people in homogeneous 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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