Tag Archives: Performance

Reputation Affects Women’s Promotion, Earnings

Lily Fang

Lily Fang

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

Sterling Huang

Sterling Huang

In fact, among the U.S. Wall Street analysts, many women had superior educational qualifications: Thirty-five percent these women earned degrees from Ivy League universities, in contrast to 25 percent of men from the same prestigious universities.

Lauren Cohen

Lauren Cohen

Fang and Huang examined analysts’ alumni connections with senior officers or board members of up to eight companies, using an approach pioneered by Harvard’s Lauren Cohen, and Christopher Malloy with Andrea Frazzini, of AQR Capital Management.

Christopher Malloy

Christopher Malloy

They considered analysts’:

  • Year-end earnings per share (EPS) forecasts,
  • Buy/sell 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.
Andrea Frazzini

Andrea Frazzini

The coveted AA recognition is based on the institutional investors’ subjective evaluation of each analyst’s industry knowledge, communication, responsiveness, written reports, and related skills.

Surprisingly, forecast accuracy is one of the least important selection criteria, so skillful analysts may be overlooked as an “All America” member 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).
In contrast, professional connections were unrelated to female analysts’ probability of selection as AA, suggesting that investors subjectively value connections among male analysts but not among female analysts.
These reputational decisions have significant financial consequences for analysts because those awarded the AA title earn around three times more than those without it.

About 25% of women and men analysts shared a school tie with a senior officer or board member in the firms they cover, but these connections improved men’s forecast accuracy significantly more than women’s estimate correctness.
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 firms they covered had a highly significant improvement in accuracy ranking, yet male analysts with male connection experienced almost twice as much accuracy improvement.

Herminia Ibarra

Herminia Ibarra

This significantly different impact of similar connections early in women’s and men’s careers could explain gender gaps that exist throughout long-term career trajectories.
This finding supports Herminia Ibarra’s similar results for men and women in an advertising firm, where men capitalized on network ties to improve their positions with employers.

Women capable of executive roles at these Wall Street firms may remain in analytical roles because promotion to General Manager roles depend on subjective evaluations by current decision makers, who are usually men.

The “Old Boys Club” remains a powerful advantage for men even though female analysts are equally represented in the AA analyst pool.
Fang and Huang concluded that despite mandated protections against gender discrimination in the U.S, men and women may be evaluated using different subjective criteria, even with the benefit of social connections.
This leads to differential career advancement for women and men.

Ronald Burt

Ronald Burt

These career-related social connections, or social capital, are affected by legitimacy, reputation, and network structures, argued University of Chicago’s Ronald Burt.
He noted that “holes” in a social network are entrepreneurial opportunities to add value, and women should have equal opportunities to fill network holes and increase their possibility of advancement.

However, Burt noted that “entrepreneurial networks linked to early promotion for senior men do not work for women” because women are not accepted as legitimate members of the population of highly promotable candidates.

He explained that women and minorities who succeed despite this disadvantage gain access to social capital by leveraging the network of a legitimate strategic partners.
This economic analysis may explain the powerful advantage of sponsors for women and minorities in the workplace.

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

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Group “Intelligence” Linked to Social Skills – and Number of Women Members

Anita Wooley Williams

Anita Wooley Williams

A group’s “general collective intelligence factor” is related to social and communication skills, not to the average or maximum individual intelligence of group members, found Carnegie Mellon’s Anita Williams Woolley, Christopher F. Chabris of Union College, with MIT colleagues Alex (“Sandy”) Pentland, Nada Hashmi, and Thomas W. Malone.

Instead, group intelligence was most closely associated with:

Christopher Chabris

Christopher Chabris

More than 695 volunteers completed an individual I.Q. test, then collaborated in teams to complete workplace tasks including:

  • Logical analysis,
  • Coordination,
  • Planning,
  • Brainstorming,
  • Moral-ethical reasoning.
Alexander Pentland

Alexander Pentland

Teams with higher average I.Qs performed similarly on collective intelligence tasks as teams with lower average I.Qs.

Simon Baron-Cohen

Simon Baron-Cohen

Each participant also completed a measure of empathy based on identifying emotional states portrayed in images of people’s eyes, developed by University of Cambridge’s Simon Baron-Cohen, Sally Wheelright, Jacqueline Hill, Yogini Raste, and Ian Plumb.
This instrument, Reading the Mind in the Eyes test, evaluates social reasoning.

Sally Wheelright

Sally Wheelright

Ability to infer other team members’ emotional states correlated with team effectiveness in solving workplace tasks, but not with extraversion and reported motivation.

David Engel

David Engel

Teams that performed best, both online and face-to-face, also demonstrated stronger social and communication skills:

  • Accurate emotion-reading, empathy, and interpersonal sensitivity,
  • Communication volume,
  • Equal participation.

High-performing teams excelled in inferring others’ feelings even if conveyed without visual, auditory, or non-verbal cues while interacting online in a study by Wooley’s team collaboration with MIT’s David Engel and Lisa X. Jing.

Reading the Mind in the Eyes

Reading the Mind in the Eyes

These studies demonstrate that teams may increase task performance when members have well-developed “Emotional Intelligence,” social insight, and communication skills rather than the highest measured IQ.

  • How do you enhance a work group’s collective intelligence in performance tasks?

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Activate Women’s, Minorities’ Stereotype Threat Reactance to Enhance Performance

Claude Steele

Claude Steele

Stereotype threat, defined as activating prevailing but often-inaccurate concepts of a group’s typical behavior, was consistently associated with reduced scores on standardized test performance for women and African Americans in numerous studies by Stanford’s Claude Steele and Joshua Aronson now of NYU.

Joshua Aronson

They found that eliciting “reactance” or resistance to these stereotypes improved women’s and African Americans’ performance more than activating a positive shared identity, such as shared membership in a respected group.

Anthony Greenwald

Anthony Greenwald

Stereotypes may be invoked by implicit primes, which led both men and women to confirm gender stereotypes even when they explicitly disavowed stereotypes and associated prejudice, found University of Washington’s Anthony Greenwald and Mahzarin Banaji, then at Yale.
However, when evaluators focused on tasks, including judgment challenges about members of a stereotyped group, judges were less likely to render discriminatory decisions.

Laura Kray

Laura Kray

In contrast, both women and men showed stereotype reactance — the tendency to behave in contrast with the stereotype in negotiation tasks — when stereotypes were elicited with explicit primes, reported University of California, Berkeley’s Laura Kray, Leigh Thompson of Northwestern and Columbia’s Adam Galinsky.

Stereotype threat can be advantageous to men when negotiating with women, who are stereotypically considered less skillful negotiators.
Unlike Steele’s finding, Kray’s team observed performance-equalizing effects of activating a shared identity that transcended gender.

Gordon Moskowitz

Gordon Moskowitz

People can dissociate themselves from prevailing stereotypes with contrast primes, according to Lehigh University’s Gordon B. Moskowitz and Ian W. Skurnik of University of Utah.
They differentiated:

Standard-of-Comparison Prime, which produces greatest contrast by citing an extreme illustration.
This strategy relies on perception and requires less cognitive effort.

-Set–Reset Prime, which typically uses trait descriptions, and produces greatest contrast when moderate rather than extreme.
This approach requires significant mental effort.

Ryan P. Brown

Ryan P. Brown

Even men are not immune to stereotype threat.
Male participants “choked” when performing after a positive male stereotype was activated by University of Oklahoma’s Ryan P. Brown and Robert A. Josephs of University of Texas. 
Similar to women’s performance decrements in response to negative stereotype threat, Brown and Josephs hypothesized that men’s performance was undermined by “pressure to live up to the standard.”

Robert A Josephs

Robert A Josephs

People can manage stereotype threat by explicitly referring to the stereotype to activate reactance.
In addition, it’s valuable to refer to a shared identity that transcends the stigmatized group identity.
Eliciting contrast effects through examples and trait descriptions is another way to diminish the impact of stereotype threat of performance.

  • How do you manage stereotype threat for yourself and others?
  • How effective have you found activating stereotype reactance?

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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 recent 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, leading 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
  • Context
    • Stressful external threats,
    • Recent failures,
    • Decision-making difficulties,
    • Moral dilemmas.
Scott E. Page

Scott E. Page

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

Diverse groups ran into fewer “dead ends” in developing solutions than homogenous groups full of smart 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 decisions, and tend not to subject them to rigorous analysis and scrutiny.

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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Confident Cluelessness = The Dunning-Kruger Effect + Ignorant Bliss

Stav Atir

Stav Atir

Most people overestimate their own expertise, and do not recognize their own incompetence.
previous blog post highlighted this metacognition phenomenon known as the Dunning-Kruger effect.

This effect has been demonstrated for people’s overestimates of their skills in grammar, emotional intelligence, logical reasoning, firearm care and safety, debating, and financial acumen.

Emily Rosenzweig

Emily Rosenzweig

More recently, the effect was demonstrated by Cornell’s Stav Atir and  Emily Rosenzweig of Tulane,  who asked volunteers if they were familiar with concepts like centripetal force and photon as well as fictitious terms including plates of parallax, ultra-lipid, and cholarine.

About 90% of participants claimed some knowledge of at least one of the nine fake concepts, and people who thought they were most knowledgeable also said they recognized more of the meaningless terms.

David Dunning

David Dunning

Atir and Rosenzweig concluded that poor performers lack insight about their lack of skill because they ”don’t know what they don’t know.”

Another verification of the Dunning-Kruger effect was replicated among volunteers who completed a logical reasoning task, an intuitive physics problem, a financial acumen challenge, and others presented by University of California San Diego’s Elanor Williams, Justin Kruger of NYU, and Cornell’s David Dunning.

Elanor Williams

Elanor Williams

Some people achieved perfect scores, and expressed confidence in their answers, yet those who achieved no correct answers expressed the same degree of confidence as the most able performers.

Both high and low achievers made judgments based on intuitive “rules,” so they felt confident based on having a clear, if inaccurate, rationale.
Williams’ team concluded, “Rule-based confidence is no guarantee of self-insight into performance.”

Justin Kruger

Justin Kruger

Another “cringe-worthy” example is financial illiteracy accompanied by high confidence in financial acumen among people who filed for bankruptcy.

More than 25,000 people rated their financial knowledge, then tested actual financial literacy in the 2012 National Financial Capability Study, conducted by the Financial Industry Regulatory Authority with the U.S. Treasury.
Of these, 800 respondents said they filed bankruptcy within the previous two years.

Not surprisingly, bankruptcy filers achieved financial knowledge scores in the lowest third of respondents, but they rated their knowledge more positively than financially-solvent respondents.
Nearly a quarter of the recently bankrupted respondents gave themselves the highest possible rating whereas only 13 percent of other respondents were equally confident.

Deborah Keleman

Deborah Keleman

Even 80 physical scientists at top universities provided a number of inaccurate purpose-driven (“teleological”) explanations about “why things happen” in the natural world, including:

  • “Moss forms around rocks in order to stop soil erosion,”
  • “The Earth has an ozone layer in order to protect it from UV light.”
Joshua Rottman

Joshua Rottman

Participants provided these explanations at their own speed or with ambitious time constraints.
When these professional scientists provided rushed explanations, they were twice as likely to endorse inaccurate purpose-driven rationales, reported Boston University’s Deborah Kelemen, Joshua Rottman, and Rebecca Seston.

Rebecca Seston

Rebecca Seston

In addition, scientists were equally likely as humanities scholars to endorse teleological arguments despite most physical scientists’ rejection of purpose-driven explanations for natural phenomena.

However, these results suggest that teleological propositions are a default explanatory preference among humans, and could explain their presence in myth and religion across cultures.

These results suggest that most people hold a positive view of their capabilities even when faced with contrary evidence.
However, some groups, such as women, may hold an unrealistically modest view of capabilities despite affirming feedback.
These biases in self assessment point to the importance of realistic recalibration of confidence, aligned with consensual feedback.

-*How do you minimize the risks of “Clueless Confidence”?
-*How can systematic underestimates of competence be reduced to increase “Realistic Confidence”?

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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

Based on their research, they recommended that organizations evaluate multiple employees  simultaneously rather than each person independently.
This approach contrasts widespread practices like “Stack Ranking” (“Rank and Yank”), advocated by GE’s Jack Welch and critiqued in a previous blog post .

This approach is 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, provided the original demonstration of 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, though these may be biased or stereotyped preferences, according to Princeton’s Nobel laureate Daniel Kahneman and Dale T. Miller of Stanford.

Dale T. Miller

Dale T. Miller

Additionally, lack of comparative referents can lead evaluators to rely on easily calibrated attributes, found University of Chicago’s Christopher K. Hsee.
Both of these shortcuts can lead to biased decisions, which may systematically exclude members of under-represented groups.

Christopher K. Hsee

Christopher K. Hsee

Still 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 itheir 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 them to perform the task in future, or
  • Return to “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 varied cognitive patterns can lead evaluators to select incorrect decision norms, leading to biased outcomes.

As a result, 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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Intrinsic Motives, not Positive Consequences Linked to Achieving Goals, Career Performance

Amy Wrzesniewski

Amy Wrzesniewski

Sustained effort toward a goal may be intrinsically motivated by personal commitment to a larger “mission.”
At the same time, goal-seeking activity may be extrinsically motivated by external rewards, counteracting intrinsic motivation’s positive impact on effective career performance.

Xiangyu Cong

Xiangyu Cong

This complex interaction of internal and external motives was investigated among more than 10,000 people admitted to the United States Military Academy (“West Point”) by Yale’s Amy Wrzesniewski, Xiangyu Cong, Michael Kane, Audrey Omar, and Thomas Kolditz, with Barry Schwartz of Swarthmore.

Michael John Kane

Michael John Kane

Wrzesniewski’s team considered the long-term impact of holding both intrinsic motives (desire to serve and protect citizens) and extrinsic motives (have a respected career) for attending West Point cadets on:

  • Promotion to commissioned officer rank,
  • Extending officer service beyond the minimum required period of 5 years,
  • Selection for early career promotions.
Audrey Omar

Audrey Omar

Cadets who were intrinsically motivated were more likely to accomplish these goals.
However, those who also reported extrinsic motivation were less likely to achieve these career distinctions.

Richard Koestner

Richard Koestner

A meta-analytic review of nearly 130 experiments by University of Rochester’s Edward Deci and Richard Ryan with Richard Koestner of McGill confirmed the undermining effects of extrinsic rewards on intrinsic motivation from childhood through adulthood.

Mark Lepper

Mark Lepper

People may report less intrinsic motivation when extrinsic rewards are available, a phenomenon called the “overjustification hypothesis”  by Stanford’s Mark Lepper, David Greene, and Richard Nisbett of University of Michigan.

Clark McCauley

Clark McCauley

People typically view their work as being intrinsically or extrinsically motivated:

  • Job, mostly extrinsically motivated
  • Career, some intrinsic and extrinsic motivation
  • Calling, intrinsically motivated by fulfillment from the work itself, resulting in greater satisfaction and better performance than the other two orientations, according to Wrzesniewski’s previous work with Schwartz, collaborating with Bryn Mawr’s Clark McCauley and Paul Rozin of Penn.
Paul Rozin

Paul Rozin

These results  empirically support long-standing philosophical guidance to find meaning in work rather than primarily focusing on positive consequences of goal achievement.

Thomas Kolditz

Thomas Kolditz

This is especially relevant because the U.S. Military employs extrinsic motive appeals in marketing messages to recruit cadets, suggesting that military services provides “money for college,” “career training,” and enables members to “see the world.”

However, extrinsic motives tend to be associated with less career recognition and tenure than those who find meaning in the organization’s mission.

-*How do you increase intrinsic motivation when extrinsic motivation may seem more appealing?

-*What elements make your work “a calling”?

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