Many performance management programs include a self-assessment component. Self-assessment is a most constructive practice, and its inclusion in these programs is advantageous to both employee and employer. But this practice can also be dangerous for employees who are unaware of the effects of a cognitive bias called the Availability Heuristic. That cognitive bias can cause some employees to produce self-assessments that are biased in favor of the employer. The bias comes about from what might be called the Availability Paradox.
The Availability Heuristic is the method we humans use to estimate the probabilities of events. We're using the Availability Heuristic [Tversky 1973] when we estimate these probabilities by sensing the difficulty of imagining or understanding the string of events that lead to the event in question.
For instance, when we ask people whether death resulting from being attacked by a shark is more likely or less likely than death from being hit by falling airplane parts, they usually answer that death from shark attack is more likely. Actually, death from being hit by falling airplane parts is 30 times more likely, but people are fooled because it's easier to imagine shark attacks, which are more common.
The Availability Paradox (my term) arises when judgments of the likelihood of events are based not only on the difficulty (or ease) of imagining the events or understanding how they could possibly arise, but also on the difficulty (or ease) of recalling such events. [Schwarz 1991] I first encountered this idea while reading a brilliant and very accessible book by Daniel Kahneman: Thinking, Fast and Slow. [Kahneman 2011]
Unfortunately, The Availability Paradox arises
when judgments of the likelihood
of events are based not only on
the ease of imagining the events
or how they could possibly
arise, but also on the
difficulty of recalling thememployers can use the Availability Paradox to depress employee self-assessments. It works like this. If I ask an employee to list six incidents in which the employee took action to improve the project management process, and then to rate himself or herself on a scale of 1-5 with respect to contributing to process improvement, the employee will produce some numerical result. But if I were to ask the same employee for a rating after requiring him or her to list 12 such incidents, that rating, on average, would be lower. The reason for this is that people include in such assessments the difficulty of recalling the incidents. Since recalling 12 incidents is more difficult than recalling six, the ratings produced for the 12-incident self-assessment are likely lower, on average, than were the ratings for the six-incident assessment.
Although it's safe to assume that some employers intentionally exploit the Availability Paradox to reduce pressure from employees for increasing compensation, the consequences of this bias are disturbing for both employee and employer. Because the consequences most likely to be overlooked are negative consequences for employers, I offer below three suggestions of possible negative consequences for employers who rely on biased self-assessments of employee performance.
- Underestimation of employee effectiveness
- To the extent that biased employee self-assessment data influences employer estimates of employee effectiveness, employers might underestimate the overall effectiveness of existing staff. Those employers who believe (mistakenly) that self-assessments are inherently biased in favor of employees are more likely to be harmed by the Availability Paradox. These effects can lead employers to hire or retain more staff than necessary, or to assign excessive staff to critical projects, which can lead to a self-fulfilling prophecy of low productivity.
- Trepidation about taking reasonable risks
- Employees who underestimate their own effectiveness can experience a lack of confidence that can reduce their inclination to take reasonable risks. When this reluctance expands to the organizational scale as a result of the performance management system, it can reduce overall organizational effectiveness by making the organization generally and unreasonably risk averse. These effects might be temporally correlated with — but lag slightly behind — annual performance review processes.
- Favoring less honest, less capable employees
- Some organizations use performance management system data regarding employee effectiveness to determine how to advance employees' careers. These organizations are at risk in two ways. First, employees who are more capable than their performance records would indicate are more likely to terminate voluntarily when they secure more promising career advancement opportunities. Second, employees who are willing to engage in puffery, exaggeration, and dissembling in their self-assessments are more likely to be rewarded than are their more honest peers, all other factors being equal. The result of these phenomena is a skewing of the employee population away from honest, effective people, and toward less honest, less effective people.
In some sense, organizations that intentionally exploit the Availability Paradox probably get what they deserve. But other organizations would be well advised to abandon procedures that carry any significant risk of the Availability Paradox, and to do what they can to correct for it in all processes that contain self-assessment activities. Top Next Issue
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Forthcoming issues of Point Lookout
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