Organizational change programs encounter disruptions resulting from employee mood swings and cognitive biases. These unsettling situations distort the employee’s ability to properly reason, evaluate impediments, and make good decisions.
Different cognitive biases are exhibited at each phase of a change journey, creating a sequence of moods and mindsets as change unfolds. Managers have the responsibility to manage their employees change expectations to plan and help minimize personal biases.
Cognitive Bias: Definition
Cognitive Bias is a methodical pattern of deviation from norm or rationality in judgment. Individuals create their own subjective social reality from their perception of the input. An individual’s construction of social reality, not the objective input, may dictate their individual behavior in the social world. Thus, cognitive biases may sometimes lead to perceptual distortion, inaccurate judgment, illogical interpretation, or what is broadly called irrationality.
Some cognitive biases are apparently adaptive. Cognitive biases may lead to more effective actions in a given context and enable quicker decisions when timeliness is more valuable than accuracy, as shown in heuristics. Other cognitive biases are a “by-product” of human processing limitations, resulting from a lack of appropriate mental mechanisms (bounded rationality), or simply from a limited capacity for information processing.
Cognitive Bias: Examples
Shown below are examples of recognized cognitive biases that may influence work place employees.
Anchoring Bias is the common human tendency to rely too heavily on the first information identified (the “anchor”) when making decisions. During decision-making, anchoring occurs generally when individuals use an initial element of information to make subsequent judgments. Once an anchor is accepted, other judgments are made by adjusting away from that anchor, and there is a bias toward interpreting other information around the anchor.
The Ambiguity Bias effect is a cognitive bias where decision-making is influenced by a lack of information, or “ambiguity”. The effect implies that people tend to select options for which the probability of a favorable outcome is known, over an option for which the probability of a favorable outcome is unknown.
Confirmation Bias, also referred to as confirmatory bias or myside bias is the human tendency to search for, interpret, favor, and recall information in a way that confirms one’s preexisting beliefs or hypotheses. It is a type of cognitive bias and a systematic error of inductive reasoning. People display this bias when they gather or remember information selectively, or when they interpret it in a biased way. The effect is stronger for emotionally charged issues and for deeply entrenched beliefs.
Confirmation Bias is a variation of the more general tendency of apophenia. In psychology, apophenia is defined as the perception of connections and meaningfulness in unrelated things. Apophenia can be a normal and habitual phenomenon or an abnormal one, as in paranoid schizophrenia when the patient sees ominous patterns where there are none.
Loss Aversion Bias in cognitive psychology and decision theory refers to people’s tendency to prefer avoiding losses versus acquiring equivalent gains: it is better to not lose $100 than to find $100. What distinguishes loss aversion from risk aversion is that the utility of a finnacial payoff depends on what was previously experienced or was expected to happen.
Negativity Bias also known as the negativity effect, refers to the notion that, even when of equal intensity, things of a more negative nature (e.g. unpleasant thoughts, emotions, or social interactions; harmful/traumatic events) have a greater effect on one’s psychological state and processes than neutral or positive things. Basically, something very positive will normally have less of an impact on an individual’s behavior and cognition than something equally emotional but negative.
Normalcy Bias, or normality bias, is a belief people hold when facing a disaster. It triggers people to misjudge the likelihood of a disaster and its potential effects, because people believe that things will always function the way things normally or traditionally functioned. This may result in situations where people fail to appropriately prepare themselves for disasters, and on a larger scale, the failure of governments to include the populace in its disaster preparations.
Optimism Bias, also known as unrealistic or comparative optimism, is a cognitive bias that results in an individual to believe that they are at a lesser risk of experiencing a negative event compared to others. Optimism Bias is common human bias and transcends gender, race, nationality and age.