How Input Bias Affects Business Decisions

Leaderlog has a very interesting post on input bias, that references this article from Wharton.

Fans of the hit TV comedy "The Jerry Seinfeld Show" may remember an episode in which Jerry's friend George leaves his car parked at work so that the boss will think George is putting in long hours, even when he's not.

The idea, of course, is that George's apparent productivity will net him a better performance review and a higher raise or bonus.

Wharton professor Maurice Schweitzer would call George's behavior "an attempt to invoke the input bias – the use of input information (in this case the false impression of long hours) to judge outcomes.

Researchers ran several experiments to verify that this bias existed. Here are the details of one of them:

In their fourth experiment, Schweitzer and Chinander examine the link between input quantity and perceived outcome quality for very low quality outcomes. "We expect that when decision makers experience a very low quality outcome they will think more critically than they do when they experience a high quality outcome, and hence may disassociate high input quantities with good outcomes," they write.

To test that hypothesis, the researchers asked participants to compare raspberry and lemon tea in one of two conditions – a high quality condition where one third cup of sugar was added to two quarts of each kind of tea, and a low quality condition where one tablespoon of salt and a half cup of lime juice was added to two quarts of each kind of tea.

Participants were told before their taste test that both samples of tea were "made with similar ingredients. However the ingredients were mixed and brewed differently." Tea A was made using expensive machinery and Tea B was made using inexpensive machinery. The facts were reversed for the other two instances.

"Consistent with prior results, preference ratings in the high quality conditions were higher when the raspberry tea had a high input description," the authors write. "The pattern of results, however, does not characterize ratings in the low quality conditions. In this case average ratings when the raspberry tea had a high input description were similar to the average ratings when the raspberry tea had a low input description.

People who work long hours are looked upon as big-time producers, and sometimes they are, but sometimes they are dolts who can't finish their work in a 40-hour week like all their coworkers. Managers don't always know the difference, and the dolts sometimes get promoted.

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This also plays out in hiring decisions. We usually assume that the person with more years of experience is the better hire, but that is not always the case. That is why I tend to lean towards the hire for attitude, train for skill camp.