BUS272 TB

420 Part 4 Sharing the Organizational Vision
has been compromised. For instance, when a prospective employer asks how much you
were making in your prior job, your answer typically anchors the employer’s offer. You
may want to keep this in mind when you negotiate your salary, but remember to set the
anchor only as high as you realistically can. The more precise your anchor, the smaller
the adjustment. Some research suggests that people think of making an adjustment
after an anchor is set as rounding off a number. If you suggest a salary of $55 000, your
boss will consider $50 000 to $60 000 a reasonable range for negotiation, but if you
mention $55 650, your boss is more likely to consider $55 000 to $56 000 the range
of likely values for negotiation. 30
Confirmation Bias
The rational decision-making process assumes that we objectively gather information.
But we don’t. We selectively gather it. The confirmation bias represents a case
of selective perception. We seek out information that reaffirms our past choices, and
we discount information that contradicts them. 31 We also tend to accept at face value
information that confirms our preconceived views, while we are skeptical of information
that challenges these views. Therefore, the information we gather is typically biased
toward supporting views we already hold. This confirmation bias influences where we
go to collect evidence because we tend to seek out sources most likely to tell us what we
want to hear. It also leads us to give too much weight to supporting information and too
little to contradictory information. 32 We are most prone to confirmation bias when we
believe we have good information and strongly hold our opinions. Fortunately, those
who feel there is a strong need to be accurate in making a decision are less prone to
confirmation bias.
Availability Bias
The availability bias is the tendency for people to base their judgments on information
that is readily available. 33 Recent research indicates that a combination of readily
available information and our previous direct experience with similar information is
particularly impactful to our decision making. Events that evoke emotions, that are
particularly vivid, or that have occurred more recently tend to be more available in
our memory. As a result, we tend to overestimate unlikely events, such as being in an
airplane crash, suffering complications from medical treatment, or getting fired. 34
The availability bias can also explain why managers, when doing annual performance
appraisals, tend to give more weight to the recent behaviour of an employee than to
that of six or nine months ago.
confirmation bias The tendency
to seek out information that reaffirms
past choices and to discount information
that contradicts past judgments.
availability bias The tendency for
people to base their judgments on
information that is readily available to
them rather than complete data.
escalation of commitment An
increased commitment to a previous
decision despite negative information.
Escalation of Commitment
Some decision makers escalate commitment to a failing course of action. 35 Escalation
of commitment refers to staying with a decision even when there is clear evidence that
it’s wrong. For example, a friend has been dating a man for about four years. Although
she admits that things are not going well, she is determined to marry him anyway. Her
justification: “I have a lot invested in the relationship!”
When is escalation of commitment most likely to occur? A 2012 study indicates that
it tends to occur when individuals view themselves as responsible for the outcome.
The fear of personal failure even biases the way we search for and evaluate information
so that we choose only information that supports our dedication. We might, for
example, weight opinions in favour of reinvestment as more credible than opinions
for divestment. 36
A 2012 meta-analysis revealed some interesting findings about what causes us to
escalate our commitment after initial failure. First, it does not appear to matter whether
we chose the failing course of action or it was assigned to us—we feel responsible and
escalate commitment in either case. Second, the sharing of decision authority—such as
when others review the choice we made—can lead to higher escalation of commitment