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Sales Wolf Blog

McKinsey's Four Biases as Found in Talent Management

Posted by Chris Young

Jul 7, 2008 6:08:00 PM

Hopeless_4 Dan McCarthy of the Great Leadership Blog (a great read - put it on your reading list!) has a post up referencing a recent McKinsey Quarterly study about the four biases that lead to failure.  Dan provides some great examples of these biases leading to well known business failures.

What really struck me most about the McKinsey study was how universal the biases were to businesses of all shapes and sizes.  Naturally I felt inclined to look for ways in which these biases lead to hiring and talent management blunders.  The following are McKinsey's four biases and how they manifest themselves in field of talent management:

Bias 1: Confirmation Bias - Managers often assume that an employee or new-hire is doing well in their job when in fact they are not.  The most frequent culprit for this failure causing bias is the absence of performance metrics to alert a manager that a particular employee is not doing well.  Often it seems easier to assume the best as opposed to setting up a proper measurement system to know for sure... (sigh.)  This invariably leads to reduced organizational performance.

Bias 2: Sunk Cost Fallacy - It isn't cheap to source and hire a new candidate as interview time, relocation costs, sign on bonuses etc. can add up quickly.  For this reason many are reluctant to pull the plug on an under performing new-hire because so much has been invested into the acquisition of this individual.  Instead of letting Fred go, many managers hold on and hope he'll come around.  Another unfortunate action that ultimately reduces firm performance.

Bias 3: Escalation of Commitment - If a team member isn't working out or isn't fit for the job, some managers make great efforts to help them succeed.  The truth is that in many instances no amount of training, coaching, mentoring, or even praying can undo the hiring of an individual who just isn't fit for the position.  In this case a manager's well intentioned efforts only delay and make even more difficult the termination of a poorly performing team member.

Bias 4: The Anchoring and Adjustment Bias - When an organization or a manager realizes that an employee isn't going to work out, numerous hours are often devoted to discussion as to how to fire Fred, when to do it, any severance payments that will be offered, and when recruitment/HR can start looking for a replacement.  Somehow it seems that the minor, tactical details always take center stage when a better use of a manager's time would be to find out what went wrong with Fred and how a better hiring decision can be made when finding his replacement. 

Are you aware of the talent management biases that are keeping your organization or department from Maximizing Possibility?  If you look around I'm sure you'll find some right under your very nose.  The real question is what are you going to do about it? 

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