Humans: Predictably Irrational

By: Keaton Fletcher

Humans are predictably irrational, and organizations can capitalize upon this fact to enhance the working experience as well as their own profits. In a recent podcast, Tim Dickson, on behalf of McKinsey & Company, hosted Julia Sperling, Anna Güntner, and Magdalena Smith to talk about a variety of ways organizations can influence the predictably irrational behavior of their employees.

First we must acknowledge that humans are neither rational, nor entirely unpredictable. Part of this fact stems from the process by which the human brain narrows the roughly 11 million unique pieces of input it receives at any given point down to about 50, of which only 7 to 10 are retained in conscious short term memory. This filtration process means a lot of information is either left entirely un-perceived, or is processed at a level below the conscious mind. Organizations can provide information that makes it past the initial mass filtration, but does not find its way into short term memory, and therefore has a subtle influence on behavior, a tactic called nudging. Nudging holds great promise in promoting or inhibiting behaviors (e.g., wearing safety gear) by creating an environment which pushes workers toward this behavior without them feeling as if their choices are being restricted or even influenced. It is, to a degree, the same way theme parks have a subtle way of pushing people in a specific path around the park to minimize congestion without parkgoers noticing they are being manipulated.

Beyond nudging, organizational leadership and employees alike need to be aware of some of the irrational behaviors and beliefs that are common in the workplace so as to actively avoid them. The podcast briefly describes phenomena such as ingroup bias in which we prefer to interact with, and be surrounded by, individuals from our own group (whatever that might be). As such when making hiring or promotion choices, managers may find that left to their own devices they fail to bring in new ideas or perspectives, instead favoring candidates who are very similar to themselves. When interacting with others we tend to look towards our peers and superiors for information; often, we find our opinions align with what the majority or the high-status individuals suggest. This agreement is not because we initially agreed, but because when we are in ambiguous situations we treat other people’s opinions as helpful information that our brains nonconsciously incorporate into our own beliefs. The guests of the podcast suggest that to combat this, in group meetings, individuals should write their opinions down first or that those of high-status should not be allowed to chime in until others have had a chance to do so.

In one of the greatest predictable irrational choices of the workplace, we consistently find that money is not a great motivator. As long as you are earning a competitive wage, additional money will not necessarily translate into improved performance. Instead, to influence your motivation, organizational leadership should provide you with opportunities to feel accomplished or in control, or give you opportunities to interact with others.

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