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Making decisions – how we do it and why we are not objective in the process

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Make decisions
– how we do it and why we are not objective in doing so

The power of psychological effects

How do you actually make your decisions?

Our lives are made up of decisions. As soon as we grow up, we make decisions and have to live with the consequences. As a manager, we have even more responsibility: we make decisions that others have to live with and on which the weal and woe of our company depends. We are sure that we are rationally weighing up the pros and cons of our decision options – but is that really the case? Do you really always make your decisions objectively and well thought out?
Let’s take the personnel decision as an example: is it possible to make an objective decision on the basis of application documents and an interview as to whether a candidate is suitable or not?
Research clearly contradicts this: it has been proven many times that there are numerous unconscious mechanisms that influence our decisions and make them subjective – so-called psychological effects. We will take a closer look at these in this article.

 

Daniel Kahnemann and the decision-making process

Countless researchers have been studying these patterns and the basis on which we humans make decisions for decades. One of the leading minds in this field is theUS psychologist Daniel Kahnemann, whom Die Zeit calls “perhaps the most important psychologist of our time”. Together with his colleague Amos Tversky, who died in 1996, he refuted the erroneous assumption that decisions in business were based on facts. Kahnemann and Tversky shaped the field of behavioral economics; they investigated anomalies in decision-making in the areas of economics and finance. In his highly recommended, comprehensive book “Thinking Fast, Thinking Slow”, Kahnemann shows how the decision-making process works and which non-fact or reason-based decision-making mechanisms(heuristics) we fall back on.
Roughly speaking, it is based on two decision-making systems:
  • System 1
    makes decisions intuitively, quickly, unconsciously, controlled by emotions and is vital for survival. Unfortunately, System 1 is prone to errors.
  • System 2
    refers to the lengthy, rational deliberation involving facts, which makes fewer mistakes, but is less used because it is cumbersome and tiring.
His work earned Kahnemann the Nobel Prize in Economics in 2002. A formative sentence by Kahnemann:
“People are not used to thinking hard.”
Anyone who has to make a lot of decisions should look into the psychological background to decision-making. Let’s look at some of the psychological effects that unconsciously influence our judgment of people.

 

Decisions: The first impression. Primacy effect.
  • The first impression (primacy effect)

We decide whether we like or dislike someone unconsciously – and very quickly: we decide whether we like someone or not within 100 milliseconds. We use the time after the first impression to substantiate, justify and rationalize our approval or disapproval. This is proven by the study “First impressions” by US researchers Janine Willis and Alexander Todorov from Princeton University: Even if you have more time – the first impression remains formative.
Smells and body language are decisive for the first impression, the so-called primary effect.
Italian researcher Tessa Marzi from the University of Florence and her team discovered that our brain first forms an impression of whether the person appears trustworthy or not. This fast, unconscious process is evolutionary, because in some circumstances it is vital to be able to assess at lightning speed whether you are facing a friend or an enemy.
The primacy effect is a psychological memory phenomenon: information that is absorbed first remains present, whereas other relevant information fades into the background due to its later timing.
To illustrate the primacy effect, here is an example test from the aforementioned psychologist Daniel Kahnemann.

 

Please read quickly and judge spontaneously who you like better:
– Alan is intelligent, hard-working, impulsive, critical, stubborn and jealous
– Ben is jealous, stubborn, critical, impulsive, hard-working and intelligent
Studies show that most people think Alan is more likeable, even though the adjectives associated with the two names are the same, just in a different order.
  • The last impression (recency effect)

The last thing that is said or done is also remembered much more clearly than everything that is communicated in the time between the beginning and end of a contact. Like the primacy effect, the recency effect is a distortion of memory. Information that is perceived most recently or recent events are remembered preferentially – and thus used disproportionately to form judgments. Advertising takes advantage of this: The most important messages, the ones that should be remembered, always come at the end.
  • The halo effect

 

Frederic L. Wells discovered the halo effect as early as 1907. Halo is the English word for halo. The halo effect describes a particularly obvious positive characteristic that – like a halo – outshines other characteristics: once you find a person likeable, it is easier to ignore unpleasant characteristics. And that’s not all: people often attribute other positive qualities to the person concerned that they don’t actually have. For example, an applicant for a job who has made a pleasant first impression is automatically seen in a better light, e.g. is more likely to be considered competent than applicants with the same qualifications, which has a disproportionate effect on the overall impression.

 

  Decisions Mini Me effect
  • The mini-me effect

The US sociologist and professor of business administration Rosabeth Moss Kanter from Harvard Business School discovered the mini-me effect in 1977. She found that there is a tendency towards similarity in selection procedures, because people trust similar people more quickly. – Which means that people tend to choose those people who are most like themselves. It can be about external similarities, origin, the same university or the same hobby, it can be about personality traits, but also about ethnicity or gender. So men unconsciously tend to hire men the most. The mini-me effect, also known as the clone effect, is cited as one of the main reasons why top positions are still mainly held by men.

 

  • The chameleon effect

With the chameleon effect, the counterpart also appeals through similarity, but here through similarities in behavior. If one person adapts to the other in terms of body language, way of speaking and manner of expression, this creates sympathy. This type of mirroring is also called mimicry or – in NLP – rapport. This usually happens unconsciously, but of course this effect can also be used manipulatively if it is mirrored discreetly and unnoticed. Those who consciously or unconsciously use the chameleon effect have an advantage.
Psychologists Piotr Winkielman, Liam Kavanagh, Christopher Suhler and Patricia Churchland from the University of California in San Diego found that mirroring unfriendly, aggressive or dismissive behavior is rather counterproductive, as it does not create the desired sympathy.

 

  • The Rosenthal effect

The Rosenthal effect is one of the strongest known effects. It’s about the “self-fulfilling prophecy”: in other words, we modify our behavior in such a way that we promote the fulfillment of our expectations.
Back in the 1960s, the American psychologist Robert Rosenthal examined the effects of our attitudes and expectations on situations. In 1965/66, he and Lenore Jacobson conducted an experiment in elementary school: They gave teachers the names of pupils who they predicted would improve their performance, as they wanted to find out by means of a test. However, these students were selected by lot. Later tests showed that the performance of these – purely randomly selected pupils – had increased particularly markedly. This led to the conclusion that expectations of students had led to them being judged and treated differently.
If an applicant manages to raise positive expectations, the Rosenthal effect will help. And of course this also works the other way round: if an applicant enters the interview with positive expectations, they are perceived as more competent than someone with the same skills who expects a negative outcome.
What we expect a person to be like influences our actions and our communication with them. And this in turn influences the behavior of this person in the direction of what is expected. The Rosenthal effect is also known as the Pygmalion effect.
Recency effect and Rosenthal effect

 

Psychological effects in everyday life

Incidentally, these psychological effects are pointed out in job interview guides. This provides job applicants with tricks and tips on how they can make targeted use of these effects vis-à-vis the recruiter.
As you can see, we don’t always make our decisions rationally. Psychological effects have a great influence on our actions without us being aware of it.
In everyday life, pay attention to how you react to other people, what you feel – and reflect: What psychological effect could be at play here?

 

Links and resources on the subject of making decisions and psychological effects:

Decision-making and psychological effects – these are interesting topics that you may want to learn more about.

 

We have compiled a list of relevant articles for you here:

 

Collection of articles on Daniel Kahnemann and decisions

  1. Clearer thinking
  2. Psycho tricks for the job interview
  3. Job interviews: cheeky brat or worker bee?
  4. Applicant selection – a rational or an emotional decision?
  5. How two psychologists changed the way we think
  6. Scare of the economists

 

Would you like to know more about psychological effects?

 

Here are some literature recommendations:

  • Rosabeth Moss Kanter (1977): Men and Women of the Corporation.
  • Daniel Kahneman (2012): Think fast, think slow. Siedler Verlag: Munich

The authors

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Oliver Grätsch
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Michelle Templin
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Christian Grätsch
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Matthias Beikert
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Susanne Grätsch
Monika Bt 550x550
Monika Steininger
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Kai Hübner
Philipp Andresen 500x550
Philipp Andresen
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Anna Isabell Arendt
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Dr. Claudia Schmidt
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Inga Kühn
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Kassandra Knebel
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Claudia Lehmann
Komplettes Team

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