Types of Decision-Making Biases (And How To Recognize Bias)
Updated July 21, 2022
In any workplace, there will likely be many situations where managers or employees need to make an informed business decision. Both critical thinking and an assessment of the different outcomes from various decisions are necessary to make a decision that will produce the desired outcome. However, sometimes without realizing it, decision-makers hold some bias during their decision-making process. In this article, we explain what decision-making biases are, explore the different types of biases, provide steps for how you can recognize your own biases and share some tips for preventing decision-making biases.
What is bias in decision-making?
When you have bias in decision making, it means you make your decision based on what is usually subconscious processing of your previous experiences and prior knowledge. These mental shortcuts can impact how you make your decisions and can result in a decision that's different from what you'd make if biases weren't present. Biases differ by the individual and their unique personalities and experiences.
9 types of decision-making biases
Explore this list of biases in decision making so you can better understand any you may have:
A self-serving bias is one that promotes your self-esteem and helps you feel better about the position you're in to make a decision. When you engage in a self-serving bias, you may unintentionally make decisions that benefit yourself over other employees, customers, clients, vendors or the organization and its goals.
There is often a certain level of confidence that comes with hearing an authority figure present information or ideas. Authority bias happens if you favor your authority figures' input over others, despite there being information and opinions that are more sound and relevant to the problem you're attempting to solve.
Confirmation bias is when you have existing beliefs and place more emphasis and value on information that supports those beliefs. For example, you may only review data that supports your hypothesis and seek materials that match your viewpoints, as well as reject any other information that defies your assumptions and beliefs. Without viewing all the information you have or questioning the beliefs you hold, you could be at risk of making a decision that's not best for the organization.
Anyone who's offering you the information you need to make an informed decision likely has their own way of presenting it. They make discuss it with you formally in a scheduled meeting, email you a report or simply mention a relevant piece of information in passing. Framing bias is when you make a decision based on how the presenter has shared the information because you, for example, may unintentionally assume that a well-designed presentation is more trustworthy than a simple email.
The overconfidence bias may occur if you're too confident in your intelligence, assumptions or ideas, frequently without the knowledge or experience to prove why your confidence is so high. Overconfidence bias can cause you to ignore the other options, take risks with your decisions and assume that your expectations are correct without using other means to verify them.
You may already know first impressions are important for several reasons, but they can also affect how you make decisions. Anchoring biases are based on a person's natural tendency to gravitate toward the first piece of information they receive and allowing themselves to become influenced by it. This is the most common type of bias if you feel stressed or are short on time to make a decision.
Availability bias is based on the first information that's readily available in your memory. For example, you may remember something from many years ago, assume it's of significant importance and based your decisions on that memory. Availability bias also considers the most recent information you may have received from a trustworthy individual. Those who have availability bias may convince themselves that the first idea they've had toward the decision is the best one and therefore miss out on evaluating other options.
One of the largest hindrances to creativity is conformity bias, which is when you make a decision based on what the majority decides. This can hinder your ability to form a difference of opinion or have an open discussion about the decision with your colleagues. While many employees may have problem-solving abilities, conformity bias can strip them of this skill as they all conform to the same way of thinking.
Feature positive effect
The feature positive effect can be detrimental to your decision-making because this bias occurs when you focus only on the positive benefits of your decisions versus weighing the negative effects alongside them. This can result in missing pertinent information you need to make a decision that'll help the organization meet its goals. You may elicit the feature positive effect when you have limited time or a small amount of information available to you.
How to recognize bias in decision making
Follow these steps to recognize bias in your own decision making:
1. Analyze your past performance
You should be able to reflect on your previous decisions and outcomes to see if there are trends in any relationship between the two. For example, you may notice that you overestimate the projected sales for every quarter and that you're almost always off base. This can indicate that you historically carry an optimistic bias where you remain confident, despite a lack of evidence, that the results will be more favorable than they really end up.
2. Ask for feedback
Even if you have certain biases that affect your decision-making, it doesn't mean a coworker or manager will have the same biases. Gathering new perspectives on your decision-making abilities can help you recognize biases and prevent them in future decisions.
3. Evaluate others
It's almost inevitable that an individual's biases will have an impact on their decisions, so if you are able to evaluate each other, you may find that recognizing biases as an outsider is easier than when you're examining yourself. The more you do this, the better able you'll be to recognize your own biases before you allow them to affect your decision process.
4. Take the time to decide
If you're rushing to make a decision, the chances are higher that you'll be unable to recognize your biases. Instead, take a reasonable amount of time and however long you're allowed to come to a decision and make sure you're deciding when you are free from stress and have few impending deadlines.
Tips to prevent bias in decision making
Review these tips to keep biases at bay during your decision-making process:
Understand the effects of bias. The more you understand the impact of bias on decision-making, the more likely you'll be to watch for biases that may hinder your ability to make an informed decision based on current facts.
Know what is influencing your decision. Before selecting a final decision, examine the factors that may be influencing your decision. When you're able to articulate what determined your decision, you can more readily realize if your decision came from bias.
Question your biases. Think about ways you can challenge your current biases to ensure they aren't part of your decision. Ask yourself important questions so you can think critically and make sure you aren't ignoring key information, missing some considerations or giving too much attention to one factor over another.
Use multiple sources. When developing your decision, consider asking others for feedback, collecting data and researching the topic you're deciding on so you have more information at your disposal. Be open to listening to various opinions and views so you can gather perspectives that may differ from your own.
Reflect on your previous decisions. Ask yourself if you've rushed to a decision before or have ever felt pressure to decide on something important within a certain timeframe. If you recognize that you've had some biases in previous decisions, you may recognize when you're about to do the same thing.
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