Judging employees on results could reward luck over skill, argue top psychologists, and there’s a better way to do it

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Evaluating people’s results, as opposed to the effort they put in, may penalize bad luck and reward good luck.
That’s according to top behavioral economists such as Daniel Kahneman and Dan Ariely.
What’s more, says psychologist Barry Schwartz, prioritizing results over process can hurt the quality of people’s work in the long run.

In most workplaces today, you don’t earn an “A” for effort.

If you failed to make a sale even though you sat at your desk for hours every day calling clients, it’s hard to believe you’ll get a pat on the back — or a promotion. Results matter.

But top psychologists argue that this system of evaluating performance is heavily flawed.

At the World Business Forum in New York, Daniel Kahneman told the audience that organizations should evaluate employees’ process instead of their outcome.

Kahneman won the Nobel Prize in 2002 for his pioneering work in behavioral economics; in 2011 he published the bestseller “Thinking, Fast and Slow,” in which he explored the intricacies of human decision-making.

Read more: A Nobel Prize-winning psychologist says the most successful decision-makers know how to use their gut feelings in a way the rest of us don’t

“The quality of people’s decisions doesn’t determine the outcome,” Kahneman told the WBF audience. “You can make a very good decision and get a bad outcome because of bad luck. You can make a bad decision and get a good outcome because of good luck.”

So when managers reward results and ignore effort, Kahneman said, “very often you are going to penalize bad luck and reward good luck.”

Kahneman’s argument recalls something Dan Ariely, a professor of psychology and behavioral economics at Duke University, told Business Insider in 2016. Ariely had just published his book on human motivation, “Payoff.”

Ariely said that the best way to motivate kids to achieve success is …read more

Source:: Business Insider


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