In order to advise these parties effectively we need to look at the situation they have found themselves in. The first thing to consider when assessing this question is the….
The case suggests that the performance evaluation data (PAS, personnel audit, and the impressions and opinions of the group members) had several problems. From the perspective of the decision-making biases, analyze how the characteristics of the performance data were likely to affect the decisions made by the Carter group. In your analysis, cite specific problems with the data and how they relate to the decision-making biases that we discussed in class.
•Loss aversion: Webster had a culture that promoted employee loyalty at all costs. “In more than one instance, Webster had kept an employee long after alcoholism had impaired his or her effectiveness, primarily because of top management’s feeling that the person had no other place to go.” This culture affected the type of feedback granted in the PAS process and skewed the data to show better employee performance on the evaluations than Webster was actually experiencing.
•Illusion of transparency: Take Ray Pearson as an example, “Though is performance had been unsatisfactory for at least the last 10 years, he was not given any negative feedback unit the fall of 1974.”
•Anchoring: Webster rank and file suffered from anchoring in the inflated results of their evaluations. Imagine how Ray Pearson’s would have assessed himself he were not overconfident in his performance (which, unfortunately for Ray, was likely a result of his managers’ unwillingness to give truthful feedback).
•Sampling on the dependent variable: the participation in the PAS evaluation process is poor at best. It could be possible that – notwithstanding the transparency issues – only the good performers submitted evaluations and the poor performers avoided the process altogether.
•Illusion of transparency bias: while the audit doesn’t create this bias, Jack Bryant’s process fails to effectively resolve discrepancies between a subordinate’s perceptions of her performance and her manager’s evaluation of performance.
•Confirmation bias: Again, the group has been immersed in a culture that prioritizes years of service over performance. Cecil Stevens leads the discussion with using seniority as the first criteria to make separation decisions. The group likely confronted confirmation bias towards weighting that criterion more heavily when weighting the other criteria (e.g. performance, potential, etc.).
•Escalation of commitment: Take for example the counter-intuitive message given to Bob Carter by Ike Davis (superior). “These men have too much service to be treated as you have proposed.” It seems to me that despite Carter’s reasoned desire to demote individuals, the organization “doubled-down” on its message of loyalty as the most important consideration in making personnel decisions.