How Often Should You Use Your Gut Instinct? How About Never?

Why do tests predict job performance better than interviews?  Because interviewers let their “gut instinct” cloud their judgment and introduce lots of related bias. 

This recent article suggests (without any data to back it up) that sometimes we should just trust our gut because it is better at predicting the future than our analytical mind, which is better at predicting the past.  Huh?  Our instant reactions to something make us psychic?

In Nobel Prize winner Daniel Kahneman’s book Thinking, Fast and Slow he summarizes decades of research on decision making.  He describes our fast, “gut instinct” thinking as System 1.  Let’s talk about a few of the reasons why this kind of decision making leads us to poorer decisions:

  1. System 1 thinking is highly influence by irrelevant numbers.  For instance, valuing something at a higher price if the first cost is presented at $50,000 than if the first cost is presented at $25,000.

  2. This level of thinking leads us to make judgments based on how easily we can think of examples.  When we can think of those instances, we give them higher probabilities of occurring.

  3. Our gut is overconfident—it assumes we have more control than we do.  Kahneman explains that System 1 decision making involves only our own experiences, which are a small and does not account for randomness.  Despite the article above saying that our gut instincts are forward thinking, it is just the opposite.  System 1 thinking assumes that what I experienced before is a far greater predictor of the future than it is.

If your instinct tells you that an upcoming decision is wrong, don’t just trust it.  Do some research and/or talk to others and see if you are falling into a System 1 pitfall. 

We rarely have 100% of the data we want before making business decisions.  But, throwing away what we have because going in another direction “feels” better is not a recipe for success. 

Let’s put this in a selection context.  Our gut tells us that people who are similar to ourselves in background and experience are the best hires.  Slower thinking tells us to look at other factors, such as skills and abilities before making such decisions.  And when we do so, we make better hiring choices.

Going with your gut instinct It may sound sexy and empowering, but it is not effective.  Our slower System 2 (per Kahneman) processing system, despite its own set of biases, is more likely to lead us in the right direction.

Skills of the Future

The nature of work has always changed and will continue to do so.  This report from the World Economic Forum outlining trends and predictions came out a year ago.  I find its conclusions as true today as they were when it was first published.  It is a bit of a long read, but does break things out by country which shortens the time required a bit.

The net of the study is in the table below.

The Declining skills are instructive.  Not surprising, the list contains skills which are being automated (management of resources, quality control, manual dexterity, etc.).  Others are in response to a change in workplace culture which places higher value autonomy (management of personnel).  We can have a separate conversation as to what it means that active listening is on the Declining list.  What that leaves us with (see the Trending column) are the skills that are becoming more important in the near future.  Innovation and learning top the list with plenty of problem solving skills.  Seeing emotional intelligence on the list made me throw up in my mouth a bit, but there is no surprise about social influence.

The practical aspect of the report is to get us thinking about the skills that we really need for jobs in the 2020’s.  As we automate more, how does that change our expectations of employees?  At McDonald’s, automation means more interaction between staff and guests.  With managers being freed from coordination and time management, what is it that we will want them to do?

Here’s how to keep up:

  1. You probably need to review your job descriptions more often than you think.  And you should definitely do so after introducing new technology.

  2. Updated job descriptions should feed into your recruitment process.  Be sure that you are not advertising for yesterday’s jobs.

  3. The Trending list throws down the gauntlet as to how we select candidates.  Whether it be updating tests, interviews, or what we look for on resumes, knowing that we need more creativity and leadership, and less management, from those who direct the activities of others is a BIG difference.  If our selection tools are to be valid, they need to keep up with changing jobs.

By making these updates, we can drive the recruitment and selection of employees with the right skill sets.  It also provides us with a framework of being ahead of futures skill changes.

The Wells Fargo Avalanche

My summer posting hiatus is almost up.  In the meantime, here’s a good read:

https://www.linkedin.com/pulse/wells-fargos-avalanche-dennis-adsit?trk=mp-author-card

Dennis beat me to the punch here.  5,300 people (at least) doing something wrong is not some individual act of malfeasance, Lucky Patcher for Android.  They only did it because a) they were encouraged/incented to or b) they had little or no fear of getting caught and punished for gaming the system.  That is the product of culture.

How Much of the Cow do you Have to Buy First?

In June I commented on an NY Times interview with a small business owner about giving prospective employees job tryouts (essentially paid internships) before bringing them on full-time. Recently, another article appeared covering most of the same ground, though in a bit more detail as to the logistics of the process, especially if the person looking for the job is currently employed.

As is the norm of reporting in this area, the author does not refer to pre-employment screens that are much more valid than, “the traditional hiring process — résumés, interviews, references…” This gives the false impression that your only choices for evaluating candidates are methods with relatively low predictive accuracy or hiring them for a month first. This is, of course, untrue. There are job simulations that can be purchased or even developed for far less than hiring someone for a month, even as a contractor.

Of course, the presumption is that any pre-employment test or screen can be “faked” and that a month on the job gives a person a chance to show their true colors. I would argue that the validity of a job tryout is not that much higher than a well designed half-day (or so) simulation. This is because simulations can be objectively scored by trained raters. Unless an employer is going to make a decision based on objective data (e.g., sales), all types of bias would be introduced into a job tryout. Don’t think so? Then why is there so much accuracy problems with performance appraisal/evaluation?

The article quotes employers saying that they learn a lot about a person’s work habits and personality (e.g., are they abrasive) during the tryout. All true, but it doesn’t take a week or more to do that.

The business case for using an assessment instead of a job tryout is pretty straightforward:

Cost of meaningful assessment (even a simulation) for 7 people (one example described in the article): <$7,000
Cost of job tryout: $25/hr x 100 hours x 7 =$17,500 (this does not account for any loss of productivity, and it’s an added cost as in the article they indicate that an equivalent worker is given paid vacation during the tryout)

I’ll grant you that a multi-day tryout is potentially more valid than a ½ day assessment. But that is only true if there is an objective evaluation process during the trial period. Even with that, I would doubt that it is 250% more valid.

The article strikes me as another example of tech startups trying to reinvent the wheel when it comes to hiring. Google did this for a long time with their ridiculous brain teasers. I get it—you’re smart and your ideas and innovations are going to change the world. But, just like apps and hardware are built on pre-established research in electronics and computer science, there are well founded principles in the science of hiring employees as well. Use them!

What are your creative ideas for evaluating candidates?

For more information on legal pre-employment testing, skill assessments, and Assessment Centers, please contact Warren at 310 670-4175 or [email protected].

Happy Holidays!

No “real” post this week as many of you are (hopefully) taking some vacation time.

I hope that you enjoy the holidays with family and friends!

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