Unconscious bias – the blind spot threatening organisational performance

March 2023 | SPOTLIGHT | BOARDROOM INTELLIGENCE

Financier Worldwide Magazine

March 2023 Issue

Unconscious bias is a ‘blind spot’ created in our minds as we make quick judgments and assessments about other people and situations without fully realising we are doing so.

It is shaped by our own socialisation experiences, which can include upbringing and cultural environment from a very early age, which in turn influences the feelings and attitudes we exhibit toward others.

However, because these emotions sit below the surface, we rarely recognise how they inform the choices we make. From reference letters and interview panels, through to performance evaluations and award committees, unconscious bias plays a significant role in who we choose to hire and reward or punish and fire.

Individual perceptions and behaviours can be significantly affected by implicit stereotypes and preferences, even without the individuals’ involved intention or awareness. This is a key aspect of social cognition, the phenomenon where perceptions, attitudes and bias operate without conscious intention.

Sometimes these judgements are based on our beliefs about issues such as race, ethnicity, age, appearance and accent, to name a few. During our first steps into socialisation we develop specific frames of reference, called ‘implicit social cognition’.

These frames go on to shape our understanding of the world around us, our own place in it and the people we encounter.

All of these factors help us create both positive and negative mindsets toward other people, things, groups and ideas at a mostly unconscious level.

Known and unknown bias

It is essential to aspire to distinguish unconscious bias from known biases, which people usually conceal for fear of being politically inappropriate.

Known stereotypes are the result of intentional, conscious and controllable thoughts and beliefs, which are usually directed toward a perceived ‘type’ or group of people. An example of this could be ‘all teenage girls like wearing makeup’.

Unconscious stereotypes are associations learned through past experiences. This can be activated by a particular environment and operate outside of intentional conscious cognition. For example, you might unconsciously stereotype people who pursue goals primarily for material reasons, such as money, status or fame, are less likely to be successful and happy.

This stereotype could be associated with information learnt from a management book, but these associations may be misidentified, or even unknown by the individual who holds them, and will persist even when an individual explicitly rejects the stereotype.

Positive and negative unconscious bias creates unintentional discrimination, leading to poor decision making, which becomes a barrier to the creation of a truly diverse and inclusive workplace.

Our unconscious biases affect our perceptions of competence and effectiveness when hiring, promoting and developing people’s talent in the workplace.

Unconscious bias can sometimes become rooted in an organisation’s policies, structures and everyday work practices, shaping the company’s culture if left unchecked. For example, a rule that allows some employees to work from home can be seen as underperforming by others.

Other forms of hidden prejudice include affinity bias, which represents a tendency to act more warmly toward people who look, sound and behave like we do, while the halo effect is a tendency to think everything about a person is positive because we like them.

In addition, perception bias is the inclination to stereotype certain groups without being able to make objective decisions about them, and conformity bias leads us to search for or interpret information that confirms our existing perceptions or lean toward groupthink decision making.

Bias in performance evaluation can result in higher compensation costs for undeserving individuals. Indirect costs relate to the difficulty of making important decisions based on performance ratings and the impact of incentives on motivation.

All of these factors impact recruitment, succession, promotion and performance appraisals, and unconscious bias in the workplace denies many opportunities for diversity, sharing different ideas and embracing creativity that ultimately affect the bottom line.

Can companies operate without bias?

Although unconscious bias is difficult to eliminate, it can be considerably reduced. The best starting point is to recognise that everyone has it and analyse the way that you personally think about it.

Overcoming unconscious bias involves reflecting on the nature of preferences and prejudice, determining how this affects our ideas, and then committing to implementing practical strategies to counteract bias through behavioural change.

Bias is most effectively interrupted as we become more aware of what is happening beneath the surface. To achieve this, organisations should turn their attention to the long list of common unconscious biases, including: (i) affinity bias, also known as ‘like-likes-like’, which is the tendency to gravitate towards people who are similar to ourselves; (ii) ageism, which is discriminating against someone on the basis of their age; (iii) attribution bias, which involves seeing a particular person or group as being more or less competent than other groups or people; (iv) confirmation bias, which is a tendency to look for information that confirms beliefs we already hold; (v) gender bias, which involves preferring one gender over another, or assuming that one gender is better for the job; (vi) halo effect, which is the tendency to think everything about a person is good or bad because you like or dislike that person; and (vii) perception bias, which is the tendency to form stereotypes and assumptions about particular groups that make it impossible to make independent judgments about individuals.

Organisations can help raise people’s awareness through the provision of training to minimise unconscious bias. There are also a number of online assessments and training exercises, such as the Harvard Implicit Association Test (IAT), which offers several checks to assess a person’s bias toward age, gender, race, religion and disability IAT’s, and even Facebook training.

There are also many tools and techniques available to help reduce the impact of unconscious bias. These include anonymising candidate data using pre-employment tests, sourcing tools or applicant tracking systems (ATS). Similarly, drawing on skills assessment tests, reviews of the interview process or fully-automated recruitment can help minimise bias from the outset.

Incorporating diversity into your organisation’s core value set is an excellent signal that the business is serious about minimising bias.

Job descriptions and interview panels

Recruitment practices can hide unconscious bias in candidate recruitment, applicant reviews, interviews and selection.

Revising the candidate pool through improved search and advocacy can help achieve fairer applicant recruitment. Additionally, actively increasing the number of candidates across different demographics helps reduce unconscious bias within the candidate pool.

Reworking job descriptions and eliminating gender, age and, where possible, disability restrictions is also a good start. The interview process can be significantly upgraded using stringent standardised criteria and appropriate interviewer training. The use of standardised interviews, rather than unstructured candidate discussion alongside diversity goals, is another method of helping minimise unconscious bias in recruitment. Overall, the proactive improvement of recruitment strategies can decrease biases in a rational, step-by-step fashion.

However, organisations must realise that sustaining bias minimisation is an uphill battle. Research and practice show that maintaining a gender and racial bias-free environment is hardly inevitable, and relapses are common.

Accountability to reduce bias

Despite setbacks, organisations that use accountability as their primary strategy for discouraging biased decision making can significantly minimise unconscious bias.

For high-discretion C-suite decisions, organisations striving to reduce the inherent tension in bias should focus on how to realise high quality engagement which leads to greater alignment.

For example, those with decision-making authority often share the interests and values the organisation wants to maximise with a particular performance culture. As a result, when people inevitably make decisions that reflect their own interests or views, they will align with the prevailing values of the organisation.

Given the organisation’s principles, specifically assigning decision-making tasks and roles may enable a better match between decision makers and the choices they will tend to make. Ultimately, organisations need to have diversity as one of their core, living values.

Nada Kakabadse is professor of policy, governance & ethics and Andrew Kakabadse is professor of governance & leadership at Henley Business School. Ms Kakabadse can be contacted on +44 (0)1491 418 786 or by email: n.kakabadse@henley.ac.uk. Mr Kakabadse can be contacted on +44 (0)1491 418 770 or by email: a.kakabadse@henley.ac.uk.

Nada Kakabadse and Andrew Kakabadse

Henley Business School