Overcoming the Outcome Bias: Making Intentions Matter

Ovul  Sezer; Ting  Zhang; Francesca  Gino; Max   Bazerman

Article | Organizational Behavior and Human Decision Processes

Overcoming the Outcome Bias: Making Intentions Matter

by Ovul Sezer, Ting Zhang, Francesca Gino and Max Bazerman

Abstract

People often make the well-documented mistake of paying too much attention to the outcomes of others’ actions while neglecting information about the original intentions leading to those outcomes. In five experiments, we examine interventions aimed at reducing this outcome bias in situations where intentions and outcomes are misaligned. Participants evaluated an individual with fair intentions leading to unfavorable outcomes, an individual with selfish intentions leading to favorable outcomes, or both individuals jointly. Contrary to our initial predictions, participants weighed others’ outcomes more—not less—when these individuals were evaluated jointly rather than separately (Experiment 1). Consequently, separate evaluators were more intention-oriented than joint evaluators when rewarding and punishing others (Experiment 2a) and assessing the value of repeated interactions with these individuals in the future (Experiment 2b). Third-party recommenders were less outcome-biased in allocating funds to investment managers when making separate evaluations relative to joint evaluations (Experiment 3). Finally, raising the salience of intentions prior to discovering outcomes helped joint evaluators overcome the outcome bias, suggesting that joint evaluation made attending to information about intentions more difficult (Experiment 4). Our findings bridge decision-making research on the outcome bias and management research on organizational justice by investigating the role of intentions in evaluations.

Keywords: outcome bias; intentions; joint evaluation; judgment; separate evaluation; Goals and Objectives; Prejudice and Bias; Judgments; Performance Evaluation; Outcome or Result;

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Citation:

Sezer, Ovul, Ting Zhang, Francesca Gino, and Max Bazerman. "Overcoming the Outcome Bias: Making Intentions Matter." Organizational Behavior and Human Decision Processes 137 (November 2016): 13–26.

When entering into a negotiation, individuals have the choice to enact a variety of communication styles. We test the differential impact of being “warm and friendly” versus “tough and firm” in a distributive negotiation, when first offers are held constant and concession patterns are tracked. We train a natural language processing algorithm to precisely quantify the difference between how people enact warm versus tough communication styles. We find that the two styles differ primarily in length and their expressions of politeness (Study 1). Negotiators with a tough communication style achieved better economic outcomes than negotiators with a warm communication style, both in a field experiment (Study 2) and in a laboratory experiment (Study 3). This was driven by the fact that offers delivered in tough language elicited more favorable counteroffers. We further find that the counterparts of warm versus tough negotiators did not report different levels of satisfaction or enjoyment of their interactions (Study 3). Finally, in Study 4 we document that individuals’ lay beliefs are in direct opposition to our findings: participants believe that authors of warmly worded negotiation offers will be better liked and will achieve better economic outcomes.

In a recent article published in Journal of Personality and Social Psychology (JPSP; Huang, Yeomans, Brooks, Minson, & Gino, 2017), we reported the results of 2 experiments involving “getting acquainted” conversations among strangers and an observational field study of heterosexual speed daters. In all 3 studies, we found that asking more questions in conversation, especially follow-up questions (that indicate responsiveness to a partner), increases interpersonal liking of the question asker. Kluger and Malloy (2019) offer a critique of the analyses in Study 3 of our article. Though their response is a positive signal of engaged interest in our research, they made 3 core mistakes in their analyses that render their critique invalid. First, they tested the wrong variables, leading to conclusions that were erroneous. Second, even if they had analyzed the correct variables, some of their analytical choices were not valid for our speed-dating dataset, casting doubt on their conclusions. Third, they misrepresented our original findings, ignoring results in all 3 of our studies that disprove some of their central criticisms. In summary, the conclusions that Kluger and Malloy (2019) drew about Huang et al. (2017)’s findings are incorrect. The original results are reliable and robust: Asking more questions, especially follow-up questions, increases interpersonal liking. (PsycINFO Database Record (c) 2019 APA, all rights reserved)

Case | HBS Case Collection | November 2019

Starbucks: Reaffirming Commitment to the Third Place Ideal

Francesca Gino, Katherine B. Coffman and Jeff Huizinga

On April 12, 2018, two African American entrepreneurs had scheduled a business meeting at a Starbucks in Philadelphia’s Rittenhouse Square neighborhood. They sat without ordering, waiting for a local businessman to show up for the meeting. The store manager called 911 on them, despite the fact that they were behaving neither violently nor disruptively. When the police arrived soon after the call, they arrested the young men. The incident was viewed by the Starbucks’ leadership team, including the CEO, as “a disheartening situation” and, in the words of John Kelly, the company’s Senior VP of Public Affairs and Social Impact, “a profound failure to live up to our ideals and a violation of our values.” Starbucks, which employed around 175,000 individuals nationwide and served more than 4 million customers daily in its approximately 8,000 U.S. stores, strived to abide by its mission statement: “…To inspire and nurture the human spirit, one cup, one person, one neighborhood at a time.” The case describes how the company and its leadership responded to the crisis. To react to the incident, the leadership decided to close down its stores for a day of unconscious bias training, aimed at raising awareness of racial bias and discrimination in particular. The company also started a journey of providing more training and development for the partners, to assure that they lived by the company values on a daily basis, and revised store policy that, the leadership believed, contributed to how the store managers and employees in the Rittenhouse Square store behaved back in April 2018. As the case closes, CEO Steve Johnson reflects on how he could assure that every Starbucks employee not only understood the company mission and values, but truly connected to them emotionally and carry them out daily in their work.

Citation:

Gino, Francesca, Katherine B. Coffman, and Jeff Huizinga. "Starbucks: Reaffirming Commitment to the Third Place Ideal." Harvard Business School Case 920-016, November 2019. View Details

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