Don’t Just Do the Math

By on / Daily, Negotiation Skills

Adapted from “Do the Numbers Get in Your Way?” by Brian J. Hall (professor, Harvard Business School) and P. Trent Staats (vice president, Verenium Corp.), first published in the Negotiation newsletter.

Consider the customer support center that sought to increase the number of calls it could process per hour without increasing its capacity. When the call center began measuring and rewarding reduced call times, the amount of time spent on each call quickly dropped—and so did customer satisfaction.

In part, this disappointing result reflects the fact that measurement is often associated with incentive schemes, such as tying call times to employee bonuses. But it’s also true that the mere act of measurement affects our decision-making process. Specifically, people tend to overweight information that is more easily quantified or measured in precise ways—a phenomenon known as the measurability bias. And when companies introduce a new performance measure, it tends to result in an increase in whatever quantity the company is measuring.

Why? First, measuring something generally makes people more aware of it than they were before, elevating the importance of primed factors—those we measure and pay attention to—relative to others. Second, most people like to keep score. Fearing failure and detesting uncertainty, we seek the psychological safety provided by hard measures (compensation, price, and so on), which enable us to track our progress. Competitive, goal-oriented people feel particularly lost without a tangible way to determine whether they are winning, losing, improving, or falling behind.

When people become absorbed in negotiating over measurable but perhaps trivial matters, they are likely to underweight features of the negotiation that could affect them in significant ways. The measurability bias could lead you to be overly aggressive in job negotiations at the risk of souring a deal or creating ill will with a future employer. In the worst cases, the bias could lead you to choose the wrong job or career altogether. A short-term salary focus can steer people into positions they consider “safe” but unexciting. If they had made decisions consistent with their true preferences, they might have given more weight to the “unmeasurables” that really matter to them, such as job autonomy, interesting work and colleagues, leisure time for friends and family, or the desire to help those less fortunate.

Fortunately, there are several relatively simple ways to overcome the measurability bias. The following guidelines will increase your likelihood of negotiation success.

1. Diagnose your flawed thinking. As with many undetected biases, simple recognition goes a long way toward eliminating the flawed decisions that flow from the measurability bias. For example, students who understand their bias toward salary information in job negotiations learn to ask better, broader career-related questions from a wider network of people. They might talk to current and former employees of the prospective employer about such issues as training and mentorship opportunities, job autonomy, company culture, the nature of promotion decisions, and the way in which responsibilities and compensation vary with potential career paths within the company.

2. Be explicit about tradeoffs. Prior to beginning a negotiation, list in detail all of the issues and tradeoffs that you care about, including those that are difficult to measure. Then keep your list close at hand once negotiations begin. Frequently referring to an explicit list of issues and tradeoffs reduces the likelihood that the measurability bias will drive some issues from your consciousness.

3. Consider the other side’s bias. Recognizing that the measurability bias is just as likely to affect your counterpart as well as you can be a powerful advantage. One company asked its customers to describe their experiences with its service division by choosing from options ranging from “Very Unsatisfied” to “Very Satisfied.” To simplify their task of aggregating survey data, the service agents began to associate numbers with these responses (zero with “Very Unsatisfied,” for example, and 4 with “Very Satisfied”). When this happened, agents immediately began to pay greater attention to their survey results, which they had previously widely ignored. The measurability bias was inadvertently employed, with positive results.

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