Organizational Wellness

Examples of Cognitive Bias in the Workplace

Last Updated Nov 4, 2024

Time to read: 13 minutes

Your brain has a lot going on each day. In fact, it’s busy processing 74 GB of information. That’s the equivalent of watching over two days of video or listening to over 24,000 songs!

You might come across all of that information at work or at home or even driving down the highway and seeing billboards. Everywhere you go, your brain is absorbing images and sounds to try and make sense of the world.

With that amount of data to take in, your brain has some shortcuts called heuristics. These are mental leaps your brain makes based on information it currently has. Some of these heuristics affect how we interpret sensory information while others speed up our thought processes based on our past experiences.

This is helpful when we open our inbox in the morning and have to decide which emails to read first. We can make these choiced based on heuristics such as sender importance, subject line keywords, or urgency indicators like exclamation marks or flagged emails. Unfortunately, these same heuristics can also cause our brains to make mistakes, processing information based on current beliefs and limited worldviews.

When this happens, heuristics become cognitive bias. It’s essentially your brain jumping to conclusions or using limited information to make a conclusion. Cognitive biases can range from inconvenient to outright harmful — even hurting diversity and inclusion.

Discover different ways cognitive bias can show up in the workplace and how to overcome them.

Overview of Cognitive Bias in the Workplace

Cognitive biases occur when your brain relies on negative biases to activate survival instincts that help you avoid a perceived threat. When your brain is trying to help keep you safe and process information, it’s bound to make some wild mistakes.

In the workplace, they can lead to significant problems, particularly in professional decision-making. For instance, biases may cause someone to view a woman of color as less "qualified" for a job, contributing to disparities in promotion rates — this is part of why only 58 Black women are promoted for every 100 white men.

Such biases can also reduce diversity, negatively impacting business performance. Diversity directly boosts productivity, so lacking it directly hampers your organization. Moreover, unchecked biases hinder hazard recognition, as team members rely on "what's always been done" instead of considering potential dangers, leading to safety risks.

To address these challenges, raising awareness about cognitive biases is essential. Understanding how biases affect your company and employees can help improve diversity and overall wellbeing in your organization.

Examples of Cognitive Bias in the Workplace

There are several types of cognitive biases that can affect your organization. Understanding how these biases are is the first step in mitigating them, so here are five of the most common bias pitfalls and what they might look like in real life.

Confirmation Bias

Confirmation bias refers to the brain’s tendency to search for and focus on information that supports our preconceptions. Essentially, it’s letting information stick in your mind that supports what you already think. This becomes especially problematic when new information counter to your existing beliefs is presented that should be considered. With this bias, your brain can then warp the conflicting information to “confirm” your existing conclusions, even if it’s not true. This is how it could manifest at work:

Example 1

A business is looking to expand, and the CEO Laura has a good idea of how that is going to happen. In evaluating the acquisition of the tech startup InnovateTech, she and the leadership team focus on information that supports their enthusiasm for the deal — confirmation bias in action. They emphasize InnovateTech’s promising product demos and positive market projections, while downplaying or ignoring potential red flags such as inconsistent financials and management issues. The team selectively seeks input from advisors who are already supportive of the acquisition, disregarding concerns raised by skeptics.

This biased approach leads them to reinforce their initial belief in the acquisition's benefits, potentially resulting in a flawed decision and overlooking significant risks.

Example 2

Confirmation bias can also wiggle its way into performance evaluations and feedback.

Take Mike, a manager who believes that a particular employee, Alex, is not a team player. This belief might stem from an initial impression or a past incident where Alex didn't collaborate as expected. Due to confirmation bias, Mike starts noticing and remembering instances that reinforce this belief, such as when Alex works independently or doesn't contribute much in meetings.

Conversely, when Alex does engage in teamwork or offers valuable input, Mike might unconsciously overlook or downplay these positive behaviors, dismissing them as exceptions rather than the norm. This selective perception can lead Sarah to make unfair evaluations of Alex’s performance, potentially affecting Alex’s opportunities for promotions or recognition.

In this scenario, confirmation bias skews Mike’s judgment, preventing a fair assessment of Alex’s actual contributions and skills. Such poor leadership can potentially lead to a less collaborative and more tense work environment.

Anchoring Bias

Anchoring bias is when you give too much weight to the first piece of information you hear. Essentially, you become “anchored” to the earliest piece of information and let it distort your decision-making. This has been used intentionally in marketing for years. For example, when Williams-Sonoma introduced its original bread maker, they priced it at $275. It didn’t sell well, so they improved the product and released a new version for double the price. Sales for the original bread maker skyrocketed because so many people now thought it was a “good deal.”

That bias may have helped Williams-Sonoma, but it can be harmful at your company. Here are two examples of how that could happen:

Example 1

Anchoring bias can harm salary negotiations. When discussing salary, an HR manager asks the candidate to propose a salary that reflects their experience and past job. They say only $40,000 — trying to be reasonable to boost their chances of being hired. That number sticks with the HR manager, and the employee ends up with that as their salary.

On the other hand, another candidate says $70,000 and ends up with a salary of $50,000. This all happened because the hiring manager focused too much on the first piece of information they had. This happens often, with candidates who propose a higher salary (even as a joke) consistently making around $3,000 a year more than those who low-ball the first number.

Example 2

This type of bias can also affect brainstorming. In an idea-generating session, everyone comes with their best thoughts, and someone throws theirs out to the crowd right away. That idea sticks with everyone else, and they all just decide it’s a great approach to take. Or they might only suggest ideas along a similar track for the rest of the meeting.

Intead, it would have been more beneficial to take time to explore a variety of ideas and determine what would be best for the company.

Availability Heuristic

The availability heuristic bias is when your brain relies mainly on information that comes to mind quickly or easily. In general, that is often ideas that happened recently or were highly impactful. For example, participants in a study named California as a likely location for flooding in North America because of the amount of earthquakes in the state, according to researchers. These people relied on information they had that earthquakes often cause floods. However, in reality, the flood risk in California is extremely low, and this information led the participants the wrong way.

This can happen at work too.

Example 1

Availability heuristics can cause people to favor people who are familiar. That could lead to managers hiring and promoting people who “look” like those in charge. For example, a male CEO could be looking to hire a member of the leadership team. He is deciding between a female internal candidate who has years of experience and a male external applicant who is newer to the field and has never been in a leadership role. The CEO hires the man because he’s more familiar with the idea of working with another male manager.

This kind of bias contributes to why women only make up only about 32% of the leadership roles while making up almost half of the workforce itself.

Example 2

Availability heuristics can also affect employee recognition and rewards. A manager could be deciding between two individuals for a promotion. Both individuals are high performers, but Employee A is the slightly better performer and manager. Naturally, the promotion should probably go to Employee A. In this situation, it doesn’t, all because the manager can’t seem to forget the time Employee A lost an important document when their computer crashed several years ago.

That memory led the manager to think Employee A is unreliable, and Employee B gets the promotion. Unfortunately, the memory doesn’t say anything about performance, but it unfairly affected the way the manager viewed both individuals.

Bandwagon Effect

The bandwagon effect is when people make decisions and adopt attitudes or behaviors because other people are doing it. It’s a powerful bias. For example, Oprah Winfrey’s endorsement of Obama in 2008 may have won him an additional one million votes, according to researchers at Northwestern University. Here are two hypothetical examples of how this same bias could impact your company:

Example 1

Technology adaptation can be influenced by the bandwagon effect. Imagine that a company is looking for a new software system that will help them manage their cloud spending more efficiently. The organization looks into what other businesses are using. This ends up being their only research avenue, and they select the most popular choice. However, they didn’t spend time looking into whether the software will meet all of their business needs.

While it’s likely the software performs fine, the organization could have done less biased research and found a more optimal solution or a better price.

Example 2

A group of 15 employees are in a meeting coming up with ideas for the next business project. Somebody proposes an idea, and everybody nods along with them, even if it’s not a great idea. Nobody speaks up because it looks like everyone is in agreement that this is a great idea. Sometimes it is, but oftentimes that first idea isn’t the best. In this hypothetical scenario, the suggested direction doesn’t lead the company the right way.

What went wrong? Everyone seemed to be in agreement that this was a good idea, but nobody actually initiated any discussion. The people involved just wanted to be liked and part of the group. When that happens, bandwagon bias can steer your teams in the wrong direction. Instead, it’s important to have genuine discussions and use critical thinking to evaluate ideas.

Overconfidence Effect

The overconfidence effect is when we assume we know more and have higher levels of abilities than we actually do. Somebody might think they’re better than average at a skill or that because they’re CEO, they know all about the right IT solutions for the company. The reality is that you might be exceptionally good at something, but it’s unlikely that you’re above average in everything. In fact, few people genuinely have high levels of abilities and skills, but many people believe they do. It could manifest at your company like this:

Example 1

For example, a CEO who has been successfully leading the company for years is likely generally smart and skilled. They’ve done well for years. When it comes time to predict the market, the CEO overestimates their own skills based on how well they’ve done in the past and makes decisions based on their gut instead of data. The company ended up performing less well that year because it didn’t prepare to match trends that were obvious in the data.

This could have been avoided if the CEO hadn’t relied on their past success to make a decision.

Example 2

A hiring manager has successfully hired well, but they get overconfident in their gut reactions. This then leads the manager to unfairly eliminate candidates because they didn’t give the right first impression. Those individuals might have been great for the company, but they didn’t get far enough for the hiring manager to see that. The hiring leader should have instead relied on applications and interview answers to determine who gets the job.

How to Overcome Cognitive Bias in the Workplace

Bias can show up in almost every level of a company and have serious consequences for how your employees are treated and how well your company operates. To help counteract this, consider these steps for reducing bias at work:

Recognizing cognitive bias. Step one is to realize that everyone has cognitive biases. You have them too, but you can’t improve if you’re not aware of them. Considering what biases might be affecting your workplace can help you begin to address them.
Developing self-awareness and mindfulness. Being self-aware is also key. These biases often crop up when someone is stressed or overloaded. When you’re feeling this, it can be helpful to slow down and rest. Doing so can help you evaluate what your mind is doing and make sure you’re not making any unfair decisions that could hurt you or your company.
Encouraging diverse perspectives and challenging assumptions. A healthy workplace embraces diversity and difficult conversations. Finding fresh perspectives help bring you closer to objectivity and can challenge your assumptions. Consider finding ways to talk to new people and hear their ideas, even if it’s uncomfortable at first. You might also prioritize diversity in brainstorming sessions to reduce biases there.
Implementing decision-making processes and frameworks. Creating policies can help make it easier for everyone in your workplace to avoid cognitive bias. For example, instead of having to decide for every individual how returning to the workplace looks, you can create an inclusive workplace policy that makes coming back to work more equitable for all of your team members.
Training and education on cognitive bias awareness. One other approach is to provide education and awareness training to your whole team. Professional training can help everyone identify their own cognitive biases and learn strategies to overcome them.

Support Employees with Wellbeing Programs

Eliminating cognitive bias in your workplace is just the beginning of creating a dynamic, supportive environment where employees thrive.

To supercharge this effort, dive into holistic wellness programs that elevate your team's physical, mental, and emotional wellbeing. This commitment isn't just good for morale—it's a smart retention strategy. With 93% of workers saying their wellbeing at work is as crucial as their salary, companies that prioritize wellness are magnets for top talent. Investing in powerful wellness programs isn't just a nice-to-have — it's a game-changer for keeping your team engaged and loyal.

Ready to make a difference? Connect with a Wellness Specialist today to discover how customized wellness programs can transform your workplace and keep your employees excited to be part of your team!

Company healthcare costs drop by up to 35% with Wellhub! (* Based on proprietary research comparing healthcare costs of active Wellhub users to non-users.) Talk to a Wellbeing Specialist to see how we can help reduce your healthcare spending!

Examples of Cognitive Bias in the Workplace

Overview of Cognitive Bias in the Workplace

Examples of Cognitive Bias in the Workplace

Confirmation Bias

Example 1

Example 2

Anchoring Bias

Example 1

Example 2

Availability Heuristic

Example 1

Example 2

Bandwagon Effect

Example 1

Example 2

Overconfidence Effect

Example 1

Example 2

How to Overcome Cognitive Bias in the Workplace

Support Employees with Wellbeing Programs

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