Halo Effect in Business Halo 'Literature Review' chapter

  • Length: 16 pages
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  • Subject: Business
  • Type: 'Literature Review' chapter
  • Paper: #89417219

Excerpt from 'Literature Review' chapter :

This is because teams are believed to deliver high performance in a marketplace that is hypercompetitive. Teams are also though to integrate the unique skills of each individual in order to produce high performance. This perception of teams is a halo effect since empirical evidence on the efficacy of work teams in organization does not show consistency. A study that was conducted by a.T. Kearney found that 70% of teams do not deliver the required results. In another study reported by Cleaver (2001)

, it was found that teams greatly improve the output of the organization.

Researchers on the effectiveness of work teams are more careful in making conclusions about their efficacy since they found that their efficacy is simply a myth and that teams are often overused in situations which would have been better with non-team structures. Popular press and business professional continue to profess the importance of work teams. Evidence from research, however, shows that there is mixed evidence on their benefit. It can also be seen that there are many dysfunctional dynamic which teams may encounter. Scholars are therefore of the opinion that teams are overhyped and overused. What business professionals and popular press fail to recognize is that teams when inadequately managed face a lot of dynamics which could lead to their failure.

Naquin and Tynan (2003)

posit that teams are not usually blamed for their failure. This is a documented phenomenon where two distinct studies which used real teams in a controlled scenario found that the failure of the team is often pinned on individuals than the team as a collective. This result supported their hypothesis that teams are given more recognition for their success than for their failure. Teams often escape being blamed for failing because of the halo effect on teams. As a result of impaired cognitive judgment, teams are not attributed any negative traits therefore they are not blamed for their failure.

When a team fails, the management applies counterfactual thinking to understand the past events that could have triggered the failure. The person charged with this responsibility often finds alternative ways in which the situation would have played out. Each alternative scenario assigns the members of the team different decisions which often than not lead to the failure being pinned on the individual or individuals whose alternative scenario are furthest from the actual scenario rather than the team as a whole. The fact that the counterfactual thought processes identify the individual as the cause of the failure rather than the team as a whole does not necessarily mean that the causal attribution process is erroneous. However, the use of counterfactual thinking to identify causal factors has been found to be biased by several factors such as the experience and perspective of the individual charged with identifying the causal factors.

The researchers also posited that the person undertaking the counterfactual thinking is more likely to look at the more developed theories and schemas of individual behavior than those of team dynamics and team behavior which are still substantially underdeveloped. They also argue that in the diagnosis of the performance of the team, it is more likely that the individuals performing this diagnosis will focus more on other individuals as the causal agents rather than the team as a collective. The argument here is that relatively a person has more knowledge on the thinking of individuals rather than the systems thinking of a team. This argument is supported by Kahneman and Varey (1990)

who stated that causal reasoning is affected by the choice of counterfactuals. This is used to predict that when the person has a deeper understanding of teams, they will think more factually on the team as a collective rather than targeting the individual.

In another study that attempted to reanalyze the experimental halo effects, it was found that the halo effect leads a person to judge another based on the global rather than on analytic judgment. The researcher also found that the correlation coefficient was due to objective variations that exist between the individuals themselves or the public information about them. Though the researcher did not succeed in showing any experimental differentiation between the rating conditions when the information was held constant, the research showed the value of the halo effect in influencing the judgment of a person or organization Johnson, 1963()

This same principle can be applied in the analysis of the halo effect of team. When the person uses counterfactual thinking to judge the role then individual played in the failure of the team, the judgment may be based on other global characteristics such as attractiveness rather than on analytic judgment Naquin & Tynan, 2003()

Halo effect in human resource management

Recruitment.

The first impression that a recruiter has on a person could greatly affect their likeability and lead to a recruiter selecting the person over another more experienced but less likeable person. Research on the halo effect has shown that good-looking individuals or those who are smartly dressed creating a lasting fast impression on those who they come across. Consequently, they are assigned favorable traits such as kindness, intelligence, honesty and talent. These traits are awarded to them as a result of their physical attractiveness rather than judging their inner personality. The situation that applies to federal elections where attractive candidates often receive twice as many votes as their unattractive competitors shows that there is favoritism in the handsome politicians. Researchers did a follow-up on the voters and found that none of them realized this bias. In fact, it was found that 73% of voters denied the strongest candidates the chance at victory as a result of their physical appearance. This supports the results of a study conducted on employment interviews where it was found that when faced with difficult choices, recruiters often used the overall likeability of the person to make the decision. The study found that good grooming of candidates influenced their likelihood of being hired on their looks rather than their knowledge, skills, abilities and other characteristics (KSAOs). Recruiters openly admit that appearance does play a role, though small, in their choices. Economists studying U.S. And Canadian salaries found that individuals who are attractive often get paid about 12-14% more than their unattractive co-workers in the same job Dennis, 2007()

This evidence shows that attractiveness of candidates greatly influences their ratings. They are given bias of being intelligent, honest and kind because these traits are often perceived to perfectly fit these people. Researchers have studied the effect of the halo effect and have shown that attractive people are generally treated better than their unattractive counterparts. This is as a result of the perceptional bias that comes as a halo effect Dennis, 2007()

The halo effect in recruitment also occurs where in the interviewing process, the candidate may give an answer that provides positive indicators of their competencies and there is no probing to check for negative examples. In the final selection, the halo effect makes the recruiter choose this employee based on the positive indicators without considering the negative aspects of their assessment. These negative aspects may either be downplayed by the overall judgment of the recruiter about the person or it may be ignored Dennis, 2007()

When head hunting is used as the recruitment procedure, the halo effect also plays a role in picking of candidates to be 'hunted'. The human resource management team may choose the candidates from looking at their influence in the activities of the organizations which they currently work for without looking at their negative aspects. A good example is given by Rosenzweig (2009)

where they observed headhunting as the common practice in startups trying to find a successful senior management person for their team. Rosenzweig states that by looking at the companies run by the manager being hunted as profitable and growing, the recruiter simply attributes the success of the company to the manager or CEO. He also argues that in head hunting, the recruiter may already have the perfect candidate in mind. Therefore interviewing may not play any role in the selection process. Once more, the negative aspects of the candidate may either be downplayed or ignored.

Rosenzweig states that though corporate attributes such as a visionary CEO, vibrant culture, brilliant strategy and motivated employees may be correlated, it is difficult to them assign causal relationship. Similar studies have shown that though a specific factor may lead to improved performance of the employees; it cannot be the sole factor. This is because the many factors are correlated. Furthermore, studies have shown patterns of regression in companies that were once high-performing.

Stereotyping is also a common phenomenon in recruitment that comes as a result of the halo effect. Stereotyping can be positive or negative. When positive, it would mean that a person of a certain age, educational background or experience is seen to have a positive causal relationship to performance thus is deemed to be a suitable candidate for the position. In negative…

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